Why are multi-currency accounts a popular choice for US importers?
Here, we explain how money transfer services are gaining ground on traditional bank multi-currency accounts and becoming a popular option for US importers and e-commerce sellers.
If you’re an e-commerce seller looking to take advantage of importing less expensive goods, multi-currency transactions are likely to become an essential aspect of expanding your business. You must ensure you can obtain dependable payment methods 24/7 to stay competitive in the global marketplace.
This article will clarify what a multi-currency account is and why it is logical for importers to open them if they have business partners in multiple countries.
What is a multi-currency account?
Conventional multi-currency accounts enable you to hold various currencies in one account that is connected to your home country’s bank account. All major banks, and even some private banks, provide these accounts. Nonetheless, they come with fees that can be itemized as follows:
- Minimum balance: Some banks require you to deposit a minimum amount into a multi-currency account. In many cases, the minimum balance can be relatively high.
- Transaction fees: These rates differ among banks, but you may be charged per transaction for withdrawing funds and making payments. There may also be a charge for using an agreed overdraft facility.
- Monthly set-up fees: Along with a minimum deposit, some banks may impose a monthly fee for opening a multi-currency account.
- Exchange fees: Traditionally, importers would look to purchase currency at a favorable exchange rate and store it in their multi-currency account for later use. However, exchange rates fluctuate daily, meaning there may be instances where the importer is locked into an unfavorable exchange rate on a substantial sum within their account.
Why importers should open a multi-currency account
If you are an e-commerce brand that frequently imports goods and services from other countries, it will be more convenient for you to conduct transactions in your business partners’ home currency for several reasons:
- You can make quicker payments by holding funds in multiple currency accounts. It’s possible to obtain better exchange rates on funds you already hold in various currencies. If you frequently transfer funds, you may lose revenue if you regularly have to convert money back and forth from your home currency.
- Some banks may grant you access to better interest rates based on the currencies held in multi-currency accounts. In some instances, your savings can go further.
Therefore, for faster and more cost-effective transactions, importers should consider opening accounts in multiple currencies.
However, as mentioned, multi-currency accounts from high-street banks come with additional fees. So many small e-commerce businesses may feel like they are priced out of opening an account.
If you are starting as an online seller, don’t worry, there are alternatives to opening a multi-currency account with your bank. Known as money transfer services, these currency exchange platforms are designed with SMEs in mind to help them access global trade opportunities.
Benefits of Money Transfer Services for Small Businesses
At first glance, setting up a borderless money transfer service account is easy. You don’t have to seek business approval from your bank. All you have to do is register an account online, verify your ID, and you’re ready. Once you have set up your multi-currency account with a money transfer service, you can enjoy the following benefits:
- No minimum deposit: Many standard business accounts are free to open, although some providers may charge a monthly fee. However, the monthly costs may be cheaper than some bank-owned multi-currency accounts. Paid-for money transfer service accounts can also offer additional services like a mobile app dashboard, FX-optimized debit cards, and free cash withdrawals from international ATMs.
- Flexible exchange rates: Many money transfer service accounts offer options to hold funds in over 60 currencies worldwide. These sites are ideal for e-commerce brands expanding their business to customers globally. They often provide a broad range of currencies eligible for exchange, and in many cases, they allow you to lock in a favorable exchange rate for a set period. Locking in exchange rates frees up business cash flow and prevents the hassle of buying up currency when you see that the exchange rates are favorable.
- Cheaper processing fees: Fee structures across many money transfer services are transparent and affordable (on top of the base exchange rate). In some instances, the minimum amount you can transfer in a single transaction is as low as $1.
- Integration Options: Several money transfer sites can easily integrate with your accounting software, making it easier to keep track of your revenue streams, whether you are collecting funds from customers abroad or paying a foreign supplier’s invoice.
Use Zyla payment gateway to power your money transfers worldwide
The Zyla Account is the hassle-free way to pay business partners and get paid from marketplaces quickly.
- Open multi-currency accounts with local account details
- Make fast and secure global payments to suppliers, staff and partners
- Collect funds from marketplace sales
- Keep costs down with competitive rates
The free-to-open Zyla Account enables businesses to make collections and payouts internationally – giving you the freedom to do business anywhere, all with the security of our online platform. Open an account today and you could be approved, set up and trading internationally in 24 hours. Get started or find out more by calling (855) 797-3366 today.