Borderless Business Made Easy: Multi-Currency Account Guide

Global ecommerce is booming, with 66% of ecommerce companies selling products across borders. Marketplace giants like Amazon are fueling this ecommerce boom by making it easier for sellers to target new markets.

Similarly, customers love the platform's hassle-free shopping experience, from voice-activated ordering (via Alexa and Amazon Pay) to paying in their preferred currency. Studies show that offering localized payment options can boost conversion rates by up to 30%, and with two-thirds of the world's population using digital payments, expanding your payment options is key. 

Yet, managing different currencies and international payments can be a nightmare for online sellers — especially those who rely on suppliers from China and target customers in multiple regions.

Enter multi-currency accounts: your key to streamlining international payments and collections.

This article explores these accounts' benefits and provides tips on finding the best providers to spur your growth.

What is a Multi-Currency Account?

A multi-currency account lets you send and receive funds from a single bank or fintech provider in various world currencies. 

They're ideal for international travelers and businesses that regularly transact with companies or people worldwide. For instance, an Amazon seller sourcing goods from a Chinese supplier can use a multi currency bank account to: 

• Collect customer payments in a range of currencies. 
• Hold funds in several currencies and convert money at any time.
• Make fast payments to overseas suppliers in their preferred currency.

How Does a Multi-Currency Account Work?

Multi-currency accounts work like standard bank accounts, but with the added bonus of managing multiple currencies from a centralized platform. Account holders can deposit and withdraw their funds, make payments, and (in some cases) collect interest, all without having to register separate bank accounts in different countries. 

Unlike credit cards and traditional bank accounts offering currency exchange services, multi-currency accounts are designed to streamline international money transfers. 

Namely, they allow account holders to hold balances in various currencies, eliminating the need to convert funds back and forth when collecting and making international payments. 

However, it's important to note that money transfer fees may still apply, and the currency exchange rate used when converting currencies can still impact account balances.

Benefits of Multi-Currency Accounts

Faster International Transactions: Multi-currency account holders tap into local payment networks rather than relying on the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, where payments can take up to five days to complete. Speeding up the payment process facilitates more efficient cash flow. 

Cost-Effective Currency Transfers: Beyond avoiding repeated currency conversion costs, many multi-currency accounts offer competitive money transfer fees. Some services also track live currency exchange rates, allowing account holders to capitalize on market fluctuations and lower their overall transaction costs. 

Convenient Money Management: Digital international payment solutions let companies manage their funds 24/7. Furthermore, they can simplify reconciliation processes by issuing invoices and receiving ecommerce payments in multiple currencies, bypassing the need for exchange rate adjustments in accounting. 

Improved Financial Risk Mitigation: Holding funds in various currencies can help companies hedge against currency fluctuation risks. Account holders can wait until the exchange rate between currencies is favorable, helping them retain more of their profits. 

‍Enhanced Supplier Relationships: Ecommerce sellers can pay suppliers in their preferred currency, speeding up the payment process and enabling sellers to negotiate better contract terms.

Factors to Consider When Choosing International Payment Services

As an Amazon seller looking to expand to global markets, a multi-currency account can be invaluable for reducing currency conversion fees and gaining more control over when you convert your funds. 

However, with various providers offering different features, choosing the best account for your cross-border payments is critical.

Here's a breakdown of key factors to consider when selecting a foreign currency account for your Amazon business:

Range of Supported Currencies

Amazon US, Germany, UK, Canada, and Japan are among Amazon's leading marketplaces with the highest net sales, so look for a service that offers ecommerce payment processing in these nations' local currencies. 

Also, Amazon has been focusing its efforts on South America, with Brazil amongst the world's fastest-growing ecommerce markets. So, consider your future expansion plans and choose ecommerce payment platforms that can accommodate your long-term goals.

Currency Conversion, Exchange Rates and Fees

Look for multi-currency accounts that offer transparent pricing structures and competitive exchange rates. For instance, some providers will track live Forex rates, which could allow you to reduce your money transfer costs by avoiding traditional fixed currency exchange rate markups. 

Alternatively, some providers may cap exchange costs at specific basis points (bps), giving account holders a transparent and affordable maximum currency conversion fee. It's also vital to be wary of hidden charges, such as monthly subscriptions, account limits, and minimum deposits, as these extra costs may impact your business's bottom line.

Convenient and Cost-Effective Solutions

Check that the foreign exchange account provider participates in Amazon's Payment Service Provider (PSP) Program as an approved disbursement solution. Amazon PSPs simplify the processes of receiving and managing ecommerce payments. 

Also, check the solution's international payment methods. You may need to send bulk payouts to multiple recipients or automate account reconciliation processes with compatible accounting software. Find a solution that facilitates smooth integration with other financial services to help you improve money management capabilities.

Robust Account Security

Choose a multi-currency account with robust security features. In 2023; Amazon was the second most targeted website for phishing attacks. Features like multi-factor authentication, data encryption, and account monitoring will, therefore, help protect account holders from bad actors trying to access funds with stolen credentials.

Popular Multi-Currency Account Providers

There are many international payment services on the market. This table compares the key features of three popular providers: Zyla, Wise, and HSBC.

How to Set Up a Multi-Currency Account Like a Pro

Opening a multi-currency account is fairly straightforward. In most cases, you can apply for global payment systems online with your ID and business registration details, and your account can be approved within one to five business days.  

Once you're registered, you can start transferring funds between currencies and making international business payments. If your account is an approved Amazon PSP, integrating it within Amazon Seller Central is a breeze. Just follow the provider's instructions and you'll be effortlessly collecting marketplace funds across borders in no time. 

Next, connect compatible accounting tools that meticulously log every transaction, conversion, and transfer fee automatically in your financial records. 

Automating payment scheduling, currency repatriations, and reporting not only saves time but also improves supplier relationships, as it ensures predictable cash flow, on-time payment processing, and minimizes payment disputes. 

Additionally, integrating tools like ScanUnlimited by Carbon6 can enhance your financial management capabilities. ScanUnlimited connects you with reputable wholesalers, and optimizes your supply chain costs with its built-in VAT calculator, multipack cost adjustment tool, and advanced search features.

When combined with streamlined multi-currency account payments, you can confidently explore the supplier landscape and unlock the full potential of your borderless business.