In which bank is it better to open a foreign currency account for a business?

Having a foreign currency or a multi currency business account is a powerful tool for companies, organisations and individuals that trade internationally, deal with foreign vendors or clients or otherwise receive, hold or pay in multiple currencies. But as we know, not all banks and fintechs are the same or hold the same power and which one is the best depends on a lot of factors including business size, geography, volume, currencies and regulatory environments. Through this article, let’s understand the options, what to consider and what to look for as well as which institutions currently are strong choices for your business.

Why businesses use multicurrency accounts

Before getting the the details, let’s first understand why multicurrency and foreign currency accounts matter and what are their key benefits;

These accounts help in respective conversion fees when dealing with multiple currencies.

They facilitate holding foreign currencies for receivables without immediately converting them.

To help pay suppliers, vendors or employees in their local or demanded currencies.

To secure funds from currency risk by balancing inflows and outflows in different countries.

To improve cash flow and flexibility which is especially important for SMEs, exporters, e-commerce, Saas and more.

To also simplify cross border operations like reducing delays, bypassing elaborate paperwork and FX markups.

Things to consider when choosing a bank for a foreign currency business account

When evaluating the options, consider the following;

Currencies supported - It is important to understand which currencies the bank supports - major ones (USD, EUR, GBP, etc) vs minor currencies and how many different ones.

Exchange rates and FX markups - whether the bank uses interbank rates or adds large spreads.

Fees and minimum costs - there are many primary and entailing costs to consider like monthly fees, minimum balance requirements, conversion fees, wire fees etc.

Account types - Types like virtual or physical account, IBAN or local account details and ability to receive local payments.

Regulatory and KYC requirements - while some banks have strict compliances, others require business proof or may restrict foreign accounts.

Speed of transfers and settlements - how fast can one send and receive money, especially when it comes to cross-borders flows.

Additional features - Newer and enhancement features like integrations with accounting, dashboards for payments, corporate cards, API access etc.

Stability, reputation and legal oversight - It is important to ensure that the funds are secure and the bank is regulated.

Key providers and how they compare

Wise Business - It lets you hold and convert 40+ currencies with local bank details. It is low fee and transparent on FX rates which makes it ideal for SMEs and ecommerce. Sometimes, for some currencies, higher volume accounts may incur extra charges.

Revolut Business - It supports many currencies, offers slick dashboards and offers team cards with smart subscription plans. It entails a great user experience and flexible payments but sometimes causes high volume exchange fees and add-ups.

Fyorin - It provides virtual accounts and IBANs across 100+ currencies with fast local reach. It is strong for complex, multi currency operations, though pricing and onboarding can be heavier and complex.

Equals Money - It provides a simple 38 currency setup with minimal details and quick settlement. It entails low hidden costs and easy setup but fewer banking add-ons like credits or loans.

TransFi - It provides top notch services and interface at power by connecting users with over 100+ currencies, 250+ local payment methods, and 80+ digital assets, giving both senders and receivers control, speed, and cost savings.

How to really choose the one best for your business

You would need a decision framework to get to a conclusion;

List the currencies that your business needs both in terms of incoming and outgoing.

Estimate the volume of transactions - how many would you hold in FCYs and how many would be accepted for cross border transactions.

Consider how much you would weigh each of the factors like speed, cost and features, against each other.

It is important to evaluate providers on the basis of transparency of fees and FX rates.

You must check the regulatory and compliance fit in your jurisdiction.

Determine the requirement level of services - digital experience, local support and customer service.

It is advisable to partner with one provider to test the logistics, hidden fees, delays and support priorities.

Why TransFi might be the best choice

If you’re looking to simplify cross border payments/ foreign currency flows, a specialist like TransFi can bring an edge over other services, it can help with solutions like;

Lower fees compared to other platforms, minimal setting up cost and no hidden fees at any stage.
Local and preferred payout methods to choose the most appropriate one with every need.
Handles multi-currency receivable and settlements seamlessly.
Its integrated dashboards provide transparency and visibility.
Access to digital asset payments help leverage the power of blockchains in speed, cost and transparency.
24/7 customer support at every stage.
It is equipped with regulatory support and compliance requirements pertaining to global standards.

TransFi is helping many companies across industries in the global realm embrace a better future with the ease of the best services and interface at power by connecting users with over 100+ currencies, 250+ local payment methods, and 80+ digital assets, giving both senders and receivers control, speed, and cost savings. To explore more about the best payment provider for your business, get in touch with the expert team at TransFi expect the best resolutions at the earliest!

To know more, also read: Cross-border payments in Online Travel Agencies (OTAs): How to streamline supplier settlements

FAQs (Frequently Asked Questions)

What is the difference between a foreign currency and a multi currency account?

A foreign currency account holds balances in a single non local currency, for eg, USD or AUD. On the other hand, a multi currency account lets you hold, send, receive and convert among several currencies under one common account.

Why is it important to have a multicurrency account for a business?

If the business is involved in international transactions then a multi currency account is important and helpful in avoiding delays, managing conversions and FX rates.

What are the basis to consider before choosing the right provider for your business?

Criteria to consider includes;

Currencies supported
Exchange rates and FX markups
Fees and minimum costs
Account types
Regulatory and KYC requirements
Speed of transfers and settlements
Additional features
Stability, reputation and legal oversight

What are the typical fees involved in cross border transfers?

These fees include monthly/ subscription fees, conversion fees, FX spreads, wire transfer fees and sometimes minimum balance requirements. Providers like TransFi eliminate intermediary fees at many levels making them the best payment solutions for your business.

How does TransFi help businesses across the globe?

It provides top notch services and interface at power by connecting users with over 100+ currencies, 250+ local payment methods, and 80+ digital assets, giving both senders and receivers control, speed, and cost savings.

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