Why multi-currency accounts are essential for modern businesses

Kebbie Sebastian

In today's interconnected global economy, businesses of all sizes - whether physical or digital - often find themselves navigating international markets and managing multiple currencies.

Global payments are a $150 trillion industry - and a sure catalyst for economic growth - but for many, it is also a complex landscape marked by volatility. Moreover, it is an expensive challenge thanks to economic and political turbulence causing fluctuations in currency values. Modern businesses therefore require the right tools to thrive - and in some cases survive.

Among the simplest but most effective solutions is the multi-currency account - an increasingly beneficial way for companies to streamline their international financial operations.

All businesses operating across borders or reliant on imports and exports will be familiar with how a sudden change in exchange rates may see a profitable deal suddenly plummet in value, or result in losses. This can severely hinder a business’ client and stakeholder relationships as well as their bottom lines. Minimising risk is therefore not just a matter of profitability, but future growth.

Moreover, this is why multi-currency accounts are not just useful - they are vital to business success.

How multi-currency accounts mitigate volatility

Multi-currency accounts exist to simplify international transactions and ensure companies can navigate volatility. An e-commerce company based in the United Kingdom, for example, may source materials from China, manufacture them in Vietnam, and then sell products across Europe.

Traditionally, this company (along with the 57% of e-commerce businesses that shop internationally) would face multiple conversion fees, fluctuating exchange rates, and the administrative headache of managing numerous currency accounts. But with a multi-currency solution, this same company could hold, pay, and receive funds in various currencies - drastically reducing conversion costs and simplifying cash flow management.

The result is a more agile business - one that is capable of responding quickly to market changes (or snap elections) without the friction of currency barriers.

Multi-currency accounts support business growth.

There are a couple of ways that multi-currency accounts support growth in terms of territories and customer reach.

Firstly, by leveraging a single platform to manage global currencies, businesses can expand into new regions with greater ease. A finance company in London looking to enter the European market could use a multi-currency account to allow customers to transact in their own currencies, for example.

A second means of helping businesses grow is the ability to reach more diverse customer bases. When a business is able to offer local payment options, it makes it easier for people from all over the world to buy from them. In other words, it removes traditional barriers to entry and instead helps to attract and satisfy more customers.

In this sense, a multi-currency strategy might help a company grow, by allowing it to operate like a local business whilst having global interests. Conversely, it means that even on a local level, that company is able to present itself as truly global. It’s a powerful way to be cost effective and customer-centric.

Finding the right solution for your business

Today, the benefits of having multi-currency options available are crucial for both consumer-facing businesses and B2B companies. Whether you’re running a B2B marketplace or a digital business, embedding such solutions into your platform can be a highly effective way to cut out the complexity, instead streamline your payments, and support your growth.

The good news is that multi-currency accounts are now much more accessible than they have been historically. The boom in fintech providers focused on foreign exchange solutions and payments processes - like our team at Merge - has made it faster, simpler and more affordable to open multi-currency accounts, hold and move money, and even embed these tools directly into your payment processes.

Of course, key considerations for selecting a provider remain. If you are looking for support, it’s vital to consider the range of supported currencies, ease of integration, customer support quality, and a strong compliance and security track record. By focusing on these factors, businesses can find a provider that aligns with their specific needs and strategic objectives.

The democratisation of financial tools empowers businesses of all sizes to compete on a global scale, fostering innovation and economic growth.

Moreover, multi-currency accounts may have already transformed global commerce - but they’re only going to get more effective.

And in a decade increasingly defined by its turbulence, they are essential tools for modern businesses.

Written by
July 8, 2024
Written by
Kebbie Sebastian