A multicurrency bank account gives you all the functionality of a standard account, with added features and flexibility. Whether you make regular or ad hoc overseas transfers, a multicurrency bank account will ensure you have access to the functionality you need, whenever you need it.

Despite the advantages a multicurrency bank account can offer, many people are still unaware of how they work or what benefits they can obtain. In this article, we examine how multicurrency bank accounts operate and who can derive the most benefit from them.

What Is a Multicurrency Bank Account?

A multicurrency bank account allows you to send, receive and hold funds in more than one currency. If you have a standard UK bank account, for example, you may only be able to hold funds in GBP, whereas a multicurrency account could enable you to hold funds in a variety of different currencies, such as EUR, USD, CHF, HKD and more.

Once you’ve opened a multicurrency bank account, you’ll be able to send, receive and hold funds in the currencies that your account provider offers. Crucially, when you do so, you’ll pay lower transaction fees than you would with a standard bank account.

What’s more – a multicurrency account can localise international payments, which reduces your costs and accelerates the speed of international transfers. Instead of relying on your standard account details, you’ll have access to local account details, so each international transfer becomes a local transfer.

How Does a Multicurrency Bank Account Work?

You can use a multicurrency account in the same way as a regular account but there are notable enhancements when it comes to accepting and sending different currencies.

If you’re running a global business and accept payments in USD, for example, a multicurrency bank account allows you to accept and hold the funds in USD, rather than exchanging them into GBP straightaway. You could either choose to wait for a favourable exchange rate to convert the USD into GBP or simply hold the USD in your account. If you then need to make a purchase in USD, you can use the USD funds that are held in your account to facilitate the payment, thus avoiding the need to exchange the currency back into GBP.

Alternatively, if you want to send a payment in EUR to a recipient in Sweden, you can do so by exchanging GBP into EUR and sending a SEPA Credit Payment. Crucially, multicurrency accountholders typically benefit from more favourable exchange rates and reduced fees, so making a cross-border transaction becomes more cost-efficient.

In addition to this, a multicurrency account allows you to utilise forward contracts to secure an exchange rate in advance. By doing so, you’ll have certainty over how the rate will impact the value of your transfer and be able to secure an exchange rate at a time that’s most favourable for you.

As you can see, there are many ways that a multicurrency bank account can deliver enhanced features and functionality to accountholders. Whether you’re routinely accepting overseas payments or regularly making cross-border transfers, a multicurrency account gives you access to the functionality you need, as well as reduced costs and accelerated transfer speeds.

What Are the Benefits of a Multicurrency Bank Account?

If you’re still unsure whether a multicurrency bank account is right for you or your business, take a look at some of the benefits they can offer, including:

Competitive Exchange Rates

An exchange rate can have a major impact on the value of a cross-border transfer, so it’s vital that you can access competitive exchange rates whenever you’re transferring money overseas. As multicurrency accounts offer some of the most competitive exchange rates, they are a great way to maximise the value of your funds and reduce your expenditure.

Lower Fees and Charges

Making international transfers from a standard business account can attract significant fees and, if you’re making regular cross-border payments, this can quickly add up. As multicurrency accounts are designed to manage multiple currencies, however, the fees and charges associated with cross-border transfers are typically lower. This means greater cost-efficiency and less expenditure for you and your business.

Centralised Reporting

When you’re making transactions in multiple currencies, it can be difficult to keep track of your income and expenditure if you’re using a different account for each currency. By harmonising your financial management via a single account, you can gain a clear overview of your income and expenditure at any time, as well as access to granular data.

With all of your financial data in one place, centralised reporting allows you to generate real-time insights whenever you need them. As well as enhancing the control you have over your account, this can shorten workflows and improve accuracy when it comes to reporting your income and expenditure.

Favourable Payment Terms

If you’re working with businesses based overseas, being able to pay them in their domestic currency can enable you to access more favourable payment terms. You may be able to negotiate a better rate for services or products when you can make payments in the supplier’s home currency, for example. In this sense, a multicurrency bank account can act as a benefit that allows you to enhance your commercial performance.

Improved Customer Satisfaction

When you’re engaging with customers from all over the world, enabling them to make a payment in their regular currency can help to boost conversion rates and increase sales. After all, it simplifies the payment process and avoids customers having to factor in exchange rates prior to making a purchase. As a result, you may see lower basket abandonment rates and higher sales figures simply by switching to a multicurrency bank account.

Open a Multicurrency Bank Account with PayAlly

With access to 39 currencies, our multicurrency account provides enhanced functionality and enables accountholders to operate globally. Whatever industry you’re operating in, our multicurrency account allows you to grow your business anywhere in the world. To learn more or to open a multicurrency account, contact PayAlly now on +44 330 777 2244 or email us at info@payally.co.uk.