Let’s take Italy and its small and medium businesses, which are currently handling more international payments than ever before. As a result, managing multiple currencies has become a crucial part of daily operations.
Good old traditional bank accounts often fall short in this context, with hidden conversion fees, slow transfer speeds, and limited flexibility when dealing with foreign currencies.
That’s why multi-currency accounts were made in the first place and became popular – a modern solution that simplifies financial management and reduces costs.
How? Multi-currency business accounts, in particular, allow businesses and individuals to hold, send, and receive funds in various currencies under a single currency account.
What is a multi-currency business account?
In short, a multi-currency account is a digital account that allows users to hold multiple currencies, send and receive payments in different currencies, all within a single account.
On a technical level, it operates similarly to most bank accounts you’re familiar with. The most obvious benefit from multi-currency accounts is that there is no longer a need to set up foreign bank accounts for each currency.
Multi-currency account providers, mostly Fintech companies, in the first place, were initially built from scratch to make these accounts work and be widely accessible.
Due to its simple business model and minimal corporate cost burden, fintech companies offer low transaction fees, provide transparent currency conversion options, and facilitate easy online account setup.
How does a multi-currency account work?
As we already mentioned, multi-currency accounts allow users to store various major currencies, such as EUR, USD, and GBP, under a single account number or IBAN.
Note, however, that major currencies are a matter of perspective. For an Asian-based business, the Australian dollar, Hong Kong dollar, or Singapore dollar would be more significant than any European local currencies.
This flexibility of multi-currency accounts really shines when businesses can receive payments in one currency or as many local currencies as they need and pay suppliers in another, without any unnecessary currency conversions, thereby saving on foreign exchange fees and transaction costs. And, at the same time, you don’t have to deal with unnecessary foreign currency accounts.
Currency exchange rates are another benefit, allowing users to choose when to convert currency and take advantage of competitive exchange rates.
European fintech providers comply with PSD2 regulations and implement AML/KYC procedures, ensuring security and compliance for all international transactions.
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Benefits of having a multi-currency account
As we establish what a multi-currency account is, take a look at its pure benefits from holding multiple currencies under one account:
1. Save on exchange fees. By avoiding double conversions, multi-currency accounts help businesses reduce conversion fees and costly foreign exchange fees. It is essential for small businesses that want to handle regular cross-border payments in foreign currency.
2. Simplify accounting. Managing multiple currencies from a single dashboard simplifies and makes bookkeeping more transparent. Without it, companies would need to maintain separate foreign currency accounts for each country with which they do business. With multi-currency, businesses can monitor currency balances, track transaction fees, and easily reconcile accounts without having to juggle multiple bank accounts.
3. Faster international payments. With fintech-based multi-currency accounts, international transfers via SEPA, CHAPS, or SWIFT payments are processed faster than traditional banking methods. It enables businesses to maintain better cash flow and pay suppliers or receive funds efficiently.
4. Enhance global presence. Offering clients the option to pay in their preferred currency multiplies your potential audience. A multi-currency account enables companies to accept payments in local currencies, eliminating the need for clients to perform conversions from their foreign currency.
5. Better cash flow. Having control over currency balances helps businesses manage funds more effectively. Companies can decide when to convert funds, optimizing currency exchange rates and maintaining liquidity, and when it’s time to withdraw funds of its foreign currencies.
6. Automation and transparency. Modern fintech platforms integrate automation features, including batch transfers, scheduled payments, and instant notifications. It has small, user-friendly features that reduce administrative burden and increase transparency in all international payments, making it very clear where transaction costs come from.
Who should use a multi-currency account?
Businesses of any size, industry, or profitability that make international transactions or receive payments in multiple currencies.
Freelancers and remote workers benefit, too. Receiving payments in various foreign currencies can be simplified, thereby avoiding the high foreign exchange fees that are typically associated with local currency accounts.
Frequent travelers, of course. A multi-currency account reduces costs for ATM withdrawals, cash withdrawals, and on-the-go currency conversion.
E-commerce owners can find great value in multi-currency accounts as well. Accepting payments in different currencies helps global customers pay in their local currencies, improving conversion rates and customer satisfaction.
A multi-currency account lets even a savings account work this way, and a payment provider or bank will pay interest in the local currencies you have chosen under a single account.
Multi-currency account vs traditional bank account
What would be better: a bunch of local currency accounts and holding multiple currencies in each, or one global account for different currencies?
It depends on the account holder, as separate accounts could work for local payments if you need to avoid exceeding certain revenue limits while maintaining a minimum balance for tax reasons. However, even in this case, opening multi-currency accounts would be easy.
Multi-currency accounts work as a regular business account, but with the option to use different currencies.
On a technical level, multi-currency accounts function as regular accounts merged together. So, technically, multi-currency accounts are a direct upgrade to any regular business account or local currency accounts.
Feature | Traditional banks | Multi-currency accounts |
Supported Currencies | One per account | Multiple foreign currencies |
Fees | High transaction fees, hidden conversion fees because of unfavorable exchange rates, monthly fees | Transparent pricing, lower fees |
Speed | Standard international transactions | Fast SEPA/SWIFT/CHAPS transfers |
Account Setup | Lengthy, high minimum balance requirement for business | Instant access to account opening, no balance requirement, could be minimum balance requirement for maintenance fees and monthly fees |
Flexibility | Limited | Manage all currency balances in one account |
How multi-currency accounts support business growth
Many traditional banks usually require separate bank accounts for each currency, which slows down international payments and charges high foreign exchange fees. It may seem unfortunate for standard bank account users, but traditional banks nowadays operate differently – they offer all services in one place but incur costs for it.
In contrast, fintech focuses on providing payment services, and its multi-currency accounts really simplify processes, cash flow, and reduce costs for account holders.
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What to consider before choosing a multi-currency account
Charges for services. Payment providers must make money on something, so look closely at possible monthly fees, or limit free transactions, minimum opening deposits, or exchange rates.
Another big thing is transaction limits. A small provider may not be able to handle a large volume of transactions or hold multiple currencies as promised, and this is a topic for discussion before account opening.
Regulatory restrictions vary by region; not all foreign currencies may be supported, and not all citizens of certain countries are allowed (for example, due to sanctions). Additionally, opening multi-currency accounts can be difficult due to these restrictions.
Choose only a licensed provider from a reliable jurisdiction to ensure security, compliance, and reliable international payments. It would be better to work with a payment provider from a reliable jurisdiction as a foreigner than deal with a risky local bank.
Check if the account supports cash withdrawals to other payment providers and banks, SEPA/SWIFT/CHAPS payments, or batch operations. Also, take a look at exchange rates; competitive rates could be a huge win for you.
A user-friendly account online is a must-have if you’re about to manage a business account or multi-currency accounts under one global account – usability is very important.
Why Genome is the right choice for multi-currency accounts
If you need a multi-currency account, Genome offers such an option for both individuals and companies! It is how you can get a business multi-currency account within our electronic money institution (EMI):
You need to start a personal or a business wallet inside Genome – the onboarding is completely online;
Once Genome approves your application, you will gain access to your wallet;
Inside the wallet, you will have your first account in the euro currency;
Now you can start additional multi-currency accounts! The process will take just a couple of minutes, and you can have up to 5 accounts in each of the following currencies: EUR, USD, GBP, PLN, CHF, JPY, CAD, CZK, HUF, SEK, AUD, and DKK.
The additional multi-currency account opening is free for all personal wallet clients and low-risk business clients.
You can apply for your multi-currency business account right now. All you need to do is pass the verification process – provide some information about yourself and your company, and upload the necessary documents.
Getting a Genome business wallet unlocks many features for your company! There are multi-currency accounts, of course, and money transfers available! You can also make mass transfers and track all your operations online – anytime you need to.
Additionally, we provide merchant services, allowing you to accept direct SEPA Instant/Credit Transfers via Open Banking.
Business wallets have a shared account feature, meaning your employees can access the wallet to share the workload with you. Also, you can order the Genome token, which allows the wallet owner to additionally authorize all outgoing payments.
Genome is PCI DSS and PSD2 compliant and is licensed and supervised by the Bank of Lithuania.
