multi-currency wallet
Pedro Pinto August 27, 2021 11:06 am

What is a multi-currency account, and do you need one?

What is a multi-currency account, and do you need one? 

Currencies make doing business internationally a challenge. Plus, international transfer costs add up thanks to exchange rates, bank fees, transfer delays, and more bank fees… 

Surely, there has to be a better way?

If your business operates internationally, you’ve likely heard about multi-currency accounts. This new breed has taken the world by storm — and for good reason. 

A multi-currency account will drastically improve many aspects of your business’s finances by melting away international borders and streamlining your financial management processes.

But what is a multi-currency account exactly, and should you get one?

In this quick-fire guide, you’ll learn everything you need to know about multi-currency accounts — including their benefits, how they work, and whether you should get one.

Let’s jump in.

What is a multi-currency account?

Multi-currency accounts are exactly what they sound like — they enable you to receive and send money in more than one currency. For example, Neat’s multi-currency wallet lets you manage US dollars, pounds, euros, and Hong Kong dollars all from one place through an online dashboard.

Neat Multi-Currency wallet

7 benefits of business multi-currency wallets

Multi-currency wallets provide enormous benefits to businesses operating internationally. For example, your business’s multi-currency wallet can help you to avoid hefty fees, lengthy transfer times, and the hassle of managing many different accounts.

Let’s take a closer look at seven key advantages of using multi-currency wallets.

1. Convenience

Probably the most attractive benefit of multi-currency wallets is the unrivalled convenience and simplicity they provide.

Managing multiple bank accounts in different currencies is time-consuming and inefficient. For example, you’d need to reconcile receipts and invoices across various currencies and consider exchange rate differences and fees. Typically, this will involve logging in to many different applications and compiling information in an excel sheet.

If that’s not enough, setting up and managing bank accounts in different jurisdictions worldwide can be incredibly challenging — and occasionally, impossible.

However, effective cash flow management is essential to business success. And when your business deals in multiple currencies, it’s even more important to streamline your financial processes and bookkeeping.

Multi-currency wallets make managing your finances much more efficient.

When it comes to administration, everything is accessible in one dashboard, and there’s little need to reconcile payments across different currencies. There are also fewer adjustments needed for exchange rate differences.

Plus, most multi-currency wallets are quick and easy to set up. For example, you can apply for a Neat account and access a multi-currency wallet in less than 15 minutes. (You can also integrate Neat with Xero’s accounting software for effortless accounting.)

2. Employee expense management

Similarly, managing employee expenses across different bank accounts and currencies can be a challenge. For instance, should you issue employees with many cards — one for each currency they need? And if so, how will you manage limits and monitor expenses effectively?

Multi-currency wallets can make managing employee expenses a breeze.

For example, the Neat Account enables you to create, freeze, or cancel employee cards in minutes via the Neat dashboard. You can also set customised monthly spending limits and see every employee expense in a central dashboard.

3. Reduced costs

Bank accounts are notoriously expensive when making international payments. Many business bank accounts also charge a fee for simply having the account, and these fees can rack up quickly when operating many different bank accounts.

A multi-currency wallet allows you to avoid many of these fees.

For example, you’re able to accept customer payments into your wallet and pay your suppliers in their local currencies — so you can avoid international transfer and exchange fees.

And with services like Neat, there’s no monthly account fee, and you can make transfers to more than 35 countries at highly competitive rates.

4. Foreign exchange advantages

It can also be challenging to manage foreign exchange (also known as FX or forex) costs.

For example, when a customer pays you, you’ll usually be forced to exchange the money into your local currency during the payment process. As a result, you’re at the mercy of fluctuating exchange rates — if the rate isn’t in your favour, you won’t have an opportunity to wait until the rate improves before exchanging your money.

On the other hand, multi-currency wallets allow you to avoid exchanging money and capitalise on exchange rate fluctuations.

Bottom line, however you decide to manage your money, a multi-currency wallet allows you to move money around in the most cost-effective way.

5. Speed

International transfers are generally incredibly slow, often taking days to arrive safely.

However, speed is an essential aspect of effective cash flow management.

Many multi-currency wallets provide local collection details for each currency held. As a result, when users can take advantage of local payment networks, they not only avoid international transfer fees, but payments are also processed much faster.

6. Better customer experience

The more friction you can remove from a customer’s payments process, the better. 

Asking clients to send international transfers to pay you isn’t exactly the most attractive way to sell your products or services. On the other hand, a straightforward, streamlined payments process will help ensure the sale goes through and that you get paid on time.

For this reason, it’s a good idea to allow customers to pay in their preferred currency. So, if you’re selling to customers in Europe, deal in euros. And if your clients would prefer to pay you in US dollars, accept US dollars.

With a multi-currency wallet, it’s dead-simple to accept payments in whichever currency your customers prefer.

7. Improved supplier relations

It’s not just customers that appreciate dealing in their preferred currency — your suppliers will also thank you if you pay them in their local currencies. It’s also possible to negotiate more advantageous payment terms by paying suppliers in their preferred currency.

Also, many suppliers around the world aren’t yet able to accept foreign currencies. Consequently, when you can pay suppliers in their local currency, your business can tap into new sourcing opportunities. 

For example, through a Neat account, you can make payments to over 35 countries. So, if there’s a supplier in India you’d like to work with, you can pay them in Indian rupees. 

 

How do multi-currency wallets work?

Multi-currency wallets enable you to easily collect payments in various currencies and support your payments to third parties.  It’s also very easy to withdraw any funds collected into your multi-currency wallet. 

In addition to the standard features you’d expect, you can also view, manage, and convert currencies collected in your wallet from within one dashboard. Some multi-currency wallets like Neat even offer debit cards to further support your business’s financial management. 

All in all, after using standard bank accounts, switching to a multi-currency wallet provider is a relatively straightforward and intuitive experience.

Do I need a multi-currency wallet?

Now that you understand the key benefits of a multi-currency account and how they work, do you need one?

To figure out whether a multi-currency wallet is a good investment for your business, we’ve created a list of questions for you to consider — do you:

  • Receive payments from abroad from clients, customers, or other third parties?
  • Regularly send international payments to suppliers, contractors, or other third parties?
  • Sell products and/or services to customers in other countries?
  • Run a business that has the potential to expand internationally?
  • Source products or materials from suppliers in other countries?
  • Have employees based in other countries?
  • Hire freelancers, consultants, and agencies in other countries?
  • Travel regularly? 

If you answered “yes” to any of these questions, you could likely save time, money, and hassle by getting a multiple-currency wallet, such Neat.

Final Thoughts

As the world shrinks and cross-border commerce accelerates, bank accounts have quickly become impractical, burdensome, and unmanageable.

As a result, innovative companies have developed borderless alternatives, such as multi-currency wallets to empower global entrepreneurs, start-ups, and SMEs, with benefits such as:

  • Increased flexibility and convenience
  • Reduced costs
  • Faster transactions
  • Improved customer and supplier relations

In summary, multiple-currency wallets are a no-brainer for forward-thinking businesses managing finances across borders.

Access a multi-currency wallet with Neat 

Neat provides one of the best multi-currency wallets out there:

  • Receive and manage money in HKD, USD, EUR and GBP
  • Enable payments to over 35 countries at competitive rates
  • Integrate with global platforms like Amazon, Stripe, Shopify and Paypal 
  • Enjoy zero monthly fees and no minimum transactions
  • Seamlessly integrate your Neat account with Xero for easy bookkeeping
  • Issue multi-currency Visa cards to your employees
  • Manage and monitor all employee expenses in one place

Sign up for your own multi-currency wallet in minutes today!

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