According to statistics, countries in Africa receive over $40 billion from foreign countries every year. In this light, the World Bank, in 2021, reported that Africa lost $5 billion to charges when sending money through local banks and money transfer companies.
This is one reason why multi-currency accounts exist. They help you save money when you execute international wires. This article explains multi-currency accounts, how they work, and why you need them.
What Is A Multi-currency Account?
A multi-currency account, also known as a foreign currency account, allows you to transact and hold multiple currencies (Australian Dollar, Canadian Dollar, Japanese Yen, etc.) from one account. It works like a traditional bank that allows you to send and receive money. But unlike the bank, you can see all your currency balances at a glance. This saves you the stress of opening different accounts for different foreign currencies.
A multi-currency account can be used as a foreign bank account in another country or an intermediary account to connect a local bank account to a bank account abroad.
Sounds interesting, right? Let's dive more into how a multi-currency account works and how it can benefit you.
How Do Multi-Currency Accounts Work?
Just as we stated earlier, multi-currency accounts are not much different from standard banks. They allow you to send money abroad, receive payments, hold money, and make cash withdrawals. But they sort of work differently in the following ways;
1. High-Speed Transactions
A multi-currency account works with speed to process transactions. How's that possible? It is possible because international payments take longer to complete, unlike local transfers that take a very short time.
So here is the brainer. If local transactions are often completed within a very short period, you can easily send your funds across borders in no time. How?
A multi-currency account that operates online or through a mobile application gives you an automatic access to several local currency accounts. So, you are basically dealing with different local payment networks simultaneously from one account. Cool? Yeah!
2. Local and Foreign Withdrawals
Since they are multi-currency accounts, they can deal with home and foreign bank accounts. Multi-currency accounts are equipped with the ability to withdraw local and foreign currencies easily. Many multi-currency accounts offer physical and virtual cards that they can use for ATM withdrawals and in other money-dispensing institutions.
3. Physical and Virtual Cards
Multi-currency accounts work with physical and virtual cards. Since these accounts combine currencies from different accounts, it is more convenient to issue offline and online cards. Users can easily make everyday purchases and pay for services.
Advantages Of A Multi-Currency Account
Now that you've known how foreign currency accounts work, let's check their pros.
1. Swift Transactions
The world is evolving by the minute, and so has the financial sector. Just as we explained above, you can hardly experience a slow transaction with a multi-currency account because they are built to facilitate swift payments. To say the least, they process transactions at the speed of light.
2.Low Or Zero Transaction Fees
Low or zero fees are one of the peculiarities of multi-currency accounts. In most multicurrency accounts, charges on foreign transactions are really low, unlike what the traditional banks charge. Multicurrency account providers like Kyshi charge 1% for foreign transactions.
Also, many multi-currency account providers require no monthly fees and take no charges for card maintenance and local transactions.
3. Easy Access To Foreign Exchange
Touring foreign exchange markets without single-currency accounts can be very disappointing. One of the reasons is the constant exchange rate fluctuations. Imagine that you have an account that only accepts British Pounds; you may lose whenever you receive payments from other currencies because of currency exchange rates. However, owning a multi-currency account gives you enough leverage. You can easily accept payments in any currency and send out funds without losing.
Also, since a foreign currency account works like a regular bank account, you can hold your money in it and wait for favourable and competitive exchange rates to convert your currency. In essence, no matter what you’re doing in the forex market, a multi-currency account helps you to accept payments and send money at low costs.
4. Single-tap Access To All Your Funds
What is more convenient than monitoring and controlling your funds from one account? A multi-currency account gives you that leverage. It helps you to manage money and exchange currencies at low costs.
You don't need to open a new bank account overseas when you have a foreign currency account. It also is important to note that a multi-currency account even has added advantages compared to an expat bank account.
5. Leverage For International Businesses
As one who owns a business(es) across the globe, you should have multiple currency payment options. Your customers should have a seamless experience when paying for your goods or services. And yeah you need to stay above the competition. Business multicurrency accounts help you stay at an advantage of retaining old customers, attracting new ones, and having more sales.
Do You Need A Multi-Currency Account?
Now that we have seen how a foreign currency account works and what advantages you can get, the next question is, “Do You Need A Multi-Currency Account?”
These criteria best answer if you need a multi-currency account or not.
1. You Make Frequent Transactions With Different Currencies
If you pay for goods and services in different currencies, your best bet is a multi-currency account (global account). It helps you pay low foreign transaction fees and not lose your money to unfavourable exchange rates.
2. You Market Goods And Services Across International Borders
Just as stated earlier, you are at an advantage when you supply multiple payment options to your customers and clients. This is a solid reason why you need a multicurrency account.
3. You Have Employees Abroad
You do not want to lose your money to exorbitant charges and exchange rates when paying your foreign workers. So yeah, you need a global bank account to pay them. Cool? Yeah!
Foreign currency accounts are a great deal for international transfers. While they do not take foreign atm fees, they offer low fees on foreign transactions and sometimes help you avoid transaction fees completely.You can use Kyshi to make international payments between the UK and 20 African countries at a ridiculously low charge– 1%. The extra fun fact is that you can send money internationally at your own rates.