A multi-currency form of bank account is one that lets your business collect, pay, and retain multiple currencies. The most important feature is that the account information (beneficiary name, account number, and SWIFT code) is consistent in all currencies.
Most Hong Kong banks sell multi-currency accounts, which typically contain the following currencies at a minimum: Hong Kong Dollar, US Dollar, Euro, British, Singapore Dollar, Japanese Yen, Australian Dollar, and Chinese Yuan.
What kind of organisation will profit from a multi-currency account?
When your company makes and accepts payments in multiple currencies, a multi-currency account will help you save time, money, and effort. A multi-currency business accountwould be beneficial to any cross-border company dealing with different currencies.
Benefit #1: be communicative of the single bank account number to your clients
You will save your consumers the trouble of having to share separate account information for each currency by using the same account details for all the currencies in your account.
Benefit #2: Reconciliation and accounting should be managed with less time
The fact that BaaS opens banks’ capabilities and essentially empowers anyone to be able to create their own financial products, goes against every fabric of the traditional banking industry.
- You will not have to worry about reconciling invoiced and billed sums of various currencies.
- There are fewer accounting changes needed to account for the exchange rate disparity.
Benefit #3: Focus on saving money on commissions on foreign exchange transactions
Let us claim your business only has one currency account, one that only accepts your home currency. When a customer makes a payment in a different currency, the bank will translate it to your home currency (say, HKD) and deposit the funds into your account. To translate these assets, the bank would, of course, owe a significant foreign exchange fee. These commissions will prove to be very beneficial for a company that holds a lot of payments in different currencies. One of the most significant benefits of a multi-currency account is the elimination of foreign exchange fees.
Without any exchange, funds paid to your business in one currency are transferred to your multi-currency account (assuming of course that this currency is one of those accommodated by your multi-currency account).
Benefit #4: When trading currencies, it is important to do so in the necessary manner
You can quickly transfer money from different currencies if you have a multi-currency account. Even if your goal is not to become an FX trader, it gives you the ability to buy and sell currencies at a preferable exchange rate.
The positive news is that these intra-account transactions are usually free of charge from banks. Since you are keeping funds in your clients’ currency on your record, you have not ruled out the possibility of foreign exchange risk. Nonetheless, your danger is not instant.