How Multi Currency Accounts Help Indian Exporters & SaaS

Businesses that deal with foreign trade of goods, services, or SaaS quite frequently often have to face frustrating challenges like delayed settlements or high currency conversion rates and transaction fees. These hindrances are sometimes enough to demotivate businesses or SaaS companies from expanding their operations on a global scale, as they can significantly lower profit margins.

For such businesses, multi-currency accounts offer the perfect solution, as they allow them to transact in the currency of their choice, at reasonable fees, with faster settlements, and improved cash flow visibility, especially when managed through trusted platforms.

But for that, it's essential to have a clear knowledge about what multi-currency accounts are and how they can help businesses scale. This article explores exactly that.

• Multi-currency accounts are a special type of bank account that allow businesses to accept, hold, manage, and send cross-border payments in multiple currencies with a single account. With this account, businesses or individuals don't need to open separate bank accounts for different currencies, and it also eliminates the need to manage them separately. 

• A multi-currency account is used by businesses that often face challenges like high FX rates and transaction fees in foreign currency transactions. It also results in a better customer experience as it lets international customers pay in their local currency. These accounts are also used to mitigate risks that arise due to changing conversion rates. 

• Multi-currency accounts have multiple benefits, including significant cost savings, faster payment settlements without the need for currency conversion, and protection from fluctuating foreign exchange rates. Moreover, there's no need to juggle between different bank accounts for different currency transactions, and it offers better cash flow management and financial planning.

A multi-currency account is a bank account that allows you to hold and manage funds in multiple currencies within a single account. It enables individuals and businesses to conduct transactions in various currencies without needing separate accounts for each. 

This type of account is particularly useful for those dealing with international payments and cross-border transactions. Through this account, businesses accept, hold, and send international payments in multiple currencies. 

Also known as foreign currency accounts or international accounts, these accounts remove the complexity of opening different accounts in different countries and remembering the details of each account. 

Moreover, a multi-currency account works just like a normal account, and you can withdraw money from it using common methods like debit card, wire transfer, or electronic transfer. 

In a normal bank account, a transaction done in foreign currency is first converted into INR at high currency conversion rates. Instead, a multi-currency account helps you receive payment in your client's currency and hold funds in that currency. An added advantage is hedging, which means you can convert that currency into INR whenever you feel the conversion rates are in your favor. 

Let's say you received payment from a German client in Euros. This payment is added to your account balance in Euros, and if you have a vendor in France who needs to be paid in Euros, you can use the same funds. 

In a traditional bank account, both of these transactions would've required an additional step of currency conversion. From Euro to INR in the first case and from INR to Euro in the second case. 

With a multi-currency account, you can:

• Simplify currency management with easy tracking of balances in a single place
• Streamline payments and reconciliation without the need to open separate bank accounts
• Enhance customer experience in foreign markets by allowing them to pay in their local currencies

Multi-currency accounts offer significant benefits to SaaS companies, e-commerce, and other businesses involved in international trade of goods and services. Here's when it's appropriate for businesses to use a multi-currency account:

1. Regular global transactions: Businesses that deal with cross-border payments on a regular basis find the ease and simplicity of a multi-currency account quite beneficial.  

2. Lower FX fees: Multi-currency accounts are also useful for businesses that seek to minimize their FX charges due to frequent currency conversion. 

3. Improve customer experience: By allowing foreign customers or clients to pay in their own currencies, multi-currency accounts boost customer satisfaction and retention. 

4. Better risk management: Holding multiple currencies in a single account allows businesses to combat the risks that often come with currency volatility through hedging.

A multi-currency account enables businesses to transact in almost all the major currencies of the world. These accounts also come with embedded management tools that eliminate the need for manual management. Plus, they are often integrated into the payment platform you use for cross-border payments. Here are some of the key features:

1. Support wide range of currencies

Most of the multi-currency accounts will allow you to transact in a wide range of major currencies, including USD, EUR, CAD, and SGD. For instance, if you have clients in France, USA, and Singapore, you can use your multicurrency account to receive payments in EUR, USD, and SGD respectively without the need to open a separate local account in each of these countries. 

2. Embedded account management tools

Modern multi-currency accounts provide online banking features and financial tools that help you manage your account with ease. These features include tracking, automated reporting, and cash flow visibility that enables better decision-making.

3. Integrated with payment platforms

Multi-currency accounts can also be integrated with popular financial platforms and accounting software. This is particularly beneficial for companies with multi-currency transactions with multiple platforms.

Payment platforms like Xflow allow you to hold more than 25 currencies in your multi-currency accounts. Plus, you can receive payments from over 140 countries. Some of the currencies that you can transact in include:

• U.S. dollar (USD)
• Canadian dollar (CAD)
• Hong Kong dollar (HKD) 
• Australian dollar (AUD)
• Singapore dollar (SGD)
• Japanese yen (JPY)
• Euro (EUR)
• Pound sterling (GBP)

CTA: Choose Xflow for faster settlements, lower costs, zero withdrawal restrictions, streamlined operations, free FIRA issuance, FX certainty, and improved reliability. Sign up now to expand your business on a global scale with Xflow’s multi-currency accounts.

From significant cost savings and streamlined payments to security against fluctuating currency conversion rates and better financial management, multi-currency accounts are particularly useful for Indian exporters and SaaS companies. Here's how these accounts can be beneficial:

• Cost savings: With a multi-currency account, you can save significantly on foreign exchange fees, which can be as high as Rs. 1000 for each transaction with traditional bank accounts. Additionally, you won't need to pay high transaction fees that traditional accounts often incur.
• Operational flexibility: With multiple currencies available in your account, you can quickly pay your international vendors without the delay of conversion. Paying in local currencies also leads to better terms of agreement with international clients. 
• Simplified international transactions: Multi-currency accounts eliminate the confusion that often comes with juggling between different accounts. These accounts also simplify bookkeeping and accounting through the consolidation of all your international financial activities into one account.
• Protection against volatile conversion rates: When you hold money in different currencies, you have a natural hedge against currency volatility, having exchange rate protection and financial security in a fluctuating global marketplace.
• Improved management of finances: By centralizing all your foreign transactions and providing greater transparency through detailed reports, multi-currency accounts provide better cash flow management and improve financial planning

You can open a multi-currency account in India in various leading banks, such as HDFC, SBI, HSBC, ICICI, or DBS. However, for a hassle-free experience, you can also choose Xflow for opening a multi-currency account. 

With Xflow's Receiving Account, its version of multi-currency account, you won't need to visit a bank multiple times for complex paperwork, pay exorbitant fees, and wait for days for settlement of your payments. 

Additionally, Xflow gives you complete visibility on FX rates, transaction costs, and your funds, offering you full transparency. Sign up with Xflow now!

Tip: One thing to keep in mind is to have your identity proofs and other documents like GST certifications, PAN, business registration certificate, and authorized signatory documents ready before applying for the account.

There are various kinds of people or businesses qualified for a multicurrency account. This can be businesses that work with individuals from abroad or those involved in regular foreign transactions. Certain travelers and expatriates are also included in this category. Here’s a list of entities qualified to open a multi-currency account in India:

• Businesses engaged with or hiring individuals from other countries
• Businesses or SaaS companies that conduct foreign transactions regularly
• Frequent travelers and expatriates who manage expenses across multiple countries or currencies
• Individuals involved in foreign currency transactions

Xflow, a modern international payments platform, offers a Receiving Account, its version of a virtual multi-currency account. With Xflow, your international customers can conveniently pay with their country's local bank transfer, which is more reliable and faster.

Moreover, you can compliantly withdraw any amount at your convenience and receive transactions within 1 business day. Here's why Xflow's Receiving Account offers a much better alternative:

• There are no intermediary banks between your customers and your Receiving Account, leading to funds delivery on time with no surprise charges.
• Customers can use local payment options like Fedwire and RTP that settle funds to your Receiving Account instantly and within a few hours, respectively.
• You receive payments in more than 25 currencies from over 140 countries. 
• The bank fee for local transfers is much lower than that of international wires, which offers significant cost benefits to your customers. 
• Payments are deposited directly into your bank account without the need for back-and-forth with your bank to get funds into your account.
• You can withdraw funds received in your Xflow Receiving Account whenever you need to, as often as you want, and in any amount you require.
• You can receive a free FIRA issued by an RBI-authorized bank for every withdrawal.
• You get to know the precise INR amount that will land in your bank account when you withdraw from Xflow’s Receiving Account.
• The FX rates are linked to interbank or mid-market rates, which provide a more accurate understanding of your actual payment cost.

Ready to experience all this and more? Sign up with Xflow now!