The first thing that you do when you learn about a business or have to deal with it is that you look it up. The entire world is online and so are businesses. When you set up a business online, there is always a possibility of finding clients that are not necessarily from your country. Now as foolish as it may sound to have to give up a client because of geographical locations, it is something you can easily evade by being smart and opening an offshore account that accepts multiple currencies.
Gone are the days when offshore accounts were opened to launder money and evade taxes. They are now a way for businesses to legally access accounts that have more security, work with various currencies and get access to important payment systems carried out globally.
The Concept and Origin of Multi-Currency IBANs
A multi-currency IBAN account is an international bank account that diverts transactions in diverse currencies into one principal account and currency.
Back in the day, every country in Europe had its own specific way of organizing payment information while conducting international bank transactions. This diversity in the systems left room for a lot of mistakes and errors. In 2014, the European Union got together and harmonized its method of identifying bank information which is now known as the International Bank Account Transfer Number (IBAN). The IBAN system is now a part of other countries too, that are not limited to the EU. Virtual IBAN accounts are becoming more common by the day, as companies and individuals that have proper documentation, can open IBAN accounts online, without even stepping into an IBAN-favoring country. The rise in virtual bank accounts has led to the sudden meddling of borders in finance, globally. The clients can reside in one country and do business in other, while their bank account is located elsewhere.
It is common to sell products and services in several markets in a progressively globalized and multifaceted world. Multi-currency IBANs can be very fruitful for these businesses as they allow the merchants to collect international payments in diverse currencies and stock them in one centralized account. This allows business owners to make the world their marketplace and benefit from the transactions on a global level.
Benefits of Virtual Multi-Currency IBANs
There are multiple ways by which multi-currency IBANs can help a business. Let us take a look at them:
- Avoid Currency Conversion Tools- When you are paid in a different currency, the internal currency conversion tools make a significant dent in your income. Multi-currency IBANs enable you to keep different payment gateways as they combine all your international payments in a single account. They allow you to accept and offer online payments in several foreign currencies. This way you can receive payments in multiple currencies from the various countries you deal in. The money received in the particular currency stays as is, with a mere fee for foreign exchange.
- Cost-effectiveness- If companies use multi-currency IBAN accounts to set up numerous virtual accounts, like physical accounts, they can exclude the substantial foreign exchange (FX) and transfer expenses linked with altering each payment compared to typical bank accounts. Not just the purchases, they make it very convenient for the companies to deal with settlements. Using multi-currency IBANs lessen the time it takes to process payments, helps with making payments in bulk, and provides prospects to trade with different countries.
- Extra Account Security- One of the most important reasons for keeping money in the bank is Security. It is imperative to keep the financial documents of an organization safe. Stored in redundant, encrypted cloud servers, multi-currency IBANs are safer and less likely to be misrepresented. They have very strict rules for KYC (Know Your Customer) and money laundering. Secure IBANs help provide various payments for foreign exchange and offer a solution to holding different accounts that may or may not be safe.
- Global Yet Local- Multi-currency IBAN accounts empower you to trade in any part of the world on your own terms. Your currency is the language you speak and it hardly leaves scope for any confusion. You get what you charge and there is immense clarity between the trader and the buyer, despite the regional difference. These accounts make you feel like you are trading locally.
- Insights on Spending- You never know where you would strike gold when you deal in different countries. The profits from one country may be much higher than in another. The multi-currency IBANs enable you to record and observe profits on a currency-by-currency basis and from that, you can ascertain how much you need to spend in a country, according to the returns you would get.
- No Multiple Relationships- Payment businesses using a virtual IBAN can access multi-currency, multi-jurisdictional banking without needing multiple bank relationships, as all your money would stay in a single account, and you would not have to deal with different banks pressurizing you to be on cordial terms with them, giving you more time to focus on the services you are looking forward to providing in your business.
- Saves Time- When you have a multi-currency IBAN account, you save a lot of time as you have to no longer worry about managing the reductions that are bound to happen when you are dealing with a different currency. Without a multi-currency IBAN account, you are bound to waste a ton of time while figuring out the deductions, but with it, you have one less item to worry about on your plate.
- Transactional Fees- International payments often require companies to suffer by cutting out a significant chunk from the payment received, as a part of transactional fees. Virtual multi-currency IBANs deal with companies akin to a local account. You save a lot of money by not having to pay for services you will not be using, for example, insurance, credit cards, etc. All this hassle can be easily avoided by keeping multi-currency IBAN accounts so that a more affordable getaway is created for all the companies involved in the transaction.
Multicurrency IBANs are a great way of taking your business to a global level. The world is getting smaller by the day through the power of the internet and it is for this reason that multicurrency IBAN accounts are gaining so much popularity, especially in developing countries. When a business from a developing country gets paid by a business from a developed country, the difference in the currency is significant and it can help you a lot, to grow your business and to make a mark online. Multicurrency IBAN accounts offer a hassle-free solution to most of the problems that are likely to arise when dealing with an international business or a client. They keep your money safe and help you avoid unnecessary expenses and thrive in an economy on your own terms.
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At Capitalixe, we specialize in helping our clients who are often deemed as “high risk” find the perfect banking and payment solution for their needs. We do this by leveraging our network of over 50+ financial institutions, EMI’s and banks worldwide. Our goal is to help save you time and take the pain of finding trustworthy and suitable solutions away from you.
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