The pandemic has accelerated a fundamental shift in how the world does business, simultaneously creating economic challenges and opening up new opportunities. These events have invited us to look beyond Malta and consider the potential for building a borderless business.

As a result, we must also consider other new developments, such as the need to restructure supply chains to accommodate a global customer base. One major–and often overlooked–challenge is the need for banking solutions that accommodate cross-border trade. Meanwhile, customers and business leaders alike increasingly prefer contactless payment options, instant transfers, and digital transactions, which have increased dramatically in the past few years. 

International payment challenges for SMEs

If your business operates internationally, it’s essential to efficiently handle cross-border payments. Small and Medium Enterprises (SMEs) in particular must find innovative ways to buttress their payment infrastructure, if for no other reason that they’re an incredible force for the global economy: They account for 90% of businesses worldwide and account for 50% of global employment.  

Yet SMEs remain in a rather precarious position when it comes to cross-border trade. They face multiple banking challenges: 

• Hefty transaction costs: The global average cost for remittances stood at 6.38% of the transaction amount in Q1 2021. Globally, banks on average charge 10.66% of the amount sent.
• Slow processes: Paper-based transactions take much longer than digital ones, and they also increase the risk of fraud.
• Currency fluctuations: Exchange rates can change quickly and widely, which can translate into unexpected gains and losses in revenue.

Multi-currency wallets offer hyperlocal banking for global customers

One emerging solution to these challenges is the multi-currency wallet, which allows you to send and receive money in a variety of currencies, all from one central dashboard. Having a multi-currency wallet means that global customers can do business with you in their preferred currency. Quite simply, it allows hyperlocal banking for global customers.

A multi-currency wallet offers several key advantages.

Faster transfers and payments

Payment speed is a critical aspect of effective cash flow management. One 2020 study of Maltese companies revealed that cashflow was the most significant factor leading to insolvency. However, banks can be reluctant to provide working capital loans to SMEs and startups. Meanwhile, the conventional international transfer can take days to clear.

Multi-currency wallets can enable local collection for individual currencies, giving you the option to take advantage of local payment networks:

• Payments are processed faster and cheaper.
• You can more easily turn to local suppliers to fulfil buyer requirements.
• Customers get a better experience shopping in their own currency.

So, if a business is taking raw materials from Europe, they can simply pay in euros. If a customer in the US wants to pay in US dollars, the company can allow them to do so too. Overall, streamlined payments ensure steady business operations and timely payments. This also helps circumvent the higher cost of transfers.

Avoid oppressive transaction costs

Banks tend to charge high fees for international payments and many corporate bank accounts can charge a fee for simply maintaining the account. If you’re operating several accounts or making frequent international payments, these fees can easily turn into a significant sum.

A multi-currency wallet helps to reduce these costs, while also providing greater transparency.

FX fees are transparent, and multiple accounts can be created on a single platform for free. Your company can receive money in your local currency, so you’re not at the mercy of exchange rate fluctuations. You can also pay suppliers in their local currencies to help them avoid similar fees, improving supplier relationships. Overall, it’s an opportunity to diversify your revenue drivers.

Enjoy greater convenience

Managing multiple bank accounts for different currencies is tedious and inefficient. For example, it takes a lot of time for account reconciliations across various currencies (not to mention the fees and exchange rate differences). Your team probably spends countless hours logging into many different platforms and collating all the information into a single spreadsheet. Efficiently managing all these bank accounts across multiple jurisdictions is sometimes all but impossible.

Rather than opening multiple business accounts, the multi-currency wallet can help streamline bookkeeping and financial processes. Take, for example, managing employee expenses worldwide. Employees might receive various cards one for each currency, making it difficult to monitor limits and expenses. Using a multi-currency wallet, employees’ virtual cards can be issued and monitored from one single platform.

Offer online services in different regions

The ability to let customers pay in their native currencies is a big deal, especially for SaaS, subscription-based companies, and ecommerce stores. A multi-currency wallet lets you avoid shopping cart and pricing page abandonment due to exchange rate-induced sticker shock.

For example, if a business is based in the US, and its customers are in Australia or Canada, it’s an easy mistake for buyers to assume that the $ sign is in their home currency, rather than the US dollar–resulting in an unpleasant surprise at checkout. This is a leading cause of cart abandonment, and companies can easily address it with a multi-currency business account.

Subscription-based businesses, say a B2B SaaS product, face a similar challenge. Price localisation is extremely important because a customer might make a one-time payment in a foreign currency–but they often won’t risk recurring payments that could fluctuate every month with exchange rates.

Thus, multi-currency account support is a serious opportunity for business growth.

At Fyorin, we understand the pain points of businesses conducting international transactions. Through our solution, we enable you to open a business account with a dedicated IBAN to send and receive payments in 40+ different currencies. For smooth and faster reconciliations, you can also create sub-accounts to compartmentalize your receivables mirroring your accounting ledger.  

We can also help you to better control your spending by making use of our corporate virtual cards and earn cashback on every transaction. These virtual cards could be used to better manage and track your spending on online ads, subscriptions or employee expenses.

Contact us directly to help find more how we can help you or otherwise contact us to know how we can help you in making your financial operations more efficient.

James Camilleri is co-founder and CEO of Fyorin