The next generation of bank accounts or International Bank account numbers (IBAN) are here. The multi currency IBANs are designed for a more complex world where more and more businesses are going global but want to manage their cash flow and cash management from one account.
A multi Currency IBAN is one Bank account number like normal. But the magic is in the setup. The IBAN is pre-setup with 35-50 different currencies. This means regardless of whether your customers pay you in USD, EUR, or INR the IBAN is able to receive the funds AND store it in the correct currency account. this is especially relevant for large multi-nationals and e-commerce players who sell in multiple markets and countries.
the savings for a large player could be significant in terms of banking costs and foreign exchange. Also the fact that you are working with only one account saves a lot of effort and confusion with your customers.
Even though it's a global bank account that can receive multiple currencies, whether it is the right solution for you highly depends on your business setup. For example:
- Small value transactions will be very costly due to landing fees and SWIFT fees
- Your local business might need a local bank account anyway for local operations and local bank systems for example a Indian Bank account for your operations in India.
- The inboard payments options are currently SWIFT wire transfers, SEPA in Europe, or ACH transfers in the US . This can be limiting for some of your local operations.