Multi-Currency Accounts to support business expansion
Next we’ll address how you can use our Multi-Currency Accounts from a development perspective.
Increase control and take advantage of global expansion opportunities
The key benefit of our MCA is that it allows you full control: the ability to manage your cashflows, to reconcile and differentiate types of flows depending on the account that you want to configure, and it gives you access to markets that you wouldn't otherwise be able to have.
Where your account is domiciled matters
In the United States, it's actually not possible to have a foreign currency account domiciled in the United States in any currency other than the US dollar. This isn’t widely known.
Often FX accounts offered by some US banking or payment platforms are not US-domiciled. They might be foreign currency accounts held by correspondent banks in other jurisdictions that connect to the US banking entity. But you won't have direct connectivity or access to that foreign correspondent bank.
The advantage of the Corpay MCA for US businesses
The differentiating factor is that your US entity can open up our MCAs all around the world, but the accounts can be held in any jurisdiction where we support the currencies.
Our MCA is effectively a way for you to, via the Corpay platform, access foreign currency accounts domiciled in other jurisdictions, but that are still connected to your legal entity in the United States.
You can receive payments cost-effectively in local currencies, in a guaranteed full-value transfer, on-time delivery. You can make payments in the same format, leveraging both the SWIFT wire network and the in-country payment network, and use it like a traditional account or a wallet, an eWallet.
More efficient cashflow management
Let me give you an example of how our MCAs can help with cashflows.
Let’s say you have a customer who pays you a million euros at the beginning of the month. You have euro payables due in the middle of the month.
Rather than converting those funds into US dollars and then buying them back in 15 days’ time (inefficient from a market perspective), you simply receive those euros into your MCA, and wait till the middle of the month to fund those outbound payments from your euro balance and push them out.
There are other ways to manage that euro balance –actually, in any currency in your MCA—to support your business activities, give you more control, and reduce currency risk.
A currency swap could be one choice if you have FX liquidity in a given currency in your MCA. The ‘swap’ would convert the balance into your desired currency (or home currency). When you need to fund outbound payments in that currency, you can buy that currency back at the same exchange rate, taking no FX risk.
A currency sweep is another method that some businesses use for cash flow management. A ‘sweep’ automatically moves funds that flow into one account to another account. The Sweep converts the FX liquidity from your MCA into your base currency, on a given day or given time of day, and simultaneously executes the far leg so you can buy that currency back at a known rate when you need it.
The benefit of these strategies is that you're not tying up your cashflow in the foreign currency. You're converting it to run your business, your AP and AR, accessing liquidity in your home currency without the FX risk that converting and re-converting funds could pose.
You and your finance team will decide what is the best avenue for you to follow.
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