Online Sellers Are Using Virtual Accounts to Go Global From Home
The advantages of eCommerce over traditional retail has drawn new and existing businesses for well over a decade, but in the face of challenges presented by COVID-19, adaption to online selling or a hybrid model has become a necessity for many.
The rise of eCommerce, led by giants such as Amazon, has led to the creation of global marketplaces that span national borders and shrink the distance between merchant and customer to zero. In terms of finding customers, the world has been reduced to two dimensions. Even for physical fulfilment, shipping has become so efficient and robust that most parts of the globe are reachable in days.
Where geographical borders have continued to present a challenge is in international money transfers. Online payments handled by card networks, payment processors and banks are efficient for domestic transactions, but this decades-old system shows its inadequacies when cross-border transactions are involved.
When an eCommerce merchant decides to sell outside their home country, the repatriation of sales revenue is priced at 3.5-5%. There are real costs associated with international wire transfers and currency conversions, but nothing like the arbitrarily high rates charged when you link a bank account to a foreign marketplace or payment gateway.
This has led online merchants seeking international expansion to embrace the advantages offered by virtual accounts. Virtual accounts allow the user to have unique bank account details without having a physical account. When they exist within a platform like Currenxie’s Global Account, they span many different jurisdictions and currencies. That means that a user can have account details in several countries, and even have a multi-currency virtual account capable of sending payments worldwide.
What this means for a merchant is the ability to link a domestic bank account wherever they choose to sell with the corresponding marketplace or payment gateway. Not only does this mean receiving faster payouts, they avoid all the forced currency conversion and cross-border fees that would otherwise eat into their profits. In other words, they get paid like a local business would.
Many online businesses choose to locate in Asia, due to the proximity to suppliers. A company based in Hong Kong with customers in the USA and Europe – whether selling on third-party marketplaces or their own online store – can have virtual accounts in each of those regions to accept payments locally. They can also have a multi-currency account and use it to pay business expenses: for example, a supplier in China. If they need to convert currencies, they only pay a foreign exchange fee based on the real market rates, without expensive cross-border fees.
This gives merchants the peace of mind to expand their business in new regions knowing they can access a domestic bank account there. Furthermore, there’s no need to travel for face-to-face meetings. With fast, online account opening, 24/7 cloud and mobile access, and no set-up or maintenance fees, Currenxie’s virtual accounts are giving merchants the business account and modern alternative banking tools they need to go global in a digital world.