Tackling The Challenges of Borderless Business

How today's global SMEs can save time and money when transacting in multiple currencies.


Each country has its own currency, that much is obvious. However, we need to know that any action related to money in different countries means using their local currency and dealing with the exchange rates and banking regulations that come along with it.

It is a reality that companies do not let geography limit them when it comes to searching for talent, partners, and clients. Furthermore, the increasing pace of innovation and the shifting to more global mindsets has pushed companies – both of the enterprise and startup variety – to explore markets outside of their own. Thus, for companies who want a global presence, they have to put up with the high volatility and foreign exchange fluctuations when dealing with money.

How should companies now deal with the inefficiencies that working with different currencies bring?

Automatic conversions and exposure to forex fluctuations

Singapore-based jobs marketplace GrabJobs is now currently present in 5 countries, dealing with 5 different currencies. It is not only inefficient, but it also has direct impact on the business. Fluctuations in foreign exchange rates means that receiving payments in a different currency and having them automatically converted to home currency may post either a gain or loss – and there is nothing companies can do about that short of asking their clients to hold off payment and wait for more favourable foreign exchange rates.

Multiple accounts (and fees) for different currencies

Travel company Meego chose the option of opening a different account in another currency to deal with payments to international partners. But while that is a quick fix, there is one large downside to opening multiple accounts. “We have to deal with two minimum maintaining balances. We are a small enterprise, and there are days when the maintaining balance of one of the accounts can be used to make operations easier. But since we need that account, we don’t use it,” Tan adds.

Volatility of the foreign exchange market

Philippine-based style subscription box startup Pormado deals with this regularly. The company often found themselves being asked if they accept payment in other currencies.

This poses two problems for the startup. The first is that they have to figure out the day’s exchange rate, so they will know how much to charge their customers. The second is that since banks only accepts deposits in the same currency of the account, the startup has to ask customers who pay in cash to get their money changed first before paying. As a result, Pormado will always be unsure if they will be receiving the correct amount on the day that customers do pay.

And based on these examples, it is a reality that companies, regardless of size, do not simply stay in one country and use only one currency. But the methods in which they go about handling different currencies is inefficient, inaccurate, and costly.

How do we begin to solve this problem?

For PT Bank DBS Indonesia, it begins with the DBS Corporate Multi-Currency Account (MCA). Their newest product allows businesses to transact in 12 different currencies – IDR, SGD, USD, AUD, CNH, HKD, NZD, GBP, SEK, CHF, EUR and JPY – in different e-wallets, but under one account.

Companies with businesses in other markets can receive payments directly in their currency e-wallets, and have control over when they want to convert the currencies. This means that for companies like GrabJobs, client payments in their local currency can be received and kept in their e-wallet and converted only when the rates are in their favour. In fact, DBS offers preferential FX rates when you convert using their online FX trading platform, DealOnline.

The MCA also answers the concern of having multiple minimum balance requirements – getting a multi-currency account in DBS requires only a minimum balance of IDR 10 million, regardless of how many currency e-wallets you use. Meego, for example, can simply open one account with several e-wallets, without tying down a lot of cash to maintain them.

Additionally, it makes handling different currencies easier and more efficient, as companies could simply set a pricing and receive payment for other currencies. Instead of attending to every request for pricing from customers in another country, companies like Pormado can simply create a price list using different currencies.

Businesses with idle cash can also earn up to 5% interest on their account balances. And to help businesses save costs, there is no monthly fee. Moreover, up to 50 domestic transactions per month are fee, while overseas payments cost just USD 25.

For more information, click here.