Multi-currency accounts for business trips

If you have been travelling abroad frequently you must already be aware of the fact currency cash exchanges can prove quite expensive and cumbersome. When you exchange your money into foreign currency, you’re committing yourself to carry large amounts of cash overseas which can be risky or simply awkward. In addition to that, if you underspent you are going to go back home with foreign currency and have to bother yourself to exchange it again (and lose even more money on fees). For business traveling, cash is one of the worst solutions there are. 


The most common alternative to simply carrying foreign cash, is a credit card that enables overseas payments in another currency, as well as withdrawing cash on ATMs if ever needed. That is definitely a solid solution which can reduce the costs significantly if you are using the right credit card with no foreign transaction fee, but there are still embedded FX rate fees incorporated into each purchase or withdrawal. In other words, there is no fixed fee per transaction, but the foreign exchange rate provided to your by your card will be 2 or 3 per cent worse than the actual exchange rate. If you travel abroad frequently for work and constantly use your card then you could end up spending as much as 30,000 to 40,000 dollars a year through this card. At 3% exchange rate margin, it means a thousand dollars or more just in fees.

 Are there any cheaper alternative for foreign exchange

We have touched on the two most common solutions for foreign exchange spending on a business trip but there are a few more ways to reduce fx associated fees.

The first option for businesses is to buy a prepaid debit card loading with foreign exchange. The ones issuing such prepaid debit cards are normally travel money bureaux like Travelex. Their cards are preloaded with fx in up to 6 different currencies which is great if you are traveling to multiple countries, can be loaded up online which saves time and hassle and most importantly should save money. However, when we tested how much it would cost to buy such a card at Travelex and load it with 10,000 dollar worth of Euros, we figured out that the rate they provide is 10% worse than the actual exchange rate (screenshot below, taken on August 5, 2019, when the actual exchange rate was in fact 0.8942). 


This outrageous rate will mean that upon spending 30,000 or 40,000 USD per year on travel through your card you’ll be spending 3,000 to 4,000 in fees, definitely not a better solution than anything with Travelex, but perhaps there are prepaid cards out there with much lower fees. 

The last solution which is without doubt the cheapest solution as well would be to pay all big expenses such as hotels through bank wires using a 3rd party service provider. Banks are still rather expensive for international wires and take margins of up to 3% per transaction, so using them won’t really save much, but foreign exchange business services can be extremely cheap. It’s definitely not the easiest way to travel abroad but it can save the most money. 

These foreign exchange services are in fact mediators who offer wholesale rates on all foreign currency, so you’re likely to pay under 1% exchange rate. Moreover, there are companies like Transferwise or WorldFirst who have fixed margins and commit to 0.5% in total fees from every transaction, a far cry from Travelex’ prepaid credit card with 10% foreign exchange difference. Another idea to use a company like WorldFirst or TransferWise is that you have a multi-currency account online. That means that any money deposited into your system in any currency can instantly be exchanged for another currency seamlessly online. As a business person, you can use World First for many more benefits than simply paying for your overseas travel expenses - WorldFirst’s World Account enables you to also accept payments from your suppliers in foregin exchange to local bank accounts provided to you across the world.