Get a USD Account From Outside the US to Accept USD Payments

Despite a tough few years and a growing challenge from China, the USD remains the world's dominant currency. International business is conducted in dollars and having access to the greenback guarantees any business or private citizen increased trading power. But for non-US citizens who don’t have a USD bank account, having to constantly buy dollars and pay forex fees can prove expensive over time. This can prove very damaging for online traders who often run very tight margins. However, there are a few cost effective workarounds available. 

Online Business

It probably doesn’t even need to be said that in 2022, the online marketplace is absolutely booming. The COVID pandemic saw a monumental upsurge in e-trading as more and more established businesses shifted themselves online. Perhaps more interestingly though, digital products have also been carving up an even bigger piece of the market and are set to keep up their meteoric rise.

If you ever bought anything online (and the overwhelming chances are that you have) then you may have noticed that the price was quoted in USD regardless of both your location or the seller's location. Alternatively, if you have ever noticed that a product you are buying is priced at a strange amount in your own currency (such as £15.18) then this is probably because it has been ‘invisibly’ converted from USD, and the end seller is receiving your payment in USD.

Whereas we are still a fair way from having a one world currency, the world wide web does kind of have a single currency and it's the USD (sorry BitCoin, we know you tried). 

The advantage of this is that everybody knows (*to an extent) where they stand. Whether your native currency is the British Pound or the Colombian Peso the chances are that if you are quoted a price in USD you can mentally calculate a pretty good approximation and work out what it means to you. It levels the playing field and makes international trade easier - indeed, it is not uncommon for two “foreign”, non-US companies to transact in USD even though none of them actually has a USD bank account.

The disadvantages though, are that non-US entities (companies, traders or customers) can end having to pay to play as we shall explain.

Anybody who does not have a US bank account is incurring fees every time they use it to transact in USD. That means that if you pay for something in USD using your Swiss bank account, your bank will change the currency for you before forwarding the money to the recipient and will charge a premium for the privilege. Likewise, if you are paid by a client in USD, then your bank will also deduct a premium (typically 3-5%) for changing the Dollars into Swiss Francs before they credit them to your account. 

To be fair, the service the banks offer is often pretty ‘seamless’ which is why many account holders tolerate the fees. However, anybody regularly transacting in USD from a foreign  bank will find that the fees start to add up very fast.

How to Receive USD Payments For Cheap Using Paypal

On the face of it, Paypal solves these problems completely. Paypal operates in most countries on earth, offers fast and seamless international payments and also handles any currency conversion for users. For example, if you buy something from a US based seller using your German, Euro bank account, then Paypal will do the conversion for you, tell you exactly how many Euros you will pay, and you may not even notice you are ultimately being charged in dollars. 

Paypal also allows users to hold a balance in a wide range of currencies iclueng the USD. If a client pays you via Paypal in USD, you have the option to keep the money in USD, or you let Paypal convert it for you. As such, Paypal remains a very popular, easy option for many online traders.

However, the downsides of Paypal are actually huge and on closer inspection, the platform is not remotely “cheap” to use at all. 

Firstly, Paypal charge’s recipients (who are usually sellers) 4% on all transactions. For an online seller trying to etch out a living, that can make the difference between eating and not eating. Furthermore, the exchange rates they use are usually just as bad or even worse than the ones the bank uses and so the buyer can also end up paying an extra 4% too often without ever even realising it - now you know exactly what Elon Musk is the wealthiest man alive right?

Opening A USD Bank Account

The optimal solution for anybody who trades in USD, is to open a USD bank account. The account balance is held in dollars and any payments made from it or into it will default to dollars. Therefore whenever a USD account holder buys anything in USD, or is paid in USD, there are no forex rates and the bank is not able to levy a premium.

However, opening a US bank account is difficult for anybody who is not resident in the US and in fact, even some US residents find it hard! Therefore this option is a non-starter for most global online traders or for any small enterprises who do not have a US operation.

Virtually Opening a USD Account Outside the USA

Savvy online traders are fast turning to virtual multi currency accounts. A multi currency account is simply a bank account which lets the customer hold balances in currencies other than their native one. For example, a multi currency account holder based in London can have a USD account in UK - basically they would hold their main balance in GBP, but then have a USD sub-account balance which they can use to buy or sell in USD.

This ultimately saves the account holder from having to incur the hidden exchange fees everytime they transact. Furthermore, it also indemnifies them against fluctuations in the forex markets and they do not need to worry about their native currency losing value against their ‘second’ currency.

Multi currency accounts are fast growing in popularity, acceptability and in scope. At the time of writing, there are 5 UK based fin-tech e-banks (Monzo, Revolut, Wise, 3S  ) offering multi currency accounts all of whom are approved by Amazon and a host of other major online platforms. Between them, these 5 virtual banks can offer sub-accounts in a wide range of currencies including the USD, the Indian Rupee, Danish Krone and Thai Bhat. Also, whilst they are headquartered in London, they are not limited to serving UK based customers and can offer accounts to applicants from all over the world.

Final Thoughts

As we have seen, whilst the world continues to trade using dollars, the days when that trading carried extra costs are perhaps numbered. Even online sellers and business owners without access to a USD bank account can now hold a USD account outside the USA and keep a healthy, dollar balance. 

So next time you need to work out how to receive USD payments for cheap, then simply see if you can open a multi currency account with one the fin-tech five.

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