Project Description

Currency Exchange board showing flags and abbreviations of Swiss franc, Great British Pound, US dollar, euro, Japanese yen, Chinese renminbi, and Canadian dollarA multicurrency account (MCA) is an account held outside the U.S. in a single, freely-traded, global currency — such as euro or yen. MCAs are most commonly used as treasury tools to manage foreign exchange exposure. They can also be used as liquidity tools to contain and control cash assets.

Here are four ways multicurrency accounts can simplify and improve your cross-border business:

  1. Receivables Invoice and receive payments from international customers in their local currency. This may give you a competitive advantage, and you won’t pay foreign exchange conversion costs until — and unless — you convert cash in the account to U.S. dollars or another currency.
  2. Payables — Pay vendors in their local currencies. This allows you, rather than your vendors, to control the foreign exchange component in negotiations.
  3. Visibility — Expect your U.S. bank to include your MCA balances and activity along with your domestic account balances and activity on your statements and BAI and online reports. Overlay a foreign bank account with an MCA to gain visibility into your global cash picture.
  4. Mergers and acquisitions — When an international acquisition is payable in the currency of the acquired company, lock in the exchange rate by buying the currency in advance and holding it in an MCA until closing.Sometimes a separate share purchase or asset purchase agreement is involved and settles months after the change-in-control date. In this case, you might open an MCA, allow payments made to the acquired company to flow into it, then use those funds to settle the purchase agreements at a later date.

Once all paperwork is completed, it takes only one to five days to open a multicurrency account. In contrast, due to other countries’ restrictions and requirements, it may take weeks or even months to open an account with a foreign bank.

For more information, contact your Wells Fargo representative or fill out the Contact Us form on this site.

Balances held offshore, including multicurrency accounts and foreign deposits, are not FDIC-insured, may lose value, and are not guaranteed.