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How to Manage FX Risk for Your Business in Vietnam
Vietnam's economy has seen impressive growth in recent years, with a GDP of over $340 billion in 2023. As a business owner, Vietnam presents exciting opportunities for expansion and growth. However, navigating the complexities of foreign exchange (FX) fluctuations can be a hurdle. In fact, a survey by the State Bank of Vietnam found that over 60% of businesses in Vietnam face significant FX risk exposure.
This guide aims to provide actionable insights on how your business can manage FX risk effectively and implement prudent financial practices as you enter the Vietnamese market.
Understanding FX Risk in Vietnam
Let’s explore FX risk in action – the potential for unforeseen and uncontrollable currency movements that disrupt your financial calculations and revenue. In Vietnam, the Vietnamese Dong (VND) has experienced fluctuations against major currencies like the US Dollar (USD) and Euro (EUR) in recent years.
For example, if you import machinery from Germany and pay in EUR, a sudden weakening of the VND against the EUR would significantly increase your costs. Conversely, a strengthening VND could make your products less competitive in international markets.
🔑 Read More: Wallex Industry Insights: Vietnam's Textile & Garment Industry
Conditions & Regulations in Vietnam Contributing to FX Risk
Vietnam's regulatory environment and the characteristics of the Vietnamese Dong contribute significantly to FX risk instability. Understanding these factors is crucial for businesses operating in the region:
Foreign Exchange Controls
The State Bank of Vietnam regulates foreign exchange transactions, which can lead to sudden changes in currency availability and exchange rates. For instance, there are restrictions on the amount of VND that can be converted into foreign currencies, which can create liquidity issues for businesses needing to make international payments. Companies may find themselves unable to access foreign currency when needed, impacting their ability to settle obligations or invest abroad.velopment and digitalisation of educational material and learning, the Vietnamese government has cleared a path for the growth and development of edtech solutions.
Limited Convertibility of the VND
The Vietnamese Dong is not a freely convertible currency, meaning it cannot be taken out of Vietnam. This limitation poses several risks for foreign-owned projects that generate revenue in VND:
Devaluation Risk: Businesses are exposed to the risk of devaluation of the VND until revenues can be converted into foreign currency. For example, if a company earns VND from local sales but cannot convert it into USD immediately, any depreciation of the VND during the waiting period can diminish the value of their earnings.
Availability of Foreign Currency: There is a risk that foreign currency may not be available at the time of conversion. This situation can occur during periods of economic instability or when the government imposes restrictions on currency exchanges, leading to unpredictable cash flow.
Regulatory Restrictions: Currency cannot be converted or remitted except for permitted purposes, such as repatriation of investment proceeds or dividends, and at specific times (e.g., once a year for dividends). These regulations can complicate financial planning and cash flow management for businesses.
Market Intervention
The government may intervene in the FX market to stabilize the VND, leading to unpredictable currency movements. For example, if the government perceives that the VND is depreciating too quickly, it might sell foreign reserves to support the currency. Such interventions can create volatility and uncertainty, making it difficult for businesses to forecast exchange rates accurately.
Economic Factors
Inflation rates, trade balances, and geopolitical events can also influence the stability of the VND, adding another layer of risk for businesses operating in Vietnam. For instance, rising inflation can erode purchasing power and lead to a depreciation of the VND, while trade imbalances can put additional pressure on the currency. Additionally, geopolitical tensions in the region can create uncertainty that affects investor confidence and currency stability.
These factors highlight the importance of recognising FX risk exposure and the need for a trusted payments specialist to navigate these complexities. Without proper management, businesses risk losing margins due to unfavourable currency fluctuations.
🔑 Read More: Wallex Industry Insights: Philippines
Measures to Mitigate FX Risk
While we cannot control or predict FX market movements, we can take measures to manage and reduce exposure to FX risk, particularly when doing business in Vietnam with the Vietnamese Dong (VND). Here are several effective strategies to consider:
Stay Informed
Staying informed is one of the easiest ways to begin managing your FX risk. Keeping an eye on market trends and forecasts, especially for the VND against other currencies, is crucial. Resources such as financial news outlets, central bank websites, and FX analysis platforms like Bloomberg or Reuters can provide valuable insights.
Additionally, subscribing to the Wallex weekly newsletter can keep you updated on bank-beating rates and the latest developments in key markets, including the US and Europe, which may influence the VND.
Track Historical Data
Tracking historical data is another important step in mitigating FX risk. Most financial websites and platforms offer charts that allow you to analyze past currency movements. Understanding how certain developments or decisions made by governments or central banks affect currency markets can help you identify patterns that may indicate potential future fluctuations. For example, if you observe that the VND has historically depreciated during certain economic events, you can prepare accordingly. However, it is essential to remember that past performance does not guarantee future results, so it is wise not to rely solely on historical data.
Hedging for FX Stability
Hedging for FX stability through various financial instruments can provide a powerful toolset to manage these risks. These instruments allow companies to lock in exchange rates for future transactions, providing predictability and stability in an ever-changing market.
Forward Contracts allow you to lock in a future exchange rate today for a specific transaction date, protecting your profits from adverse currency movements. For example, if you anticipate a payment of VND 2 billion for imported goods in three months, you could enter a forward contract today at an exchange rate of VND/USD 23,000, ensuring that you maintain this rate regardless of market fluctuations.
Currency Options also offer flexibility while providing some protection. A currency option gives you the right (but not the obligation) to buy or sell a currency at a specific price (strike price) by a certain date (expiry date). For instance, if you expect the VND to weaken against the USD in the next six months, you could purchase a USD call option with a strike price of VND 23,000. This would allow you to buy USD at this rate, even if the market rate rises beyond this point, thus protecting your costs for imports.
Additionally, taking a loan in a foreign currency you expect to appreciate can serve as a hedging strategy, particularly if you have future revenue streams in that currency. For example, if you anticipate receiving payments in USD for exports, taking a loan in USD could align your debt obligations with your expected revenue. However, this approach requires careful consideration of interest rate differentials and potential currency movements.
Consolidate Your Cross-Border Transactions
Consolidating your cross-border transactions can further streamline your FX management. Keeping track of the rates and fees charged by different providers can become confusing and inefficient, potentially leading to higher costs for cross-border payments and conversions. By finding a single provider who can handle your FX and payment needs, you can eliminate many operational inefficiencies and reduce administrative costs. Look for providers with a strong track record in managing international payments and multiple licenses across different markets, as they can offer better rates and more reliable service.
By implementing these measures, you can effectively mitigate FX risk and navigate the complexities of doing business in Vietnam, ensuring that your operations remain profitable and sustainable.
🔑 Read More: Wallex Industry Insights: Japan
Wallex: Your Cross-Border Payments Specialist
As you consider the exciting opportunities in Vietnam and navigate the associated FX risks, look no further than Wallex – Asia’s leading FX and payments specialist. With our expertise, we have helped over 35,000 customers enjoy better speed, support, and savings on their cross-border transactions, all while offering competitive, near mid-market FX rates and zero hidden fees.
With Wallex, the more you trade FX, the more you save. Your dedicated Account Manager will work closely with you to customise FX rates that meet the unique needs of your business, ensuring you never spend more than necessary. Our customer support has consistently received 5-star ratings, reflecting our commitment to your success.
Experience seamless transactions as you make same-day payments to suppliers, manage payroll for employees, and collect payments from customers effortlessly. In addition to converting your MYR to popular currencies like SGD, USD, or JPY, you can also convert other top Asian and global currencies such as EUR, GBP, IDR, THB, PHP, and more.
Speak to us today and bring your business into new markets with confidence!
HMNS Boosts Savings and Operational Efficiency with Wallex
The Background
HMNS (pronounced “humans”) is a perfumery brand founded in 2019, primarily engaged in the manufacturing & retail of local perfumes, distributing them within the region.
To streamline their international transactions, particularly for sending payments to China and Malaysia, HMNS has leveraged the efficient services of Wallex, ensuring smooth and secure transactions that support their expanding business needs.
� Read More: Inside Look: Businesses Who Transformed Their Cross-Border Payments Experience With Wallex
The Challenge
Before switching to Wallex, HMNS faced significant challenges with a local bank, their previous payment provider.
Given that a substantial portion of their business relied on making international transactions, particularly sending payments to China and Malaysia, the continued challenges made it untenable for HMNS to operate efficiently, ultimately impacting their growth and process optimisation efforts.
Complicated processes
The banking processes HMNS had to navigate were cumbersome and time-consuming. Sending money to overseas partners and suppliers involved numerous steps and required extensive documentation, leading to inefficiencies and delays.
This complexity hindered HMNS’s ability to operate smoothly and respond swiftly to business needs.
Transaction delays
Slow transfer speeds were a persistent issue, with funds often getting "hung in the air" during each transaction, and take an extended time to reach the beneficiary. This delay, sometimes lasting up to three days, disrupted HMNS’s operational flow and caused significant frustration.
The unpredictability of when funds would land in the beneficiary's account created additional challenges in managing cash flow and meeting payment deadlines.
� Read More: La Cosecha Maintains A Healthy Cash Flow With Wallex
Lack of transparency
The bank's lack of accountability and transparency compounded these issues. HMNS frequently encountered situations where there was no clear explanation for transaction delays or problems.
The absence of straightforward communication and clarity from the bank left HMNS in the dark, unable to understand or resolve issues promptly, further exacerbating operational inefficiencies.
The #SwitchtoWallex
These challenges underscored the need for HMNS to source for a more convenient and time-efficient solution for the cross-border payment needs. The following includes a glimpse of the considerations behind why HMNS made the strategic decision to switch to Wallex.
Clarity of information
HMNS received clear and detailed information from the outset, including comprehensive insights into Wallex's offerings and the benefits they brought to the business. This transparency assured HMNS that they could effectively streamline their cross-border payment processes with Wallex.
Seamless platform interface
The Wallex platform offered an easy and intuitive transaction process. There were no complicated procedures or commitment fees when signing up, making the overall process straightforward and user-friendly for HMNS.
Highly responsive support team
HMNS experienced unparalleled support at every touchpoint from Wallex's highly responsive team. The level of support provided exceeded that of any other competitor HMNS had considered, giving them the peace of mind that switching to Wallex would ensure they were well supported.
� Read More: PT Intralab Ekatama Maximises Savings and Enhances Productivity with Wallex
The Result
Savings of up to 80% in transfer fees
Switching to Wallex resulted in savings of up to 80% in transfer fees for HMNS.
What was once IDR 400,000 per transaction became just IDR 80,000, dramatically reducing their expenses and significantly impacting their overall business cost savings.
International transactions settled within 24 hours
With Wallex, international transactions are settled within 24 hours, eliminating the need to wait more than a day for payments to process.
This efficiency in payment processing ensures that HMNS can maintain smooth and timely operations.
Highly competitive FX rates
Wallex provided HMNS with a competitive edge through favourable exchange rates, especially for MYR and USD.
These highly competitive FX rates contributed to substantial savings, enhancing the cost-effectiveness of their international transactions.
Hassle-free transaction experience
Here is a customer testimonial from Mrs Dina, Finance Accounting Manager of HMNS:
“Making a transaction on the Wallex platform is easy. We have never faced any issue when making our transactions.”
Experience the Wallex Difference
Wallex is recognised as a leading and secure payments solution tailored for businesses across industries. Trusted by companies of all sizes, Wallex facilitates seamless international payments in 46 currencies, spanning over 180 countries.
Our platform empowers customers to efficiently plan, manage, and hedge their FX needs, all through a secure interface, ensuring peace of mind during each cross-border transaction.
Embracing a forward-thinking approach, top-tier companies such as Investree, Style Theory, CodaPay, Ismaya Group, Marugame Udon, and 40,000+ customers in Asia have made the switch to Wallex, collectively trusting us with over SGD $10 billion in customer funds to transfer across borders.
To explore how Wallex can elevate your business's cross-border payment experience, speak to us today!
How Could De-dollarisation Disrupt the Global Economy?
While it has yet to happen on a significant level, there are murmurs of de-dollarisation among nations who want to reduce their reliance on the US dollar. If such a movement were to gain momentum it could have significant implications for the global economic situation.
In this article, we will take a look at what some of these implications may be, how it affects other currencies, the way nations and businesses transact, and more.
Key Takeaways:
- De-dollarisation is the process of a country reducing its reliance on the USD in international transactions
- Such strategies may be motivated by concerns over the United States’ fiscal policies, economic performance, and geopolitical hostilities
- De-dollarisation could trigger market instability and shift the dynamics of cross-border trade
Understanding de-dollarisation
De-dollarisation refers to the process in which countries reduce their dependence on the US dollar and diversify their currency reserves. This movement has already gained some traction in recent years, with several countries taking steps to shift away from the USD in their economic dealings.
However, the US dollar has been the world’s reserve currency for over 70 years. Why would a country want to take the potentially risky decision to move away what is traditionally considered to the a safe haven?
Let's look at some key reasons.
1. Fears over stability
As it stands, the USD is the dominant currency in the world, and was used in nearly 80% of global trade between 1999 and 2019. This gives the US a huge amount of power when it comes to setting interest rates, trade policies and other economic factors. But this, alongside concerns over inflation and the United States' budget deficit, may create large fluctuations in its value, which can be concerning for countries who hold significant amounts of USD.
2. Geopolitical tensionand hostilities
Among other tensions, the United States and its partners such as the EU are often at loggerheads with countries such as China, Iran and Russia, which typically result in trade sanctions being levied. Countries on the receiving end of these sanctions would have reduced access global markets, causing economic disruption.
3. Rising economic competition
Being the second largest economy in the world has made the Chinese yuan one of the biggest threats to the USD, and the country is also actively leading heading efforts to accelerate the movement, particularly alongside its peers in the BRICS (Brazil, Russia, India, China South Africa) nations, who account for 26% of the global economy. Increasingly, more countries such as Saudi Arabia, Iran, and Indonesia are also looking to join the bloc.
4. Cryptocurrencies
Another factor catalysing de-dollarisation is the emergence of cryptocurrencies, which many feel may potentially be an alternative to fiat. Some, like Bitcoin, are fully decentralised and insulated from interference by institutions like central banks, making them an attractive alternative. Already, countries like Venezuela have fully embraced Bitcoin in their bid to de-dollarise, and Honduras has set up a special economic zone where Bitcoin is accepted as legal tender.
Potential impacts of de-dollarisation on the global economy
No one can say for certain what can happen in a world where the USD is not the de facto currency because there are many variables to consider, such as the extent of de-dollarisation, and which currencies emerge to take its place, if any.
In the hypothethical event that the US dollar is ever dethroned, there is little doubt that global financial markets will be thrust into turmoil, with the scenarios below being potential outcomes.
Reshape hierarchy between currencies
De-dollarisation could fundamentally alter the balance of power among different currencies in the global financial system. Should nations ever actively distance themselves from the USD, currencies from some of the largest economies or blocs could gain greater prominence in international transactions, particularly those of major economies such as the euro, yen, and yuan.
- Euro: The euro could become the primary currency for trade within the European Union and could also gain greater acceptance for international transactions.
- Yen: The yen may benefit from Japan's position as a major creditor nation and its role as a hub for financial markets in Asia.
- Yuan: The yuan could become a more widely used currency for international transactions, particularly in Asia, as China seeks to strengthen its economic and financial influence.
Currently, the USD, the euro, the yen, the pound sterling, and the Swiss franc are the primary reserve currencies, with the USD making up nearly 60% of total global foreign exchange reserves. If the de-dollarisation movement ever gains pace, other currencies may take its spot. For instance, China's yuan has become increasingly popular in international payments and could emerge as a viable substitute.
The transition to alternative reserve currencies could lead to changes in the structure of the international monetary system. Multilateral efforts might arise to create mechanisms for stabilising and coordinating different reserve currencies. These efforts could involve the International Monetary Fund (IMF) and other international organisations coming together to ensure the stability and liquidity of the global financial system in the absence of a single dominant currency.
🔑Read more: Foreign Exchange (Forex) Rates: How Do They Actually Work?
Introduce market volatility and instability
Exchange rate fluctuations between the USD and other currencies could trigger significant movements in currency markets, impacting international trade competitiveness, cross-border investments, and even triggering speculative trading. Such exchange rate volatility can create uncertainty for businesses and investors, affecting their risk management strategies and decision-making processes.
Capital flows would almost certainly be affected as investors reassess their portfolios in response to changing currency dynamics.
Financial institutions and governments are likely to respond by developing new risk management frameworks. Hedging mechanisms such as currency swaps, options, and forward contracts, might become more prominent, and new financial instruments may even emerge.
Shift dynamics of cross-border trade
Almost immediately, there would be newfound complexities over the way nations approach existing trade agreements and frameworks. Without a standard underlying currency, they would have to renegotiate, redraw, or even reconsider these contracts, which could hurt employment, agricultural output, manufacturing and more on both sides of the equation.
Businesses might also have to prepare themselves for higher transaction costs because now, they would need to convert currencies more often and navigate more complex payment systems. The use of multiple currencies and settlement systems could also make international transactions more complex and less efficient.
Complications are likely to arise in the commodities market where oil, gold, grain, and others are usually quoted in USD. The shift to another currency may make trading difficult, with other consequences that range from trade imbalances to supply chain shortages and even food security concerns.
One bright spot that de-dollarisation shines on trade is that it could potentially open up new markets and opportunities for countries that have never been heavily reliant on the USD. Gaining new access to diverse currency markets could promote economic growth and diversification for these countries and pave the way for stronger financial inclusion worldwide.
Accelerate adoption of cryptocurrencies
In a world where the dollar is no longer king, there is a possibility that digital currencies will play an important role in international transactions. One of the primary advantages of cryptocurrencies like Bitcoin is its decentralised nature, making it less susceptible to government or central bank interference.
Bitcoin has already emerged as a potential alternative to traditional fiat currencies in international transactions. In recent years, many cryptocurrency exchanges have begun offering services to facilitate cross-border payments, allowing users to send and receive funds in various digital currencies, making it a viable option for those seeking to reduce their reliance on traditional banking systems and fiat currencies.
Moreover, cryptocurrencies may also provide a solution to the challenges posed by fluctuating exchange rates and the costs associated with currency conversion. As digital currencies become more widely accepted, they could help to streamline international transactions and reduce overhead costs for businesses.
Drive up debt that has been issued in dollars
Nations and companies that have issued dollar-denominated debt might face challenges as the value of their domestic currency may depreciate relative to the dollar, drastically increasing the cost of servicing the debt.
For emerging market economies, the risk and costs involved will be more severe as a further weakening of their currency against the USD could lead to budgetary pressures, economic instability, and potential sovereign default risks.
Investors are likely to reassess their appetite for dollar-denominated debt from countries undergoing de-dollarisation as well. Faced with higher currency risk, investors will demand higher yields as compensation, making it more expensive for these countries to access international capital markets. This could limit their ability to raise funds for development and investment projects.
Could de-dollarisation really happen?
One thing to note is that the scenarios listed above are just possibilities, which means it is unlikely to happen in the near future. While there have been efforts by countries like China and Russia to promote the use of their own currencies, the USD still accounts for the majority of cross-border payments.
The pace of de-dollarisation efforts is also uncertain, with some countries and regions moving faster than others. The success of these efforts will depend on a variety of factors, including political stability, economic growth, and technological advancements.
While there may be growing interest in diversifying currency reserves, concerns about the viability and readiness of alternative currencies persist. The complexities and uncertainties surrounding alternative currencies, combined with the intricate web of global financial relationships, indicate that a complete de-dollarisation in the near future is highly improbable.
Hedge against currency volatility with Wallex
Fluctuations in currency values are a given, and the best way to hedge your risk is to diversify your currency holdings. Wallex lets you do just that with its Multi-Currency Account, allowing you to hold 13 top global and Asian currencies including the GBP, EUR, SGD, CHF, and JPY.
The Multi-Currency Account also makes it possible for you to hold currencies for as long as you want, so you can easily manage your currencies and time your conversions to when rates are favourable.
Wallex, however, does more than help you hedge against currency volatility. Our platform takes away the complexities and costs that businesses face when moving money across borders. Payments are faster and easier with Local transfers, collections can be made in 36 different currencies, and you can enjoy round-the-clock support from a dedicated Account Manager should you encounter any issue.
Learn more about Wallex here or get in touch today!
Navigating Global Markets: How Local Currency Accounts Benefit Hong Kong Businesses
Hong Kong businesses venturing into international markets often face challenges when it comes to receiving payments from overseas. Traditional international bank transfers can be slow, complex, and costly, negatively impacting the amount received due to multiple transfer fees and unfavourable exchange rates. This situation can lead to financial losses or missed opportunities for growth.
For small and medium-sized enterprises (SMEs) in Hong Kong, opening a local currency account can streamline international transactions and maximise the value extracted from payment receipts.
Challenges of International Wire Transfers
Before delving into the benefits of a local currency account, it’s essential to understand how cumbersome the process can be when receiving payments from an overseas customer, such as one in the USA, via international wire transfers.
Imagine you are a manufacturer based in Hong Kong, supplying electronic components to a mobile device manufacturer in Detroit, Michigan.
Each time you dispatch a shipment, you issue an invoice, and the client pays you through an international bank transfer from their bank in Detroit to your bank in Hong Kong. This process typically takes 3-5 days. Moreover, the amount you ultimately receive is often significantly lower than what was invoiced, creating challenges in reconciling accounts receivable. Questions arise: which invoice corresponds to this payment, and where is the remainder of your funds? This discrepancy complicates financial reconciliation and tracking of accounts receivable.
Globally, domestic wire transfers are generally quicker and less expensive because they utilise a single payment system managed by the central bank of that country. In contrast, an international bank wire transfer, such as one from the USA to Hong Kong, involves multiple entities, including banks and wire processing systems in both nations, which complicates and prolongs the transaction.
🔑 Read More: How To Make HKD To RMB Payments From Hong Kong
Here’s a brief table comparing the fees* imposed by US banks for one-time international wire transfers:
Typically, the sending bank deducts fees from your customer's payment. Your Hong Kong bank then applies its own charges. If intermediary banks are involved, they too add their fees to the transaction.
International wire transfers incur additional costs. While banks use mid-market or interbank rates for currency trading among themselves, they apply a higher 'markup' percentage when converting money for consumers. Even if your Hong Kong bank doesn't convert the money, the US bank will, charging its own markup. These combined fees and markups can amount to a substantial sum, which is deducted from the payment you ultimately receive from your customer in Detroit.
The outcome?
Your customer may send USD 50,000, but the amount that reaches you is significantly reduced.
Local Currency Account: A cheaper, convenient alternative to international bank transfers
A local currency account allows Hong Kong SMEs to open an account in their customer's country, such as the USA, to hold funds in USD.
This option offers several advantages for your business:
Currency Flexibility: Your customers can pay in their local currency (USD), which you can hold indefinitely without immediate conversion to HKD.
Exchange Rate Management: You gain the ability to 'hedge' against currency fluctuations. Transfer funds to your Hong Kong account only when necessary or when exchange rates are favorable.
Reduced FX Costs: By maintaining a local currency account, you minimise the need for frequent currency conversions. This eliminates the small losses incurred with each international bank transfer, which can accumulate significantly over time, especially with long-term customer relationships.
Full Payment Receipt: With providers like Wallex, the full amount paid by your customer is credited to your account without fees, FX charges, or minimum balance requirements. Near mid-market rates for FX conversions and disbursements maximise the value of your international receipts.
Faster Transactions: Since your customer pays into a local account in their country, payments clear more quickly. Funds typically appear in your account on the same business day (excluding holidays), reducing stress and eliminating the need to track payment progress.
Customer Convenience: Your customers benefit from settling invoices in their local currency, avoiding charges associated with cross-currency payments to a Hong Kong bank account. This enhances your competitiveness and improves customer satisfaction.
By leveraging a local currency account, you can streamline your international transactions, optimise currency management, and potentially increase your profitability in global markets.
🔑 Read More: What Free Trade Agreements Can Hong Kong Businesses Capitalise On?
How does a Wallex local currency account work?
Hong Kong businesses often encounter difficulties when trying to open local currency accounts in foreign countries due to unfamiliarity with local financial regulations and the lack of necessary documentation.
Wallex streamlines this process by opening a local currency account in the US on your behalf, at no cost. You can set up an account online in just seconds, without any hassle.
Here’s how it works:
Account Setup: Wallex establishes a local currency account in the USA. You only need to provide identification and verify your account.
Invoice and Payment: When you send an invoice to your customer, provide them with your account number. They can then pay the amount owed in their local currency (USD).
Funds Availability: The payment is credited to your account in full, typically on the same day or within 24 hours.
Currency Holding: You can keep the funds in this account until you need them or until the exchange rate becomes favorable.
International Payments: You can use these funds to pay foreign suppliers, for example, in Indonesia. The amount in your local currency account (USD) is converted to IDR, and the funds (after deducting FX conversion charges) are sent to your supplier's account.
The only time you incur an FX conversion cost is when you withdraw money from your U.S. local currency account to pay another foreign entity. This conversion happens directly from USD to IDR (once), rather than going through HKD, which would require two conversions. This represents a significant advantage over traditional international bank transfers, where multiple FX conversions occur whenever money crosses borders, both at the sending and receiving ends.
By using a Wallex local currency account, Hong Kong businesses can efficiently manage their international transactions, minimize costs, and enhance their financial flexibility.
🔑 Read More: PSA: An Enhanced Onboarding & Sign-In Experience for Wallex HK
Unlocking Global Opportunities: The Benefits of a Wallex Local Currency Account
With a Wallex local currency virtual account, you can receive payments using bank details from the US, Hong Kong, or Indonesia, effectively operating as if you have a local bank account. This allows you to accept bank transfers as if they were local payments (USD/HKD/IDR) through the local clearing system, giving you enhanced control over disbursements and faster reconciliations as you expand into global markets that require US, Singapore, or Indonesian bank accounts for payments.
Importantly, this low-friction, cost-effective method enables you to avoid unfavorable exchange rates and decide when to withdraw your funds. Wallex collaborates closely with financial regulators and adheres to the highest security standards to safeguard your data, organisation, and finances.
Your customers also benefit from this setup, as it allows them to pay in their preferred currency and using their local transfer methods, eliminating international transaction fees.
Customers in Hong Kong can hold various currencies, including USD, EUR, GBP, and more, enhancing their flexibility in international transactions.
Sign up with a local currency account from Wallex for free. Get started here.
Are you ready to do business beyond Hong Kong? Speak to us today!
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