Multi-Currency accounts and Multi-currency IBAN seem to be the rage in the payments world, especially when it comes to large ecommerce players. But what is the difference? The marketing material from most firms doesn't help and blurs the lines between the two when these are actually two very different products.

Here is a quick guide:

Multi-currency accounts

Mutli-currency accounts have been around for a while. You can use them to convert and hold currencies in multiple currency. Generally speaking the way it works is you have an account with say €50,000 sitting in it. You can use the online platform from your bank or e-wallet provider to convert the money into various currencies and hold funds. This ia a great and cheap ay to hold funds in different currencies for your business or private needs most online brokers and fintech startups offer this service such as B2BPay, Transferwise, Revolut, IBANFirst.

The big difference between this and the Multi-currency account si that you need to first have money in the account before you can convert it into different currencies. for example some firms let you first top-up in Eros and USD before converting.

Multi-currency IBAN

Multi-currency IBAN is when you have one IBAN or Bank account that can receive payment from 30-40 different currencies on the one account. the account then automatically puts the incoming currency in the right currency account. Most traditional bank or IBAN accounts can either: 1) receive only one currency, 2) Convert the incoming currency to your accounts currency instantly on arrival. , 3) Or provide an account per currency. For example an Individual IBAN/bank account for EUR, USD, GBP which means you have to manage three accounts and give the right account details to the correct customer.