An online seller today must expand worldwide to be successful, and opening a USA bank account from UK can be a great help with this. The majority of eCommerce merchants have a very low profit margin when selling globally because of the foreign currency exchange and transfer costs. The volatility on the foreign exchange (FX or forex) markets, especially unstable USD and GBP indexes, increase the risks for sellers. Having a USD bank account that will allow you to cut the cost of payment processing and management can make a great difference for your online business. The good news is that today you can set up this type of account easily and even get some extra benefits from it.

Why Having a USA Bank Account from UK Is Essential for Online Sellers Today?

The COVID-19 pandemic impacted the world in many ways, one of which is a massive change in consumer behaviour. On the one hand, this is a fortuitous development for online sellers as the number of people shopping online has increased greatly. Moreover, the majority of them are expected to stick to this new habit even after everything returns to normal.

On the other hand, this increased interest also spurred competition among eCommerce merchants. Nowadays, it’s not enough to simply know your ideal customer in your own country. A seller also must dip into the consumer pool abroad as local purchases are not going to be enough. This is because not only is there more competition, but also the consumer buying rate has gone down. Experts do not believe it will improve significantly as the global economic recession is only getting worse for now. Thus, it might take years for the buying rate to grow significantly.

Online sellers of today don’t have the luxury of waiting. Therefore, they must try to attract more customers from abroad is why having a USD bank account can be extremely beneficial. Note that this will help you not only when selling to Americans as the US Dollar is widely used all over the world.

However, it’s definitely the US market that UK sellers should have a primary focus on. The EU market, while closer, might not be the best choice due to changes in taxes after Brexit. There are also other legal issues with trade agreements that still need to be worked out.

The US market, on the other hand, is extremely welcoming of UK products and services. In fact, according to survey data, three in four US buyers are more likely to buy a “made in Britain” branded product.

How Much Do Currency Transfers Truly Cost You Without a USD Bank Account?

Already UK businesses and sole traders sell more to the US than to the local UK market. The majority of them do it without the help of a US Dollar bank account abroad and it works for them. This isn’t a surprise as making an international transfer to the UK is rather easy. Almost all banks offer this service. There are also easy payment services offered by Amazon and PayPal, which are favoured by online merchants.

However, there is one major reason why opening a US bank account for sellers can be a complete game-changer for your business. That reason is a chance to save a substantial amount of money. This means an increased level of revenue as well as a boon for your unique selling proposition. Your customers are sure to appreciate lower prices, which you will be able to set due to the savings on currency exchange and money transfer costs.

To get some idea of how much you can save, just think that Amazon currency converter costs you about 4% of each transfer. As this is a built-in Amazon payment processing service, many of the fees are hidden. Therefore, you might not even realize how much money you are losing unnecessarily. PayPal’s international transfers will also cost about 3.5% each.

On the other hand, opening a USD bank account with one of the leading currency transfer companies will reduce the cost of transaction to under 1%. Moreover, online money transfer companies today offer multi-currency accounts that allow you to hold a balance in other currencies. This means that you might forego having to convert the USD and directly use it to pay suppliers or freelance workers abroad. This can help you save even more money in the long run.

How to Set Up and Use a US Dollar Bank Account Abroad

It’s very easy to set up a USD bank account for eCommerce collection from the UK. In fact, the majority of leading online money transfer platforms are UK-based. Therefore, you can choose any of the trustworthy providers with the best rates. Today they are:

·       OFX

·       TransferWise

·       SpartanFX

All you need to do in order to start using these services is to register with any (or several) of the companies. This will allow you to have a virtual USA bank account from UK. Your customers will be paying that account, essentially making cheap local transfers within the US. From then, you’ll be able to decide what to do with the account balance.

You can use the USD to make different payments without having to exchange the currency first. Or, you can make a withdrawal to your company’s main UK bank account or in cash. In this case, you will have to exchange US Dollars for Pound Sterling. However, exchange rates offered by currency companies are much better than what your bank will offer. Therefore, you will be able to minimize currency costs anyway.

As online money transfer companies have a rather straightforward registration process, you should be able to open this USA bank account from UK within a few hours. You will need to connect it to your UK bank account. But the two won’t be tied directly to add another layer of security.

More Benefits of Having a USA Bank Account from UK

Opening a USD bank account with one of the top online money transfer companies is not only a good way to save money on the cost of foreign currency exchange. These companies also offer a variety of services that can help your business. But bear in mind that the range of services differs depending on the provider. Therefore, it’s best to study these extras before opening an account.

The most important service for a business is currency hedging. This is a selection of tools that aim to reduce the inherent currency risks. Simply put, they help minimize the impact of shifting foreign currency exchange rates. This can be done by using tools like forward contracts, which secure a specific FX rate for a future trade. Other hedging tools can automate the exchange making it when the rate is most favourable. This will be a good choice for businesses that need to make exchanges frequently.

Moreover, companies that offer this type of services also offer currency guidance. This is essential help for online sellers as it gives you help from experienced professionals for making the best decisions.

However, note that this type of services is only offered by money transfer companies with a corporate desk. For example, while OFX offers a selection of hedging tools and guidance for businesses, TransferWise does not. Keep this in mind when choosing which service to use when you plan to open a US Dollar bank account abroad.