Banking Beyond Borders : Multi-Currency Business Accounts in Hong Kong

Hong Kong banks are cautious to small business owners and startups opening business accounts, so the young entrepreneurs are eager to find the alternative to the bank account. 

Currently, Statrys, Neat and Currenxie, the emerging Hong Kong technology platforms, come up with a solution: a combination of stored-value facility and segregated bank account to offer multi-currency bank-to-bank transfer and cash collection. For simplicity, we name this type of account as Multi-currency Business Account (MBA).

For startups, the MBA is an alternative to banking service because it enables bank-to-bank transaction without the hassle of bank account opening. But, can it be the replacement of conventional bank account? Let’s find out.

Visiting Hong Kong

Short answer: If you cannot visit Hong Kong, the traditional business bank account is not yours.

Volumes of Business

“How much is your (expected) business turnover?” 

The MBA is a stored-value facility in nature, so it is under regulatory by the laws. Notably, it comes with a set of maximum limit on account usage, especially the ceiling of the account balance.

Once you reach your account balance limit, you can’t receive money, until you withdraw money from it or you apply to raise the account balance limit.

There is a set of the default limit to every account. Right now, the account balance limit starts from HK$ 2 million and caps at HK$ 5 million upon approval.

This limit is adequate for the operation of most of the small business. Still, if your business cannot fit into it, a traditional bank account is your choice.

Number of Outbound Bank Transfers

“How many times does my business send money to other bank accounts monthly?”

The MBA provider charges you when you send money to other bank accounts. On top of this handling fee, you also have to bear all the inter-bank remittance charges incurred by the sending banks, receiving banks and the intermediary banks.

At the moment, the MBA providers ask for HK$30 as their handling fee of each remittance locally; HK$90 per outgoing international payment. If you often pay to various parties via bank transfer on business routine, you have to take the extra cost of handling fee into account.

Cash Deposit

“Are you doing a cash business?”

If you are managing a cash business, you are accepting coins and banknotes payments daily. Consequently, you need to deposit a large amount of cash into your bank account.

The MBA has a daily cash deposit limit of HK$3,000. Nevertheless, it takes a longer delay than the banks, and it requires you to access their less widespread ATMs. 

So, a conventional bank account suits your cash business better because their branches are convenient to access 

Payment Cheque

“Do you need to issues payment cheques regularly?”

The MBA account does not support cheque issuance.

Your MBA is a segregated bank account in nature, so it supports payment cheque receiving. Please note that the beneficiary name of the MBA must start with a string of letters followed by the company name. Otherwise, the cheque will be rejected by the bank which is offering the segregated bank account.

Value-added Services

“Do you need business financing tools?”

The providers of MBA do not offer additional financing products. It is nice because you get the essential function and feature of money transfer.

On the contrary, conventional banks are versatile: they can sell loans, investment and insurance to their clients. Opening an account in a traditional bank can begin your business relationship with the bank so that it can lead your business to full-fledged banking services.

When your business has grown to a scale, you’d better seek financial support from the banks for further development. It is time to open your business bank account.

But before you reach this stage, the MBA is nevertheless an excellent payment solution to kick start your business and grow.

Confidence / Corporate Image

“How do your business partners think of your company?”

Owning a business bank account in a prestige bank is a boost of your corporate image to your suppliers and customers. It is evident since those big-name banks have branches in central business districts; their adverts are visible on mass media daily. These give a sense of security and confidence to co-operate.

If you are carrying on business in a traditional industry, where your suppliers and customers feel uncomfortable with the emerging MBA, the conventional bank account is your only choice.

If you are carrying on an online business, where the payments take place via the payment gateways (e.g. PayPal), the MBA is your rescure because it can connect to these payment gateways seamlessly. Moreover, your customers and suppliers are usually less aware of your MBA, which is the underlying bank account.

Multi-Currency / Source of Fund

“Where do I send money to?” and “Where do I collect payment from?”

Similar to incumbent banks, the MBA has restrictions on sources and destinations of the fund during bank transfer. Make sure you know where your money goes and comes before you need to open an account in either the traditional banks or the emerging MBA platforms.

Conclusion

The MBA is not a replacement for bank accounts. It is because Statrys, Neat and Currenxie, the provider of the MBA, is not banks which are incumbent and versatile. Its position as an alternative to a business bank account reflects the fact.

The advantages of MBA are its online application, ease of opening, and quick approval. These are an instant relief to the pain in startups and small business owners who are suffering from the cautious account opening policy of Hong Kong banks. Even a newly incorporate Hong Kong company can open an account online.

Finally, here is our advice to every startup: Don’t let the hurdle of bank account opening to stop you from starting your business. Open the MBA now, and see the business bank account as an upgrade in the future. To kick start your business, register your Hong Kong limited company and open an MBA now, all are done remotely online. Click here for details.

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