Traditional exchange houses have been around for quite some time. They were the go-to solution for individuals and businesses that needed to convert currencies or send and receive money across borders. However, with the rise of financial technology, global accounts are rapidly gaining popularity as a swifter, cheaper, and more efficient alternative.

This article explores the differences, benefits, and drawbacks of each option to help you decide which is better for your needs.

Also read: How to switch from traditional banking to Grey for remote work payments

What are traditional exchange houses?

Exchange houses are financial service providers that specialise in currency conversion and money transfer services. They are common in many countries and are often used by digital nomads, freelancers, and expats to send and receive money.

Key features

• Operate through physical branches or agents.
• Allow you to send cash, which can be collected by recipients in cash.
• Often require in-person verification and paperwork.
• Heavily regulated to ensure compliance with anti-money laundering rules.

Pros

• Wide physical reach: Useful in countries where banking access is limited.
• Cash-friendly: Ideal for recipients without a bank account.
• Familiarity: Many people trust these services because they have used them for decades.

Cons

• Higher costs: Fees and exchange rate mark-ups are often steep.
• Slower transactions: Transfers may take hours or days to complete.
• Inconvenience: Requires visits to physical branches or agents.
• Limited flexibility: Funds are typically disbursed in local currency rather than foreign currency.

What are global accounts?

Global accounts, often referred to as multi-currency or borderless accounts, are modern financial tools provided primarily by fintechs. These accounts allow users to hold, send, and receive money in multiple currencies without the need for constant conversions or using separate bank accounts in different countries. They are designed for the remote workers working with international clients, digital nomads on globetrotting adventures, and business that operates internationally.

Key features

• Fully digital and accessible via mobile apps or web platforms.
• Provide local bank details in foreign currencies (e.g., USD, GBP, EUR).
• Enable currency exchange at competitive rates.
• Support both individuals (freelancers, digital nomads, expats) and businesses.

Pros

• Low fees: Often cheaper than exchange houses due to reduced overheads.
• Speed: Transfers can be instant or same-day.
• Flexibility: Hold money in different currencies without forced conversions.
• Convenience: No need to visit a physical branch; everything is online.
• Integration: Works well with global payment platforms, marketplaces, and clients.

Cons

• Digital dependency: Requires internet access and digital literacy.
• Geographic limitations: Not all services are available worldwide.
• Regulatory risks: As a relatively new model, fintech companies may face stricter local regulations.

Also read: A complete guide to budgeting as a remote worker

Global accounts vs traditional exchange houses: which is better?

The answer depends on your financial needs and the environment in which you operate.

• Choose traditional exchange houses if you or your recipient relies on cash, has no bank account, or lives in a country where digital services are underdeveloped. They remain a reliable option for remittances in cash-dependent communities.
• Choose global accounts if you work internationally, freelance for foreign clients, run a global business, or want to manage multiple currencies efficiently. They offer more help in terms of speed, affordability, and convenience.

Cross-border payments with Grey

While exchange houses still play a crucial role, people are increasingly moving towards digital payment solutions. Global accounts offer speed, transparency, and low costs.

Grey offers reliable cross-border payments with multicurrency accounts that support transactions in USD, GBP, and EUR, along with affordable transaction charges and a competitive exchange rate. Grey offers an instant virtual USD debit card that integrates seamlessly with payment gateways.

Sign up on Grey today for seamless cross-border payments.

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