Imagine you're a coffee producer in Colombia, selling your premium coffee to customers in the U.S., Canada, Europe, and Asia. The business is growing well, but being able to service customers across so many regions presents its own challenges:

• You're getting paid in multiple currencies and need to settle them in Colombian Pesos so that you can deposit funds to your bank account.
• You need fast, reliable transactions to keep up with your customers’ demand, so that you can order new inventory and expand.
• Meanwhile, you need to stay compliant with international regulations and sales tax. (Ugh)

How do you manage it?

Traditionally, it's been difficult to scale international e-commerce businesses without relying on marketplace providers like Amazon, Shopify, or Mercado Libre, which abstract away a lot of the payment complexity and compliance requirements, but take a heavy fee in exchange (Amazon's referral fees can get up to 96% per item).

More and more fast-growing international businesses are turning to Non-Resident Global Accounts to let them grow their businesses and accept payments internationally.

What Are Non-Resident Global Accounts?

Non-resident accounts have been around since the early 20th century, when international trade began to expand rapidly.

Initially, they were mainly used by large corporations and wealthy individuals looking to diversify their assets. But as globalization accelerated, the need for these accounts grew, and financial institutions started offering more options to meet demand.

So, why aren't more businesses using these accounts today?

The regulatory environment is a major factor. Banks must adhere to strict anti-money laundering (AML) and know your customer (KYC) regulations, which differ from country to country. While these regulations are crucial for preventing illegal activities, they also make it challenging for businesses to open and maintain non-resident accounts. Users of business-focused neobank Mercury dealt with this recently, when the bank had to offboard accounts from 15 different countries considered 'high risk' for KYC.

Additionally, traditional banks have historically focused on their domestic customers, leaving non-resident accounts under-prioritized. This has contributed to the misconception that these accounts are only for large corporations or wealthy individuals.

On top of that, it's simply difficult for international businesses to juggle relationships with multiple banks across various countries while ensuring compliance with all the regulations.

The Growth Challenges Without Non-Resident Global Accounts

For businesses—especially startups and small to medium-sized enterprises (SMEs)—the absence of non-resident global accounts can be a significant hurdle. Without these accounts, companies struggle to access foreign markets efficiently, often facing higher costs including higher currency conversion fees, slower transaction times, and missed growth opportunities.

So, how do high-growth businesses manage their international banking needs without setting up a physical presence in multiple countries?

How to Access Non-Resident Global Accounts

As cross-border transactions become increasingly common for marketplaces, platforms, e-commerce businesses, and SMBs, many are discovering the benefits of Non-Resident Global Accounts through companies like our partner Routefusion.

Routefusion helps businesses tap into international markets by partnering with Tier 1 banks such as J.P. Morgan, Citi, Wells Fargo, and Deutsche Bank.

This gives customers access to SWIFT and local payment rails in 12 key locations, including the U.S., Canada, Mexico, the U.K., the E.U., Australia, New Zealand, Singapore, Hong Kong, China, Japan, and Poland.

Having an international account is the most important part of the solution for merchants to enable cross-border commerce, but for a smooth and compliant payment experience, there are a few other important pieces:

• Real-time global payments: Enabling both customers and vendors to send and receive money in their local currencies, without having to manage conversion on their end. In countries such a Brazil (PIX) or India (UPI), local payments can run over real-time rails, allowing merchants to settle more quickly without taking payment decline risk.
• Virtual accounts: Merchants can more easily manage payables and receivables by creating multiple sub-accounts, which can be assigned to different vendors and customers, in order to speed up reconciliation. Custom routing information for virtual accounts prevents funds from getting co-mingled, and limits the amount that (eg) any one supplier can draw down.

💡 As a favor for those TWIF subscribers who are interested in opening up a Non-Resident Global Account, Routefusion has offered (1) to waive all implementation fees and (2) to process applications within 24 hours, with a 90% approval rate. Founders can get started by applying here.