USD Collections for online marketplaces tackles transfers fees that erode marketplace seller profits

London, 17th November 2020 – Following the launch of USD collections for Amazon in the US, Canada and Mexico earlier this year, financial infrastructure provider Banking Circle is now providing USD collections for sellers across a wider range of online marketplaces.

Available ahead of one of the year’s biggest merchant sales opportunities – the festive season - the extended service gives Payments businesses an additional proposition for their customers. Virtual IBANs can now be used to collect the proceeds of online stores including Amazon, eBay, Shopify, Wish, Walmart, Newegg, Souq (Amazon UAE), Jet, Wayfair, Etsy.

Most marketplaces pay out to sellers in the currency of the country in which the seller’s bank account is based. For example, payments from a US marketplace to a UK-based account will be settled in GBP, regardless of whether the merchant has a USD account. This currency exchange incurs the marketplace’s international transfer fee, typically around 4% of the payment value.

Tackling this drain on merchants’ profits, in June 2020 Banking Circle launched a USD Collection solution for Amazon payments to stores based in the Americas (US, Canada, Mexico). Now the bank is providing further support for marketplace sellers with the launch of USD collections across a larger number of online marketplaces at a crucial time in the annual sales calendar.

Anders la Cour, co-founder and Chief Executive Officer of Banking Circle commented: “In today’s challenging market, small businesses like those selling through online marketplaces need additional support, and the industry must step up to help these businesses prosper. Banking Circle is committed to improving SME financial inclusion, and the launch of USD collections on more marketplaces is a valuable part of this commitment. And the new solution gives Payments businesses an important added value for their clients, helping them provide vital support for SMEs around the world.”

Using Banking Circle Virtual IBAN, Payments businesses’ merchants are allocated US bank details, allowing marketplaces to pay in USD and via their ACH payment corridor (the US version of SEPA and BACS). This allows merchants to sell internationally and take control of the foreign exchange and payment method of their store income.

The addition of USD to Banking Circle Virtual IBAN enhances the service Payments businesses can offer their merchants:

• EU marketplaces – Sellers are provided with a DE IBAN and can receive SEPA credits
• UK marketplaces – Sellers are provided with a Sort Code and account number and can receive BACS, CHAPs and Faster Payment credits
• US marketplaces – Sellers are provided with an ABA number and account number and can receive ACH credits

As a multi-currency, multi-jurisdictional banking solution Banking Circle Virtual IBAN negates the need to have several banking relationships and enables foreign exchange and Payments businesses to give their customers their own virtual IBANs. With full transaction transparency, payments acceptance and screening time are reduced. Banking Circle Virtual IBAN also reduces the likelihood of errors in processing cross border payments. Plus, reconciliation and settlement times are improved, helping FX and Payments businesses improve the customer experience. End-to-end transparency also reduces AML and KYC risk.

About Banking Circle

Banking Circle is a financial infrastructure provider to Payments businesses and Banks. As a fully licensed bank, free of legacy systems, Banking Circle technology enables payments companies and banks of any scale to seize opportunities in the new economy - quickly, at low cost and in line with high standards of compliance and security – with direct access to clearing that bypasses old, bureaucratic and expensive systems.

Banking Circle solutions are increasing financial inclusion. From accounts to international payments to settlements and FX to compliance, Banking Circle technology is helping thousands of businesses transact across borders in a way that was previously not possible.

Banking Circle is owned by EQT VIII and EQT Ventures in partnership with Banking Circle’s founders. Headquartered in Luxembourg, Banking Circle has offices in London, Munich, Amsterdam and Copenhagen.

Find out more about Banking Circle here.