HSBC has launched a virtual account solution for banks, enabling merchants on e-commerce platforms to receive euro and pound sterling payments via local accounts.
This initiative aims to address the problem of high costs for e-marketplace platforms and merchants in certain regions. Previously, they could only access funds in euros and pounds through cross-border payments, which came with extra fees and FX rates.
Additionally, this virtual account allows Chinese businesses trading on e-commerce platforms to receive payments through their local clearing systems and their own bank accounts, eliminating the need to open foreign bank accounts.
The account works by providing each merchant with a dedicated account number, allowing domestic banks to identify and reconcile payments.
Lewis Sun, Global Head of Domestic and Emerging Payments at HSBC, said: “We are delighted to be leading the way in this space and building truly innovative solutions for our clients.
“HSBC is committed to unlocking the potential of our expertise and network for our clients to help them succeed in a digital age – the launch of virtual accounts solutions to banks is an important part of this vision, helping to empower clients in a digital economy.”
In the past, HSBC has faced significant criticism over its exchange fees.
In January, Wise published a report highlighting potential concerns regarding HSBC’s exchange rate fees. The payment infrastructure provider found that HSBC had the highest fees for currency exchanges during its study conducted between December 2023 and January 2024.
Specifically, Wise reported a fee of 3.7% for converting pounds to euros and 3.7% for pounds to US dollars, with some fees reportedly hidden from customers, raising questions about transparency in the bank’s pricing.