USD account suspended? Here’s what might have happened and emergency alternatives

Recently, users of a cross-border money transfer platform have come to a realisation that their USD accounts have been deactivated. This has led to disruptions in conducting USD transfers and fund collection in a timely manner. Airwallex is here to offer insights and practical tips on navigating USD remittances, ensuring you are well-prepared for any unforeseen challenges. 

How does local USD transfer work?

This article will focus on elucidating the workings of online cross-border remittance platforms, assuming familiarity with the conventional SWIFT wire transfer method employed by traditional banks for USD remittances.

In essence, cross-border money transfer platforms utilise financial technology to seamlessly link the accounts of various global banks and financial institutions. This network empowers platform users to execute cross-border remittances in different currencies. Simply put, possessing an account on an online cross-border platform is akin to holding local accounts in multiple countries - conducting cross-border remittances are as easy as making local transfers.

However, this approach has its own risks. For instance, the recent deactivation of USD accounts on a third-party platform may stem from issues in the platform's collaboration with a US bank or financial institution partner, leading to a disruption in the connection. Consequently, the affected users lose the ability to utilize the online platform account for conducting and receiving USD remittances.

Alternatives to USD transfer services

For cross-border merchants, the disruption in transferring and collecting USD locally is no doubt an operational disaster. Airwallex understands the gravity of the issue, and presents the following solutions for affected users, with a detailed analysis on the time requirement, USD transfer speed, and related service charges. 

Traditional Banks

Traditional banks conduct wire transfers through SWIFT. It normally takes 1-5 working days with service charges ranging from HK$100 to HK$300. On top of that, you may also need to pay for the agency bank charges, remittance translation fee, and receiving bank charges. 

Verdict: If you already hold a business account in a traditional bank, it may be helpful to give your suppliers and business partners a confidence boost by making USD transfers through a bank. The obvious downside is that it requires more time and money. Coupling with the expensive USD exchange rate, the impact on operational costs is paramount. 

Unless your business partners are using the same bank as you do, enabling free interbank cross-border transfers, this is not an ideal solution in the long run.  

Online transfer platforms 

The usage threshold of online transfer platforms such as PayPal and Payoneer is relatively lower. PayPal only requires a simple email registration and the account will be ready for USD transfer once the user connects it with a bank account. Worth noting that, however, the receiver also needs to have a PayPal account in order to receive the funds. As for Payoneer, users can usually open an account in 3 working days. 

Under normal circumstances, PayPal and Payoneer can both complete the transaction within the same day. Service charges are calculated based on the amount of remittance, as the platforms charge by percentage. Moreover, users will need to pay for foreign exchange fees separately. 

*Information as of 14 November 2023. Please refer to the respective official websites for details. 

Airwallex

By combining the efficiency of FinTech and the scalability of traditional banks, Airwallex offers an innovative way of fast and safe cross-border transfers. 

It takes as fast as 1 working day to open a Global Business Account with Airwallex. Apart from same-day USD transfer, users can enjoy HK$0 service charges to satisfy their every remittance need. When necessary, users can exchange currencies by paying as low as 0.2% above the interbank exchange rate to transfer USD in a fast and cost-effective way. 

Important factors to consider when choosing a USD transfer platform 

While it’s essential to pay attention to the competitive advantages and characteristics of respective platforms, merchants are also advised to consider the following 3 factors: 

1. Available countries/regions 

Merchants must make sure the chosen platform covers all operating markets and currencies of their business. If you intend to expand into Southeast Asian markets, such as Myanmar and Cambodia where USD is a common trading currency, you will want to choose a platform that provides local support in those markets to avoid operational complications.

2. Banking partners

At the beginning of this article, we have established that the smooth operation of cross-border money transfer platforms relies on a vast and reliable network of banks and financial institutions. When choosing such platforms, keep an eye on the list of banking partners, especially those in your major markets, to ensure operational stability.

3. Security and compliance

All cross-border transfer platforms must hold a valid license to legally offer USD transfer services. To safeguard your funds and transaction data, pay attention to the privacy policy of the platform, and whether the fintech infrastructure meets the international security standards. 

The benefits of conducting USD transfers through Airwallex 

• Global network of banking partners: Airwallex works with over 60 banks and financial institutions around the globe to offer a comprehensive set of services, while effectively diversifying risks.

• Market-beating exchange rates: take advantage of the more competitive interbank exchange rate to perform currency exchange whenever necessary. This helps alleviate the impact of currency fluctuations while maintaining control of your operational costs.

• Low-cost USD transfer: Airwallex does not charge account opening fees, monthly service charges, or remittance fees. Only when you exchange USD, will you be charged as low as 0.2% above the interbank exchange rate.

• One-stop cash flow management: the Global Business Multi-Currency Account is more than just an account for transferring and receiving USD. Be it large volume transfer, payroll management, operational budget control, or creating employee cards, you can use Airwallex to streamline all your financial management needs. 

FAQ

My account has been suspended by a third-party service provider, what should I do?

If you no longer have access to the USD account details provided by a third-party service provider, and subsequently cannot receive USD through this account, your business operation will undoubtedly be affected. 

Rest assured, you can simply follow the steps below to quickly resolve the urgent situation:

1. Open an Airwallex account: when a problem arises, consider opening an account through Airwallex directly. The process of opening a USD account in Hong Kong is fast and easy. It usually only takes 1-2 working days for users to start receiving funds, avoiding any unnecessary delays.

2. Transfer your funds to Airwallex: if your original third-party service provider has not yet imposed any account restrictions, transfer your USD to Airwallex as soon as possible to ensure full control over your funds.

3. Notify your customers; Once you have successfully opened an Airwallex account, be sure to notify your clients with the latest payment information and procedures to avoid operational complications, such as having to locate a specific transaction, arrange refunds, and more.