Banks usually charge huge fees. You have to have either a foreign currency account or sometimes a local currency account in which case your bank will first convert the money and charge you, then send to a foreign bank to charge you again, usually with less favourable exchange rate, cause you can't choose in which bank you're gonna change your money as you're stuck with both your bank and a bank abroad. The additional fee you'd pay won't probably be less than 5% but could be much more.
Now, imagine a company in Austria that needs to buy parts for a machine from 5 different suppliers, one in Germany, one in France, one in Spain, one in Netherlands and one in Sweden. It has to convert its own currency to five different currencies, get everything and then calculate price for different currencies if it wants to sell in other countries. Add to that different stability of various currencies - Austrian schilling was tied to German mark, so not much problems there but Spanish pesetas and Italian liras weren't as stable which leads to issues like do you want to convert them right away to German marks or keep them, because you're gonna buy more parts from Spain and Italy. Is it better to change now and pay a bank fee twice (once for converting to German marks and once again to convert them to lira and pesetas) or keep them as they are in hope that they won't devalue more than you would pay for bank fees?
It's simpler, easier and more straightforward, which especially helps smaller businesses.
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