A serious IT business is more dependent on bank accounts and cashless payments. In the market or in the store there is always the opportunity to pay in cash. Even ordering goods over the Internet, you can try to use deferred payment in the mail.
However, what if the main product is a web service, subscription, distance consultation, mobile game? Apple is unlikely to send you cash in an envelope, although Google allows you to order an account for cash.
However, this is not very convenient, therefore, a normal IT-business, which intends to develop at an adequate speed, needs an account.
The first thing they do is go to the bank. If we are talking about a local account, for example, in Russia, then there are no special problems. An account will be opened for you, they will give you access to the Internet bank and go.
But as mentioned in other articles earlier, if your market is wider than your native country and you intend to make big money, then you need a foreign account. And here adventures begin: preparation of documents, verification by the compliance
department, additional questions and a few months later denial of service without explanation.
It is possible and even necessary to open an account abroad, but this, to speak politely, is not easy. We help to resolve this issue, but at the same time we offer alternative and much faster ways to get a foreign account.
Why is a payment system needed and what is its strength?
An alternative to foreign bank accounts is foreign payment systems (Payment Service Provider - PSP).
Why in the 21st century they become a replacement for banks? Because they perform the basic functions of banks: they transfer money from one account to another, often faster and cheaper than banks. They allow you to convert currencies, receive payments from customers, pay business expenses, withdraw profits to a bank account.
Payment Service Provider is most often a fintech company. This is the same IT project, like many other areas of IT. His specialization is working with money. In most jurisdictions where financial service providers are registered, they must obtain a special license, such as EMI (Electronic Money Institution).
In some cases, this is regulated by separate legislation and special authorities, and sometimes, as in Lithuania, it is subordinate to the Central Bank.
Having received a license, the payment system is obliged to comply with strict rules that practically equate it to a bank. At the same time, control over them is still slightly lower than for banks.
Thanks to this, opening an account in payment is easier and faster: the procedure for registering and activating an account can take from 1 day.
Moreover, at the moment, payment systems do not exchange information about accounts, as banks are required to do.
The payment processing speed is high: inside the system it can be instant; it will take time to transfer to bank accounts and other systems, but money can still arrive the same day or the next.
Commissions of payment systems may be lower. For example, when transferring euros through SEPA (Single Euro Payments Area), the cost of one transfer is 36 euro cents. PSP can offer and 35 cents, and even 16 cents, depending on the company.
Below about the advantages of payment systems, but the first thing to say about the difference between different systems.
Types of payment systems for IT-business
When it comes to payments, the first thing that comes to mind is such projects as PayPal and WebMoney. A little more savvy know about Payoneer and Paysera.
However, these are far from the only payment systems. Even more - these projects have their limitations and are far from always suitable for large IT companies. Think about how to oblige all customers to pay through WebMoney? But this is a popular system.
You can talk about PayPal for a long time, but despite many advantages and extreme popularity in the USA, this is also not the most convenient platform for business. Have you looked at the business and developer account? They changed the design, but until recently it looked like a dinosaur from the beginning of the 2000s, and many links led to non-existent pages.
Another feature of the popular PSP: they give access to a wide range of customers very easily, and then, also easily, these accounts are blocked. The reason may be a complaint, an incomprehensibly outlined business system, etc. On such a scale, technical support has no resources and no desire to deal with each client. At least until he becomes a major or VIP client.
In addition, these payments are difficult to use as a substitute for an account: the credibility of a company that writes an email address or a single account for thousands of people asking to insert a sub-address in the Payment Purpose field is very reduced.
The lack of professional and serious solutions has spawned a range of new payments that look more like banks than simple fintech projects.
Types of payment systems for serious business
It is rather a conceptual division to understand what levels of service are available today.
- Popular payment systems with a large audience
- Payment systems offering an almost complete range of banking services
- PSP working with risky types of business: offshore company, cryptocurrencies, FOREX, etc.
- Payment platforms tailored for specific types of business
- Platforms that specialize in a specific currency (SEPA, SWIFT)
- Platforms that offer additional service
Sometimes these items are mixed in one PSP.
Another thing that needs to be understood today: not all of these platforms want publicity. The reason is not that they do not want to make money, but because they want to maintain their service, not to attract the attention of scammers and speculators, and then regulators.
That is why many payment systems with which we cooperate are even ready to sue if information about them becomes too accessible.
So there are payment systems that are difficult to get into because of the high requirements for documents, to prove the legality of the origin of funds. In this case, we recommend contacting consultants to ensure the successful preparation of documents in accordance with internal PSP rules.
Advantages of advanced payment systems for IT business
We list the strengths of foreign payment systems that you can use. Here we give a single list, but not all platforms offer these advantages to customers in full. Therefore, it is important to decide what is most important for you and come to specialists with a specific request.
Most bank accounts have an IBAN. This is a unique call sign that provides international payments. Your customers and partners will not even understand that your account is not in a bank, because nothing will change for them: they will send money to an account that has the same number as the bank that operates in the SEPA zone.
It also allows you to connect accounts to various payment gateways, as well as an account in a regular bank. It will be easier for you to accept payments by cards and other methods.
Of course, it can not be compared with the instant sending of money from card to card, but on an international scale, the speeds increase significantly. If your partners work in the same payment, then the transfer can take place instantly and in most cases for free, which of course is also very beneficial.
Almost all payment systems allow you to open an account remotely, without a personal visit. In some cases, you will need to go through an interview, most often through some kind of messenger.
The term for opening an account is on average from 1 to 10 days.
We talked about commissions above, but we repeat: a correctly selected system allows you to save on transactions. When choosing a payment system for your business, you need to clearly understand which option is more profitable for you: the one where there are initially low transfer fees or the one where the fees are slightly higher, but the monthly content of the account is less. You need to weigh all the points from the calculation for at least a year.
The ability to send and receive money in dozens of different currencies. Sometimes we are talking about one multicurrency account, or about individual currency accounts. Also, some systems offer extremely advantageous exchange rates for currencies or do not even take a commission from this.
Good payment systems offer you to receive full-fledged corporate cards of Visa and MasterCard systems. They can be replenished through an account in PSP, withdraw cash from them, and pay for purchases. In some cases, we are talking about thousands of euros or dollars that can be withdrawn from ATMs.
There is a payment system that offers a fixed 1 percent for cash withdrawals in any currency. The base currency of the card does not charge a commission.
In addition, cards in payment systems can serve as an additional layer for protecting personal information. For example, the card may not have a name and your data is not visible to ATMs, shops, and so on.
- Connection of POS-terminals
Some payments offer the installation of POS-terminals at physical points. Most often, this service is limited by the geography of several countries, but such an opportunity does exist.
Payment systems today do not fall under the mandatory exchange of information, like banks. This, of course, does not mean that you need to evade taxes, but additional strength to your privacy will be added.
If you use cards and their anonymous varieties, the protection of personal financial data will go into the real world.
In fact, this item turns payment into a real bank. Only a few platforms offer such a service, but the very fact that this has already happened. After some time, it will become harder for banks to compete with PSP.
Perhaps for this reason, the requirements for payment services will increase. But for now, working with them is easier.
- Work with cryptocurrencies, risky business
A bank refuses a business that it does not understand. The bank is subject to regulation, fears for its license, and it is easier for it to refuse any risky business, even if experienced people are at the head and we are talking about legal transactions.
Payments adhere to the same principles. However, some of them look at the world wider and are ready to work with FOREX, cryptocurrencies, online casinos and much more.
Of course, we will focus on meticulous verification of the client and his money. You will definitely be asked how you are going to build a business and verify users.
Limitations of Payment Systems
PSP has its limitations. Here they are:
- Transfers in one currency
- There are payments that work, for example, only in EUR and use SEPA. If you need dollar transfers, it is important to immediately indicate this when communicating with consultants.
- European resident required
- There are very attractive conditions for payment systems, but they are available only when the company has a resident of the European Economic Area. In this case, you need to either obtain the status in Europe yourself or hire a person who, at least formally, will become part of your company.
- Deposits not insured
- Since payment systems are not banks, they are not subject to deposit insurance conditions.
- There may be minimal deposits and minimum balances
As in banks, some payment systems ask you to make a deposit or to provide an irreplaceable balance on your account. The deposit can be 1-5 thousand euros, and the minimum balance from a couple of hundred to a couple of thousand euros.
How to find a suitable payment system for IT business?
And the most important thing: how to choose a specific payment system? First of all, determine what functionality you need first. Understand if your business is risky from the point of view of banks, what is its market and main currency.
After that, contact the experts who will help you choose the right payment. As stated above, we cannot give the names of most payment systems, because this directly violates the agreement. However, in general terms - we will tell.
Payment systems in the UK
- A stable payment system created by banking experts from Latvia (who quickly realized where the Latvian banking system was heading and created a new project). Works with trading companies, with cryptocurrencies, offers payments in 34 currencies, loans.
- The new British payment system works with 26 currencies, allows you to buy insurance for business, offers exclusive cards, allows you to convert currencies at a favorable rate, make cross-border transfers.
Payment systems in Germany
- The system offers online banking, free transfers in EEA countries and to Switzerland, personal IBAN, cashback, transfers in euros during the day, MasterCard.
Payment Systems in Hong Kong
- Local payment is a real solution not only for Hong Kong companies that cannot open a local account, but also for companies from Singapore, the UK, BVI and others. Makes payments in HKD, EUR, GBP; work with third-party services such as PayPal, Stripe, Amazon; MasterCard cards that allow you to withdraw cash from any ATM in the world where they accept MasterCard.
Payment systems in Cyprus
- We collaborate with a platform that specializes in working with IT projects. Multi-currency account EUR, USD, GBP, CZK, HUF, RUB, PLN, JPY, CNY; own IBAN, processing cards on the site.
Payment systems in Lithuania
- Payment system with free account opening and service; high level of confidentiality; payments in EUR through SEPA and SWIFT; Own IBAN number for free; own mobile application.
- TrustCom Financial is a payment system based in Lithuania, but owned by Italian owners. A rare company that allows you to publish your name. Works with entrepreneurs from different countries. A unique feature - allows you to get a card and withdraw with it up to 5,000 euros per day. Only works with EUR. Also offers customers a 10% discount on commission when opening an account when using the IP1002SC coupon.
Payment systems in Sweden
- An interesting solution for those who are extremely important status. Payment allows you to accept payments from legal entities and individuals, buy cryptocurrencies. Transactions in Swedish kronor, euros, dollars, pounds, Danish and Norwegian kroner.
There are also solutions for specific types of business and company with activities falling into the risky section.
The modern choice of payment systems allows not only starting a business and at least somehow accepting payments from foreign customers, but also relying on large companies or companies with high turnover for high-quality and safe service.
Payments are easier than banks, but in terms of functionality they will soon cease to yield to them.
Why not open an account where it’s easier?