Account in the payment system - differences from the classic bank account and advantages
The work of any business, including international, is closely connected with bank transfers and accounts. For foreign companies, opening a corporate account allows you to accept payments from customers, send payments to contractors, pay taxes and carry out any operations.
With rare exceptions, everyone needs a bank account. But opening a bank account in a foreign bank today is accompanied by an extremely complicated and protracted bureaucratic procedure, while no one can guarantee a successful account opening in the end.
Difficulties with opening bank accounts have led to an increase in business interest in their direct alternative – accounts in payment systems. This article is a must–read for owners and managers of businesses using foreign companies and accounts - you will be able to learn in detail about what accounts in payment systems are, what are their advantages and differences from classic bank accounts, as well as to study a brief overview of several popular payment systems.
Do not delay reading this article and discover new opportunities for your business!
What functions does the account have in the payment system?
A payment system is a licensed financial institution with an appropriate license (as a rule, these are EMI and/or PSP licenses), which has the right to open accounts and conduct settlement operations for its customers.
It should be noted right away that the account in the payment system is not a direct analogue to a bank account, but allows you to carry out all the necessary settlement operations (accept and send payments, store funds).Almost all European payment systems provide their customers with an individual IBAN number for SEPA payments (payments in Euros within the EU). This means that when working with European contractors and clients, there will be no difference in bank details or the method of accepting/sending payment – everything is like in classic banks. Some payment systems are also members of TARGET2, which greatly simplifies the passage of payments in Euros.
With SWIFT payments, things are somewhat more complicated. Many payment systems do not provide their customers with the opportunity to work directly with such payments, only through the account of the payment system itself. In practice, this means that when your payment is received, the sender will be the payment system itself, and not your company (the name of which will appear in the purpose of the payment). The situation is similar with the receipt of payments to your account in the payment system – the beneficiary (recipient) of the payment will be indicated by the payment system itself, and the name and unique code of your company's account inside the system will be indicated in the purpose of the payment. Of course, there are also payment systems that provide direct IBAN for SWIFT payments, but there are not so many of them. These payment systems allow customers to conduct all transactions in exactly the same way as classic settlement transactions through a bank.
In general, most payment systems can work with a variety of currencies, not just the most popular Dollars or Euros, so there are no problems when conducting transactions in different currencies. Some payment systems even open so-called "multi-currency" accounts, which in practice means a simple conversion of your money into any currency available in the payment system.In addition to the basic functions of receiving and sending payments, opening an account in the payment system often gives you access to options such as:
1. Issuance of payment cards linked to your corporate account (VISA, MasterCard, etc.)
2. Connection of Internet acquiring (merchant accounts for accepting payments from payment cards)3. Replenishment of phone accounts and wallets in other systems (for example, WebMoney) 4. Internet banking 24/7 allows you to access your personal account and manage your account in the payment system from anywhere in the world.
Thus, the account in the payment system is perfect for settlement transactions by foreign companies, especially in the Euro area.
Advantages and features of the account in the payment system
The advantages and features of accounts in payment systems are due to the features of their licenses. Since payment systems operate under their own license (not banking), they are not available to classical banking services, such as lending, accepting deposits, etc. In addition, not all payment systems are participants of state deposit guarantee funds.
At the same time, this opens up additional opportunities for them, which banks are deprived of:
1. A simpler and faster account opening procedure (usually takes several days, not months as in classic banks)2. There is no need for the client to have a substance (a real office, employees and activities in the country of registration of the company)3. Simplified client identification procedure (no personal presence required)4. The cost of accepting and sending payments is usually lower than in a bank. 5. There are no requirements for the presence of a deposit or an irreducible balance
6. Greater "flexibility" when accepting a client's business (we are ready to take businesses with medium and high risk).
At the same time, it should be remembered that not all payment systems are the same, as in general, and banks. Some of them specialize in specific types of business or operations, others set a commission for opening an account, etc.
A brief overview of popular payment systems — how to choose the right payment system?
A wide variety of payment systems can confuse even an experienced businessman. In order to choose the right payment system, you need to take into account many details and features of the business itself.
Next we will look at some of the most popular payment systems and their features.
Transferwise, Paysera, Cardpay
The names of these payment systems are well known in business circles, as they are used by many small and medium-sized businesses.
Transferwise and Paysera open accounts for different categories of businesses, but only with a low level of risk. An important difference between these payment systems is the speed of account opening and the fact that account opening takes place without additional fees.
Cardpay is a payment system registered in Cyprus. The key features of this system are its specialization in IT business, as well as the provision of an individual IBAN account for both SEPA and SWIFT payments.
Despite the fact that all three are very popular payment systems, they are not suitable for all types of businesses, and working with them requires a certain degree of caution, because during complex transactions, accounts may be blocked or even closed.
Bilderlings and SatchelPay
Businessmen have been choosing European payment systems Bilderlings and SatchelPay for their foreign companies for many years.
These payment systems are more flexible in accepting new business than the previous three, but their use can be more expensive — both payment systems charge significant fees for opening and servicing accounts.
Bilderlings Pay Limited is a payment system registered in the UK, with a license issued by the British financial regulator FCA (UK regulator). The system's commission for opening an account is 800 Euros for international clients (the company's beneficiaries are not from the EU). It is characterized by greater flexibility compared to the first three payment systems, excellent customer support, as well as the ability to make settlements with the Russian Federation without unnecessary difficulties.
SatchelPay, UAB is a payment system registered in Lithuania, with a license issued by the Bank of Lithuania. The system's commission for opening an account is 1075 Euros for international clients (the company's beneficiaries are not from the EU). This payment system offers additional advantages in the form of salary and card projects, as well as openness to new types of business. SatchelPay allows freelancers and companies to service entire corporate projects within the system without commissions and additional costs, as well as to issue cards for their users.
Antwort specialists have extensive experience in opening accounts in banks and payment systems for all types of businesses. If you want to open an account and get high–quality advice on all related issues, contact Antwort - we always have the right answer for you!