Top 5 Banking Mistakes Due to Incorrect Payment Structures

Many entrepreneurs, when faced with payment problems, complain about overly strict compliance or bank inefficiencies. However, in our experience, many such issues can be avoided with a well-designed payment logistics and structure. One of the main areas of work at the international law firm Antwort Law is opening corporate accounts worldwide in both traditional banks and payment institutions, as well as resolving banking issues. No business can be successful without a well-functioning corporate account and a stable payment flow. Let's examine the main mistakes businesses make in this area and provide the best recommendations for avoiding losing money due to your own mistakes.

Mistake #1: Mixing Payment Streams

The logic behind this is simple: the bank analyzes not the company, but the payment pattern—where the money comes from, where it goes, whether the chain makes economic sense, whether it complies with the relevant jurisdiction, and whether there is supporting documentation. If incoming payments are made to the account of one legal entity and withdrawn to another company, especially if the transfer is to a different jurisdiction and not aligned with the client market, even if both are owned by the same beneficiary and the scheme is legal, the bank often suspects siphoning off funds, tax base erosion, or cross-border money laundering. Therefore, if such a scheme is unavoidable, you must gather evidence in advance to support its logic and justify its necessity.

Mistake #2: Incorrect Payment Purposes

Many perceive the payment purpose as largely a formality: sometimes only general terms like "services" or "consulting" are provided. However, the payment purpose is a key element of the AML analysis that the bank evaluates first. It is used to determine the economic significance of the income, the type of income, license compliance, whether the actual value matches the declared value, and other parameters. To avoid unnecessary requests for clarification, payment suspensions, and other unpleasant consequences, clearly state the purpose and scope of the payment, and prepare a description of the payment flow with templates for the payment and, of course, the basic agreement/offer in advance. Be prepared to provide all of this upon the bank's first request.

Mistake #3. Missing Documents or Inconsistencies

Again, banks operate by a simple but powerful logic: a specific payment = a specific document. Every payment in either direction must be supported by some document: an agreement, specifications, invoice, or proof of delivery. Otherwise, the bank may classify the transaction as unconfirmed. The bank is accountable not to the client, but to the regulator. If it cannot find such justification or the payment does not match the document, it will certainly subject you to a series of KYC/KYB inquiries, possibly freezing the payment, and sometimes even terminating the relationship.

Mistake #4. Using "Risky PSPs"

Risky PSPs (payment service providers) are payment aggregators that work with businesses in traditionally high-risk industries such as cryptocurrency, gambling, forex, complex digital services, and others. Such platforms may lack a full license, hold client funds in operating accounts, lack reserves, and can close at any time. Many companies have encountered such unreliable intermediaries, finding their funds frozen and unable to withdraw them. Banks are aware of this risk and are always on guard, often refusing to process transactions in such cases. Use reputable PSPs whenever possible. If you are unable to open an account with them, contact us – our extensive experience and expertise with top payment providers can help.

Mistake #5. Transactions between Related Companies

It's no secret that related companies often lead to an increased risk of cashing out, tax evasion, and illegal capital transfers. Related companies are businesses where companies share a common owner, director, or related or affiliated entities—all of which pose a risk to banks. Any payment between related entities requires corporate documents, protocols, and explanations of the economic rationale; otherwise, the payment is more likely to be subject to scrutiny, stalled, or blocked.

An improper payment structure is costly, as banks view you as a risky asset, easier to dispose of than to ultimately expose themselves to higher-level regulators. It's safer to create a transparent, legally sound payment plan with competent consultants, including:

• PAY-IN-PAY-OUT flow map,
• jurisdiction selection,
• bank and PSP selection,
• contract structure,
• payment purpose,
• supporting documents,
• explanatory notes,
• rules for the finance department.

Antwort Law eliminates the main cause of financial blockages—a chaotic structure. Write to us - we will audit your payment flows and show you where you are losing money and how to then eliminate it.

Lidia Ivanova

International lawyer
Antwort Law