Don’t be afraid of payment systems.
When clients are offered an IBAN account with a payment system, they are usually strongly opposed to this. Their first reaction lawyers get is “What I need is a reliable bank, not some payment thing”.
Over the years I have understood one thing: those clients who have been using the services of overseas banks for several years are not afraid to have a payment system account, and they commonly have a few. And then there are other clients, let’s call them novices; setting up their first bank account, they firmly believe that the bank is a reliable machine that will keep their money safe and help them go about their business without any worries. Well, way off the mark!
A story of account opening with a Polish bank
Let me tell you a funny story about my recent experience of opening an account with a foreign bank.
A month ago I went to Poland to set up accounts with 2 major banks. Lawyers prepared the documents 1 and a half months in advance and got prior approval for the account opening.
Here is what actually happened, and you judge for yourself:
Of course, I had to queue up in both banks (no personal manager, everyone is equal!). Then the manager brought in a batch of papers 5 centimeters thick: those turned out to be questionnaires, application forms, warranties and other forms. There were documents to confirm that I would use the bank account in good faith, a form regarding personal data protection, a form regarding the General Data Protection Regulation, an oath that I would not work with cryptocurrencies, and so on and so forth. A total of 40 signatures. After that, we headed over to a computer on the bank premises to activate logins via online banking. The PC’s mouse was impossible to use, it seems that even Ukraine’s Oschadbank has more advanced technologies.
You know, when you move the mouse but the screen is too slow to react to this movement. And on top of that – having to wait 3-5 minutes for each page to load. Finally, with fits and starts, we managed to activate the data. Altogether the meeting at one bank took around 2 hours. And following the one-month compliance period, the bank refused to open the account! Another bank which is extremely inconvenient to work with did open an account.
Upsides of payment systems
Summing up: payment systems certainly have their weaknesses. But in the light of recent events and increasingly tougher compliance requirements, it is outright impossible not to have a payment system account these days.
Today’s payment systems care about their clients, listening closely, and responding to their queries; they are open-minded and, most importantly, they make it possible for you to do business.
Those who have been using bank services for years will get this: when the bank, having received all documents, contracts, and invoices regarding payment of 1500 euro, asks you: “And now explain please, how and where did you meet your partner?”, one feels compelled to reply: should you not mind your own business? Those are our business processes and they are not your concern.
Payment industry scam – yet another true story
Of course, you should not open an account with any random payment system advertising itself to you on Facebook. And there’s the recent news of ePayments that has scared everyone. Indeed, there is a lot of fraud in the world of payments. One needs to take the time to select their payment service provider.
A manager at MONEYPAY.COM has messaged me the other day, messaged repeatedly, and quite persistently. I’ve decided to take a look at this payment system.
Surprisingly, the website features the US President and Angelina Jolie advertising the institution’s services. At the same time, no legal documents, no best practice policies or PCI DSS certificate; only Philippines contacts, and a persistent manager. You have probably understood by now that resourceful guys Photoshopped the actress and the President into a nice video. Here’s an example of peculiar “payment systems”. So take good care choosing where to open your account! Don’t fall for headings like “an account set up in 3 hours.”
My personal advice is simple – diversify.
1. An account with a reliable traditional bank is a must, but payment systems are also worth looking at.
2. Do not keep too much money in payment system accounts. “Much” can mean different things for different people, 20000 euro is a lot for one person while for someone else an amount of 200000 is not that big.
3. Put the eggs in different baskets: banks, wallets, payment systems.
4. Check up the financial institution to which you entrust your funds (legal documents, contacts, actual office, founders, market history, etc.)
And do remember: should you need help with opening a foreign account, feel free to message in our Telegram chat for a free online consultation.