A business account in the payment system can be especially convenient for small and medium-sized companies and entrepreneurs who sell goods and services remotely, freelancers, various Internet businesses, regardless of the country of location, as well as the location of their customers.

For companies, payment systems in some cases can become a convenient alternative to bank accounts (since they provide settlement services, card products, and often also payroll projects). However, they do not completely replace them if the company requires not only settlement services, but also other services provided only under a banking license.

Advantages of payment systems

  • Ability to remotely open an account, simple online registration of an account;
  • Availability of various currencies, as well as multi-currency accounts;
  • Fast international settlements (verification time and “depth” of identification of payments is much less than in banks, although it may depend on the amount of the payment);
  • Possibility of issuing payment cards (including corporate ones) of the world’s leading systems;
  • Remote account management via the Internet from anywhere in the world, including using mobile applications;
  • The ability to withdraw funds to banks or to accounts in other payment systems;
  • Loyalty to non-residents.

Accounts opened in European payment systems are assigned numbers in the IBAN (International Bank Account Number) format, which makes the details of such accounts practically indistinguishable from bank ones. It is possible to open multi-currency accounts with dedicated IBANs in each of the required currencies, which allows you to receive and send international transfers, avoiding conversion costs.

Disadvantages of payment systems

  •  Novelty. Many payment systems that offer corporate accounts and international payments are relatively recent and have yet to win the trust of customers, and this requires stable and efficient operation for a long time.
  •  Limited range of services. Many banking products are not available in payment systems (apart from the settlement service itself), which may be required by a company when using a corporate bank account.
  •  The prospect of increased regulation. Unfortunately, it cannot be ruled out that over time, the level of attention to payment services by national regulators will grow, and the conditions for establishing relationships with customers will approach banking ones.

Legal status of payment systems in the financial services market

Companies representing payment systems or electronic money services must have the appropriate licenses in their countries of registration. The names and scope of such licenses may vary from country to country. Turning to unlicensed companies entails significant risks for the client.

Such companies may have different status, for example, a payment service provider, an electronic money institution, a non-banking financial institution (that is, an institution that does not have a full banking license, but is authorized to provide settlement services to customers ).

Payment systems do not operate in an “isolated” environment. They use the infrastructure and services of various partners, including banks, other payment service providers, processing centers, etc. In some cases, entering into relations with payment systems, the client assumes certain obligations to the partners of such systems (which is prescribed in the general terms of service, with which the client agrees).

If we are talking about the so-called “electronic money”, then electronic money issued by a payment service provider and recorded on the client’s account is usually not considered a deposit or investment instrument in the sense of banking legislation, and they are not subject to appropriate guarantees.

Contact us to open a business account to transfer money to your partners around the world – [email protected]

 

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