Multi-Currency IBANs: How They Can Help Your Business Grow

The first thing that you do when you learn about a business or have to deal with it is that you look it up. The entire world is online and so are businesses. When you set up a business online, there is always a possibility of finding clients that are not necessarily from your country. Now as foolish as it may sound to have to give up a client because of geographical locations, it is something you can easily evade by being smart and opening an offshore account that accepts multiple currencies.

Gone are the days when offshore accounts were opened to launder money and evade taxes.  They are now a way for businesses to legally access accounts that have more security, work with various currencies and get access to important payment systems carried out globally.

The Concept and Origin of Multi-Currency IBANs

A multi-currency IBAN account is an international bank account that diverts transactions in diverse currencies into one principal account and currency.

Back in the day, every country in Europe had its own specific way of organizing payment information while conducting international bank transactions. This diversity in the systems left room for a lot of mistakes and errors. In 2014, the European Union got together and harmonized its method of identifying bank information which is now known as the International Bank Account Transfer Number (IBAN). The IBAN system is now a part of other countries too, that are not limited to the EU. Virtual IBAN accounts are becoming more common by the day, as companies and individuals that have proper documentation, can open IBAN accounts online, without even stepping into an IBAN-favoring country. The rise in virtual bank accounts has led to the sudden meddling of borders in finance, globally. The clients can reside in one country and do business in other, while their bank account is located elsewhere.

It is common to sell products and services in several markets in a progressively globalized and multifaceted world. Multi-currency IBANs can be very fruitful for these businesses as they allow the merchants to collect international payments in diverse currencies and stock them in one centralized account.  This allows business owners to make the world their marketplace and benefit from the transactions on a global level.

Benefits of Virtual Multi-Currency IBANs

There are multiple ways by which multi-currency IBANs can help a business. Let us take a look at them:

  1. Avoid Currency Conversion Tools- When you are paid in a different currency, the internal currency conversion tools make a significant dent in your income. Multi-currency IBANs enable you to keep different payment gateways as they combine all your international payments in a single account. They allow you to accept and offer online payments in several foreign currencies. This way you can receive payments in multiple currencies from the various countries you deal in. The money received in the particular currency stays as is, with a mere fee for foreign exchange.

 

  1. Cost-effectiveness- If companies use multi-currency IBAN accounts to set up numerous virtual accounts, like physical accounts, they can exclude the substantial foreign exchange (FX) and transfer expenses linked with altering each payment compared to typical bank accounts. Not just the purchases, they make it very convenient for the companies to deal with settlements. Using multi-currency IBANs lessen the time it takes to process payments, helps with making payments in bulk, and provides prospects to trade with different countries.

 

  1. Extra Account Security- One of the most important reasons for keeping money in the bank is Security. It is imperative to keep the financial documents of an organization safe. Stored in redundant, encrypted cloud servers, multi-currency IBANs are safer and less likely to be misrepresented. They have very strict rules for KYC (Know Your Customer) and money laundering. Secure IBANs help provide various payments for foreign exchange and offer a solution to holding different accounts that may or may not be safe.

 

  1. Global Yet Local- Multi-currency IBAN accounts empower you to trade in any part of the world on your own terms. Your currency is the language you speak and it hardly leaves scope for any confusion. You get what you charge and there is immense clarity between the trader and the buyer, despite the regional difference. These accounts make you feel like you are trading locally.

 

  1. Insights on Spending- You never know where you would strike gold when you deal in different countries. The profits from one country may be much higher than in another. The multi-currency IBANs enable you to record and observe profits on a currency-by-currency basis and from that, you can ascertain how much you need to spend in a country, according to the returns you would get.

 

  1. No Multiple Relationships- Payment businesses using a virtual IBAN can access multi-currency, multi-jurisdictional banking without needing multiple bank relationships, as all your money would stay in a single account, and you would not have to deal with different banks pressurizing you to be on cordial terms with them, giving you more time to focus on the services you are looking forward to providing in your business.

 

  1. Saves Time- When you have a multi-currency IBAN account, you save a lot of time as you have to no longer worry about managing the reductions that are bound to happen when you are dealing with a different currency. Without a multi-currency IBAN account, you are bound to waste a ton of time while figuring out the deductions, but with it, you have one less item to worry about on your plate.

 

  1. Transactional Fees- International payments often require companies to suffer by cutting out a significant chunk from the payment received, as a part of transactional fees. Virtual multi-currency IBANs deal with companies akin to a local account. You save a lot of money by not having to pay for services you will not be using, for example, insurance, credit cards, etc. All this hassle can be easily avoided by keeping multi-currency IBAN accounts so that a more affordable getaway is created for all the companies involved in the transaction.

 

Parting Note

Multicurrency IBANs are a great way of taking your business to a global level. The world is getting smaller by the day through the power of the internet and it is for this reason that multicurrency IBAN accounts are gaining so much popularity, especially in developing countries. When a business from a developing country gets paid by a business from a developed country, the difference in the currency is significant and it can help you a lot, to grow your business and to make a mark online. Multicurrency IBAN accounts offer a hassle-free solution to most of the problems that are likely to arise when dealing with an international business or a client. They keep your money safe and help you avoid unnecessary expenses and thrive in an economy on your own terms.

 Contact Us For Banking Help

 At Capitalixe, we specialize in helping our clients who are often deemed as “high risk” find the perfect banking and payment solution for their needs. We do this by leveraging our network of over 50+ financial institutions, EMI’s and banks worldwide. Our goal is to help save you time and take the pain of finding trustworthy and suitable solutions away from you.   

Feel free to reach out to us for a complimentary consultation. We will be more than happy to help you. 

What Is Correspondent Banking and How Does It Work?

So what is correspondent banking?

A correspondent bank is a financial institution that offers services to another financial institution, usually in a different nation. It operates as a middleman or agent for another bank, arranging wire transfers, performing business transactions, receiving deposits, and gathering documentation.

Domestic banks will most likely use correspondent banks to service transactions that originate or are completed in other countries. In addition, domestic banks use correspondent banks to access international financial markets and serve international clients without having to operate branches abroad.

What Is a Correspondent Bank?

A correspondent bank is a bank in one nation permitted to provide services to a bank or financial institution in another country. Currency exchange, processing business transactions and trade documentation, and money transfers are the most frequent services provided by a correspondent bank.

How Does a Correspondent Bank Operate?

Correspondent banking is based on a deal between a foreign and a domestic bank to open a correspondent account, also known as a Vostro or Nostro account, at one bank to benefit the other. Correspondent banking generally includes the concept of reciprocal accounts that link two banks. These accounts are set up so that a domestic bank can make payments or money transfers on behalf of a foreign bank.

These correspondent accounts allow banks to manage international financial transactions for their customers that involve foreign currency exchange, such as those that often occur between an exporting business in one country and an importer in another.

What does the process look like?

A bank customer in one country must pay for goods from another country’s suppliers. The customer’s domestic bank determines the necessary foreign currency exchange transaction to permit suitable payment in the seller’s currency.

It deducts the necessary amount from the customer’s account. Then, it notifies its correspondent bank in the supplier’s nation to pay the matching amount to the supplier from the domestic bank’s correspondent account with the foreign bank in the supplier’s currency.

Third-party banks are referred to as correspondent banks. They bridge the gap between various financial institutions. As a result, they provide Treasury services between sending and receiving banks, particularly those located in different countries—for example,

  • exchange of currencies
  • make sure everything is in order
  • settlement
  • transfer of funds by wire
  • transfer of money

When clients travel abroad, correspondent banks may act as agents to handle local transactions for them. For example, correspondent banks can receive deposits, process documents, and act as money transfer agents locally.

What are Nostro and Vostro Accounts?

Nostro and Vostro accounts are the accounts held between correspondent banks and the banks for which they offer services. The holding bank refers to an account held for another bank as a Nostro account. The counterparty bank refers to the same account as a Vostro account, which means “your account on our records.” Generally, both banks in a correspondent relationship maintain accounts for each other to track debits and credits between them.

Correspondent banks are an essential aspect of the financial industry since they allow domestic banks to continue to operate when they can’t create branches in another country. For example, a small local bank with clients in many countries can form a partnership with a correspondent bank to suit its clients’ foreign needs. They have access to the international financial market as a result of this. As a result, the correspondent bank will charge a fee for this service, usually passed on to the customer by the local bank.

Nostro vs. Vostro Account

The terms “Nostro” and “Vostro” refer to the same bank account. The phrases are used when one bank has money on deposit with another bank, usually in the context of international trade or other financial operations.

Both banks in the partnership must keep track of the amount of money held by one on behalf of the other. The phrases Nostro and Vostro are used to distinguish between each bank’s two sets of accounting records.

The Latin words Nostro and Vostro are variations on the words “ours” and “yours,” respectively. The origins of modern retail banking may be traced back to the 13th and 14th centuries in Italy, where depositors and retail banks kept track of their account balances. The depositing customer held the Nostro ledger, while the bank kept the Vostro ledger.

Account Nostro

A Nostro account is a term used by Bank A to refer to Bank B’s “our” account. Nostro is a colloquial expression for “our money on deposit at your bank.”

The Nostro account records a bank’s money on deposit with another bank. These accounts are frequently used to streamline commerce and foreign exchange settlements. In contrast to regular demand deposit bank accounts, Nostro accounts are usually held by financial institutions and are denominated in foreign currencies.

Account Vostro

Bank B refers to the money on deposit at Bank A as “vostro.” The word “vostro” means “your money” and refers to “your money on deposit at our bank.” A Vostro account is similar to any other bank account. The account is a record of money due to or kept by a third party, most commonly another bank, although it can also be a firm or an individual.

A bank in the United Kingdom or the United States holds a Vostro account on behalf of a foreign bank. The money deposition happens in the currency of the country where the Vostro account is present.

Example of Nostro vs. Vostro

Consider the following scenario. GTBank, a Nigerian bank, receives a large amount of money in the form of remittances from its customers in the United States. Because GTBank does not have a physical presence in the United States, it enters into a contract with Citibank to have a U.S. dollar account opened for it remotely. One will place money received from American clients and businesses sending money to GTBank account holders in Nigeria in GTBank’s Citibank account.

Citibank will send the funds to GTBank’s US dollar account in Nigeria via SWIFT. The Society for Worldwide Interbank Financial Telecommunications, or SWIFT, is a member-owned cooperative. It provides its members with safe and secure financial transactions. Following the completion of the transfer, GTBank receives the dollar-denominated monies, translates them to the local currency (the naira), and puts them into the receivers’ local accounts.

GTBank’s Citibank U.S. dollar account is a Nostro account in GTBank’s eyes. In addition, Citibank maintains a Vostro account for GTBank in US currency.

Cash assets are Nostro accounts with negative balances. On the other hand, Vostro accounts with a credit balance are termed liabilities. Computerized accounting makes it simple to reconcile Nostro and Vostro accounts by simply entering “+” or “-” indications in the respective accounting systems of the banks.

How do International Wire Transfers work for Correspondent banks?

International wire transfers frequently happen between banks with no prior financial relationship. A bank in San Francisco, for example, that receives instructions to wire funds to a bank in Japan cannot do so without first establishing a working relationship with the receiving bank.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) network handles the majority of international wire transfers. The originating bank does not have a functioning connection with the destination bank. So, it can search the SWIFT network for a correspondent bank that does. Then, the originating bank sends the transferred funds to its Nostro account maintained at the correspondent bank after selecting one with agreements with both sides of the transfer.

Intermediary Bank vs. Correspondent Bank

Although there are some parallels between the correspondent and intermediate banks, such as the fact that they both function as third parties for other banks, there is a significant distinction between them. An intermediary bank completes transactions involving a single currency, whereas correspondent banks generally handle transactions involving numerous currencies. They’re essential for domestic banks that aren’t big enough to manage these transactions.

An Overview of Correspondent vs. Intermediary Banks

Beneficiary banks utilize correspondent and intermediate banks as third-party banks to enable international fund transfers and transaction settlements. The beneficiary bank is the receiving bank where a person or company has an account.

A person or corporation would have an account with an issuing bank in both circumstances. The procedure of transmitting funds from the issuing bank to the beneficiary bank is then completed by that bank using a correspondent or intermediary bank.

There are inconsistencies in the explanation of correspondent vs. intermediary banks. For example, correspondent banks can be separate from intermediary banks, or they can be a form of the intermediary bank that is indistinguishable from intermediary banks. It all depends on where the account holder is located in the world.

Banks as Correspondents

A correspondent bank acts as a middleman between the issuing and receiving banks, providing services on behalf of the latter. Domestic banks frequently use correspondent banks as their agent abroad to complete transactions that begin or end in another country. On behalf of the domestic bank, the correspondent bank can carry out a variety of transactions. These services include completing wire transfers, taking deposits, acting as transfer agents, and arranging papers for another bank.

Banks that act as intermediaries

The role of intermediary banks is comparable to that of correspondent banks. An intermediary bank is a link between an issuing and receiving bank, which may be located in separate countries. There is a frequent requirement for an intermediary bank when international wire transfers take place between two banks. This is especially when both banks are in different countries with no prior financial relationship.

Important distinctions

There is sometimes a distinction between the unique functions that intermediary and correspondent banks play in the United States and other nations.

One distinction is that correspondent banks are frequently in charge of multi-currency transactions. For example, a correspondent bank would be liable for all transactions from the US dollar to the Danish Krone. This is if the person initiating the transfer is based in the United States. Moreover, it’s applicable while he is sending money to someone in Denmark.

Correspondent banks are often located in the nations where the two currencies are local. However, a bank may be based in a separate country occasionally.

Intermediary banks transfer cash to complete international transactions, but only for one currency. A domestic bank is usually too small to handle international payments in this situation. Therefore, it turns into an intermediary bank.

Particular Points to Consider

All banks accept wire transfers, an electronic method of delivering money to another person or entity. However, international wire transfers are more expensive and complicated to complete.

Intermediary banks deal in foreign transactions in particular parts of the world, such as Australia or EU member countries. There is no distinction whatsoever between the correspondent and intermediate banks.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) network handles the majority of international wire transfers. Suppose the issuing and receiving banks do not have a working relationship. In that case, the originating bank can use the SWIFT network. It will help them to find a correspondent or intermediary bank that has agreements with both financial institutions.

Contact Capitalixe for correspondent banking solutions

At Capitalixe, we specialise in helping small, offshore, and emerging market banks obtain payment and banking solutions.

Our job is to match your company with the most appropriate and beneficial financial solution from our extensive network of over 100+ reputable payment and banking providers we work with worldwide.

By understanding your business goals, payment requirements, and market positioning, we take the time-consuming pain away of going to market and provide you with the solutions that are best suited to your needs.

The best part of all is our services are free of charge.

Feel free to reach out to us for a complimentary consultation. We will be more than happy to help you.

 

By Lissele Pratt

COO & Co-founder of Capitalixe

How do virtual IBANs enhance the growth of B2B cross-border digital businesses?

How do virtual IBANs enhance the growth of B2B cross-border digital business?

Digital merchants and online marketplaces are here to stay and are rapidly expanding. However, having a solid payment infrastructure is critical to their success.

Businesses must provide secure payment choices to their customers while balancing compliance and regulatory constraints. Adding virtual IBAN to your financial toolset streamlines and simplifies the process in this case. A virtual international banking account number (virtual IBAN) is a bank-issued reference number that enables payments to be routed to a (non-virtual) IBAN/bank account.

Virtual IBANs are addressing many of the inefficiencies between traditional banks and internet payments by modernizing transaction processes. In addition, they are assisting merchants in untangling the difficulties of conventional worldwide banking connections and overhauling their payment systems.

What exactly is a cross-border payment?

Cross-border payments occur when the payee and transaction recipient are located in different countries. Individuals, businesses, and financial institutions wanting to move payments across borders can use this service. International merchants must be able to accept payments in all of the countries they are targeting.

We developed a guide about cross-border payments so you can learn more about the global payments ecosystem and how to grow your business by choosing the proper payment partner for your international payments.

How to send money internationally?

To conduct an international bank transfer, you’ll need the recipient’s information, including their International Bank Account Number (IBAN) and Bank Identifier Code (BIC). However, a consumer making a payment to an merchants’ site in another nation will have to do very little to complete the transaction because the merchant and their payment service provider will handle most of the work.

Merchants can make SWIFT payments to their consumers or other businesses. In addition, Visa Direct and Mastercard Send will likely become more extensively used in the future, enabling secure and quick payments to be sent directly to a card.

How does virtual IBAN work for B2B trading across borders?

Accepting and sending foreign B2B payments might result in massive transactional fees for businesses. Virtual IBANs provide companies with the same features as a standard settlement account but without the costs of opening and maintaining a physical account.

Many traditional suppliers will try to sell new customers comprehensive packages that include services they don’t need, such as credit cards, worldwide payment services, and insurance. As a result, the entire process may become a significant burden for businesses, requiring them to devote a substantial amount of time and attention to a straightforward procedure.

A virtual bank account with IBAN provides payment services without the expense and complexity of a traditional commercial bank account. The usage of virtual IBAN accounts further reduces potential administrative costs. The entire system strives to simplify the reconciliation process, allowing enterprises to conduct business with ease worldwide.

FX and payments companies, as well as their consumers, can benefit from virtual IBAN accounts. FX and payments companies can utilize these accounts to manage a master IBAN account from which they can establish and allocate segregated virtual IBAN accounts to each of their customers, making settlement and reconciliation easier.

A virtual IBAN or virtual bank account with IBANis a multi-currency, multi-jurisdictional banking solution for payments businesses that eliminates the need for several banking partnerships.

Below listed are some of the primary reasons that you should know about:

Changing B2B Requirements

Firms are conducting business abroad and in the digital industry are constantly seeking methods to improve their cross-border B2B payment procedures to be competitive and stay ahead of their competitors in their target market niche.

The issue in this complex undertaking is finding efficient and available solutions and adequately executing them to perform flawlessly for all parties involved, including core business, partners, suppliers, and customers.

Determining which technologies are most suited to the payment demands of specific organizations and their international partners is critical to helping them survive and grow once the present worldwide epidemic stops.

Closing the Gap in Technology

Virtual IBANs, like harmonizing international financial regulatory systems, technically bridge barriers between enterprises and markets. Virtual IBANs in B2B cross-border commerce close this gap and reduce the capital overlay needs familiar with traditional banking solutions.

This is mainly due to business and payments’ increasingly global and borderless nature. However, there are also administrative efficiencies to consider (which are growing by the day) and the enhanced capital allocation that such systems enable. This is essentially the basis behind Visa’s new B2B connect service.

Regardless of the size or location of your company, there are several growth prospects outside of your current market. Visa’s job as a payments network is to handle payments between banks on behalf of their buyers and sellers.

Global Financial Regulatory Harmonization

When dealing with various financial regulatory systems worldwide, the most significant hidden benefit of virtual IBANs in B2B cross-border payments comes into play.

Because virtual IBANserves as a single clearing account for international transactions, there is no need for a company to maintain a banking relationship with a local bank to conduct business with local companies.

Furthermore, domestic industries in that country are authorized to transmit payments to virtualIBAN accounts. Therefore, that country’s rules and regulatory regimes have no bearing on the company’s capacity to do business.

In other words, corporations do not have to be concerned about local events and can instead concentrate on the big picture to grow their business.

What are the different types of International or cross-border transactions?

Cross-border payments include credit card transactions, APMs, and bank transfers. So naturally, customers prefer to pay most conveniently for them. However, they also want customized options and assurance that their payment information is secure and managed well. As a result, merchants must cover all bases and provide several payment options for international customers.

eWallet

An eWallet, sometimes known as a digital wallet, is a software-based electronic APM that enables clients to pay for online and in-store transactions. eWallets, which are commonly available as apps for smart devices, allow users to safely keep their preferred payment cards so that they may pay for goods and services. Alipay, Apple Pay, Google Pay, Neteller, and Paypal, are just a few examples of popular eWallets.

Consumers can use some eWallets to transact in several currencies and conduct overseas orders. Although you cannot term wallet-to-wallet typeas proper cross-border transactions, they make the entire process easier overall. The process is not classified as a cross-border payment until the funds are withdrawn from the eWallet and transferred to the merchant’s bank account.

Transfers between banks

Another long-standing method of making a cross-border payment is through international bank transfers. Most larger banks will keep a range of currencies on hand, but they will only be able to accommodate a few at a time.

As a result, when a UK customer wants to send money to a place where they don’t have the currency in stock, they’ll have to rely on their international banking associates to complete the payment. Smaller banks frequently lack foreign currency reserves. Therefore they rely on large banks to handle cross-border transactions.

This is simply a glimpse of cross-border payment processing; many more parties could be involved, causing the transaction to be delayed. SWIFT GPI is an attempt to speed up cross-border payment operations, which we will examine further below.

Payments by credit card

Credit cards are a popular choice for many people when making cross-border payments. Consumers submit their credit card information and wait for the transaction to be validated. However, there’s more going on behind the scenes. Because they must convert between two distinct currencies, cross-border payments necessitate greater effort from the credit card networks and acquiring banks involved. In addition, increased fees are transferred down the payment chain due to the increased workload.

Contact Capitalixe for custom banking solutions

At Capitalixe, we specialise in helping medium to high-risk clients obtain payments and banking solutions.

Our job is to match your company with the most appropriate and beneficial financial solution from our extensive network of over 100+ reputable payments and banking providers we work with.

By understanding your business goals, payments requirements, and market positioning, we take the time-consuming pain away of going to market and provide you with the solutions that are best suited to your needs.

Feel free to reach out to us for a complimentary consultation. We will be more than happy to help you.

 

 

 

How to find the best banking provider for your crypto exchange business

How to find the best bank provider for your crypto exchange company

So, you’re a crypto company wanting to expand your business, but you need to secure the right banking partner. How do you go about finding the best bank account for crypto? And how can you tell which is the best for your needs?

The world of crypto is still facing a lot of challenges, not least because it has a tendency to be volatile and unregulated. Despite this, there is a huge interest from various companies in cryptocurrencies and blockchain technology – especially considering the possible benefits that they could bring to businesses all over the world.

In recent years, there are now some banks that have been trying to establish themselves as leaders in crypto-related services and some of them have already entered the crypto sphere – but not all of them are suitable for every crypto business. 

This means that crypto companies need to make sure they choose the right banking partner for their particular needs. However, this isn’t as easy as it sounds. But don’t fret. We’ve put together a comprehensive guide that will help you choose the right partner and explain what you need to look out for.

Challenges Facing Crypto Companies

Before we get started, let’s take a quick look at some of the challenges facing companies who choose the wrong bank account for crypto merchants:

Chargebacks and fraud 

Chargebacks and fraud are a huge concern for any company accepting and operating with cryptocurrency. The right banks will be able to mitigate this risk and protect you from fraudulent activity and chargebacks.

Compliance and regulation  

Banks that specialise in cryptocurrency tend to work closely with regulators, ensuring they’re aware of the business you’re doing and helping to maintain compliance. Banks that do not specialise in cryptocurrency will often struggle with regulation, leaving you exposed.

AML and KYC 

There are some banks and financial institutions out there that don’t comply with Anti Money Laundering (AML) and Know Your Customer (KYC). If you choose one of these banks, it will put your business at risk of unlawful activities. Banks and financial institutions that specialise in cryptocurrency are fully compliant with AML and KYC.

Choosing the Right Banking Provider for your Crypto Company

When it comes to choosing a banking partner, there are a few different things that you need to consider. The right choice depends on your profile and what your business is looking for in a bank.

You’ll also want to determine which features are the most important for your particular business model. This will help you find an institution with the appropriate infrastructure and expertise while also ensuring that you get a positive banking experience.

Here are five steps you need to take when choosing a banking partner for your crypto company:

Step 1: Do your research and make a list of potential banks and financial institutions 

The first step is to compile a list of potential banking partners – and this is very important. Make sure you include all the relevant institutions that might be able to help your crypto company grow.

You’ll also want to do some research around each prospective bank, such as reading reviews from other businesses using them and checking their latest news online (you can find more information in addition to what’s provided on their website).

You’ll want to pay special attention to:

  • Regulation: You’ll need to ensure that your bank is compliant with relevant regulations so they are able to handle crypto transactions. 
  • Security of funds: You’re going to be trusting these bank providers with your money, so they must have high levels of security in place. Make sure the funds are held in segregated accounts away from their own company funds, protecting your funds in the event of insolvency or bankruptcy.

Once you’ve compiled your list of potential partners, it’s time to move on to step two in our guide.

Step 2: Figure out which bank is the best fit for your company

After you’ve drawn up your list of potential businesses, you’ll need to evaluate how each one can help your digital currency business move forward. You should look at the available features that they offer and compare them against your requirements. For instance, virtual IBANs for crypto in multiple currencies are essential when it comes to doing business internationally, so if your top priority is simplifying the virtual currency transaction process then this feature should be high on your list.

Step 3: Consider how easy it is to open a virtual account with the bank

In order to do business with a digital currency company, banks will need to set up a virtual account. This makes it possible for your business to transfer virtual currencies and deal with fiat currencies as well – something that might be important for your digital currency exchange.

Make sure to assess how easy it is for digital currency companies to open virtual accounts with your prospective bank and if they’re willing to do this in a timely manner. 

Step 4: Check if your cryptocurrency company is being treated with good customer service

Even though banks are generally very responsive when it comes to meeting the requirements of their customers, some institutions have more experience dealing with virtual currency-related issues than others. These banks generally offer dedicated services for businesses that work with cryptocurrencies – so it’s important that you find an institution that is willing to help your digital currency business thrive.

Step 5: Determine how easily you can transfer funds and open IBANs (or other payment channels)

Once you’ve established which bank offers the services you need, it’s important to find out if there are any fees or restrictions involved with transferring currencies – such as setting up an IBAN for crypto. You should also check if there are certain rules that affect how you can pay your suppliers and customers.

There might be certain banking procedures and actions associated with your business type – so you’ll need to work out whether they’re appropriate or not. For example, if you deal with a lot of small-scale transactions, then it’s likely that different rules will apply compared to taking large sums across borders.

Final Thoughts

It’s important that you do your research and seek advice from other cryptocurrency companies and people in the industry when choosing a banking provider for your business. 

As crypto is still a new industry and widely unregulated, there’s going to be a large portion of financial institutions that won’t work with any sort of crypto companies, but don’t get disheartened. This is where we can help! 

At Capitalixe, we specialise in helping crypto companies obtain high-risk merchant accounts, bank accounts in multi-currency which includes both SWIFT & SEPA, and banking solutions for crypto. 

Our consultants are more than happy to discuss your banking options and give you all the information you need before making any decision.

Contact us today!

Digital Payment Trends Dominating 2022

Digital Payment Trends Dominating 2022

The Covid 19 pandemic has resulted in a rapid increase in both the volume and value of digital payment options. In fact, according to Statistica, the total transaction value in the digital payments segments is projected to reach $7,860,739m in 2022 and $10,715,390m by 2025.

Mobile wallets, cryptocurrency and voice-activated payments – it’s all changing so quickly that it’s hard to keep track. But at Capitalixe, we’ve got your back. 

Below are some of the biggest trends in digital payments today and what the future holds for them. So grab a pen and paper (and a lovely hot cuppa) because here are the trends you’ll be discussing at your next dinner party…

Mobile Wallets 

Now one of the most used digital payment methods by consumers, mobile payments use will continue to rise with 26.93% of CAGR projected between 2020-2025.

These services offer customers convenient, instant payments with no need for cash or PIN numbers. And they’re changing more than just the shopping experience, they’re even revolutionising how we make utility bill payments and send money abroad.

Today, we can use our mobiles to pay for groceries and petrol or even delve into the world of digital currencies by transferring Bitcoin and other cryptocurrencies between wallets. And we can do it all with just a tap of our phones.

However, there’s still room for improvement in this sector as many retailers are still reliant on cards as an alternative to cash. This is mainly due to the fact that not everyone has a mobile wallet and some customers still don’t trust them.

BNPL Schemes

Buy Now Pay Later schemes are quickly becoming the preferred payment method, especially with millennials and Gen Zs. StudentBeans found that 42% of UK shoppers aged 16 to 24 used a BNPL service for big-budget fashion items and expensive tech purchases. 

These schemes allow users to spread the cost of expensive purchases over time. Let’s say you want to buy a product for £200. You can split this purchase into three or four monthly instalments with zero interest.

Klarna is one of the leaders in this field, with an impressive 90 million users utilizing their services. They are quickly replacing traditional credit cards, especially for internet shoppers. Last year, the company announced it had raised $639 million in funding rounds, bringing the company valuation to $45.6 billion.

Voice-Assisted Payments

If you own an Alexa, Google Home, or Siri device, you probably use it to get the weather report or book a cab. But did you know that these devices can also make your shopping easier?

Statista found that 35% of users use smart speakers for buying products like home care, groceries, and clothing.

So how does voice-assisted shopping work? You simply tell your digital assistant to order you a new pair of shoes, and they do it for you – there’s no need to type in any payment details as they are already logged into your account!

Cryptocurrency Payments

The future of digital payments is undeniably crypto. And with mainstream providers like PayPal, Stripe, and Square now accepting Bitcoin as a form of payment, it’s easier than ever to use these new currencies.

40% of large corporations in the Americas, Middle East, and Africa are considering using digital currencies for purchases over the next year. Plus cryptocurrency is helping a number of our clients who have high-risk merchant accounts. 

This includes the online gambling industry which has been completely revolutionised by cryptocurrency. Our Co-founder Lissele Pratt discussed how in Fintech Times. 

Named one of the biggest trends in the payments industry by PYMNTS, crypto is becoming an increasingly attractive payment option. If you’ve still got doubts about them, here’s why more and more companies are looking into crypto payments.

Artificial Intelligence & Machine Learning

AI is already changing the way we live, and now, it’s also revolutionising digital payments.

Machine learning algorithms are helping to identify fraud and prevent them, as well as providing real-time security measures against hacking.

AI can also help companies personalise the customer experience. Algorithms can identify a user’s shopping habits, preferred payment types, and any special requests – all in real-time!

As people become increasingly reliant on AI to provide a better user experience, these technologies will continue to gain in popularity.

AI Banking

As well as improving the user experience, AI is also starting to take on some of the back-end tasks that are traditionally handled by humans.

For example, AI can now provide automated financial advice based on individuals’ spending habits. Meanwhile, chatbots are also helping customers manage their accounts and complete simple transactions – without ever having to speak with a human being!

In the future, we may even see AI-enabled financial advisors replacing some of the roles of human advisers. For example, rather than recommending a specific assortment of products to invest in, an AI system would be able to provide financial advice based on individual circumstances.

Final Thoughts

So there you have it. Our top digital payments trends for 2022.

As technology continues to advance, we can expect to see more innovative payment technologies – particularly in the fields of artificial intelligence and cryptocurrencies. These could all become integral parts of our daily financial routines over the next year, from voice-assisted purchases to chatbots.

Capitalixe

At Capitalixe, we leverage the latest in financial technology solutions to help high-risk companies like those in the gaming and cryptocurrency sectors. We can help attain high-risk merchant accounts, multi currency IBANs or even bank accounts for financial institutions and the latest payment solutions. 

Contact us today to find out how we can help your business grow!