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Open a bank account for payment gateway 

To open a bank account outside of your country of residence to accept payments from your online store sales is an ideal complement to save taxes and avoid paying high commissions for currency exchanges. To understand better the advantages of opening a bank account outside of your country of residence, we must analyze first the differences between a payment gateway and a bank account.

Payment gateway VS. Bank account

Many people confuse the terms payment gateway or virtual terminal (merchant account + payment gateway) with a bank account (account with a debit card to deposit funds and use it later for personal or corporate needs). The difference between these two is that a payment gateway has a credit account with the bank called merchant account number, while a bank account can be opened separately without the obligation to have a credit with a financial entity.

The acquiring bank is paying daily by wire transfer the credit operations that were processed by the virtual terminal, and that is why the main factors analyzed when granting a new merchant to an e-commerce is a nature of business, the level of risks and the country where the client has an account to collect his funds. When you contract a virtual terminal or a payment gateway, the acquiring bank or payment processor has to transfer to your bank account the funds generated from the sales. These sales can be paid in your country of residence or outside of it.

Receiving funds in your country of residence or outside.

Benefits of receiving and keeping funds outside the country of residence

  • Banks in the United Kingdom, Lithuania, Estonia, Puerto Rico and Malta have more experience in online payment methods than other countries, since they are countries whose economy is based on finance. Banks in these countries know perfectly where each transfer comes from and why.
  • Bank account maintenance fees are lower.
  • Bank accounts can be opened for low risk and high-risk businesses.
  • Your local tax agency has no excess to your banking information.
  • Bank accounts opened outside your country of residence cannot be blocked nor seized by your local fiscal authorities.
  • A bank account abroad opens the doors to bank secrecy.
  • You can contract credit and debit cards to make withdrawals of cash in any country in the world without restrictions.
  • You can open bank savings accounts in other currencies and not lose money by making the change.

Disadvantages of receiving and keeping funds in the country of residence

  • Currency: Usually, local banks work only with low risk currencies, such as, Euro, US $, GBP, CAD, AU $ and Japanese Yen. If you process payments in Rubles, $ HK, Singapore SGD, INR, BGN, Swiss Francs, Israel Shekel, Norwegian Crowns etc. then you may face the problem when looking for a bank account in these currencies in your country of residence.
  • Fiscal authorities monitor all the sales processed by the payment gateway.
  • The bank can consider your bank account as of high-risk and take you through verification process every time you receive processor’s transfers.
  • Your bank account is not anonymous.
  • With a bank account in your country of residence you cannot protect your savings against seizures.
  • The bank account is subject to the law of automatic information exchange.

Where to open a bank account for my virtual terminal?

Customers who need to open a bank account abroad have 2 options: European Union and outside the European Union.

The wire transfer payment system of the European Union works by IBAN. The advantage of this payment system is that it is very economical, and the funds kept on bank accounts are insured for an amount of 100,000 euros. The recommended countries to open a bank account in the European Union are: United Kingdom, Lithuania, Estonia, Bulgaria, Czech Republic, Slovakia, Malta, Portugal, Cyprus and Switzerland.

The system of wire transfer payment outside the European Union works by SWIFT. Unlike IBAN the process is slower (2-5 days) and opaquer. The recommended countries to open a bank account outside the European Union are: Puerto Rico (USA), Belize, Hong Kong, Singapore, and St. Vincent and the Grenadines.

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