How to choose a current account for business in EU

Fintech platform Bilderlings explains everything you need to consider when choosing a current account with banks and payment service providers in the European Union (EU).

Payments

For any business, a bank account is a principal way of receiving and sending funds to its partners. Therefore, when choosing a financial institution, first of all, you should to get acquainted with transaction possibilities.

1. Make sure that you can send and receive money from your current account to the countries in which your business operates. So, if your activities are limited to the European Union, then SEPA payments (i.e. payments in the Single Euro Payments Area) will be enough.
To be able to carry out international money transfers, the current account must be connected to SWIFT - an international interbank system.

2. Make sure that the current account supports the currencies you require for your business.
Please note: the conversion services don’t offer the possibility to make transfers in different currencies! Some payment systems only offer conversion services for investment purposes - e.g., you can change one currency to another and keep it in your account (earnings from changes in the currency exchange rate). Therefore, please pay attention whether there are multi-currency payment services available.

Direct payments and individual IBAN number

IBAN is an international bank account number. Every financial institution has it. While not every payment service provider offers its customers an account with an individual IBAN number. It means that your funds aren’t stored in a separate account, but in the general account of the payment service provider, and when partners send you money, they will have to indicate the details of the financial institution instead of your company’s information. Having an individual IBAN number significantly speeds up transactions.

For a correspondent bank, an account with an individual IBAN number in the payment system looks exactly the same as a bank account. And if your partner transfers funds to the general account of the payment system, then the correspondent bank may have some questions, and the transfer may be delayed. That means if you open an account with an individual IBAN number in a payment system registered in the UK, then for other banks it will look like an account number in a British bank.

Remote cooperation

This is one of the unquestionable advantages in the case when your bank or payment company is located in another country. Today, many financial institutions offer a simplified account opening scheme for their clients: you don’t need to be present at the office and there is no need to send documents by courier.

Quality of services

This is an aspect that many customers unfortunately disregard at first, and then regret it later. Automation of all processes means that instead of a personal manager and a private banker, you communicate via a chat bot or reach out to unqualified people from a huge call centre.

For individuals, it is not a big problem, but for businesses - it is definitely a very important issue. Personal managers are like a private banker - they understand the nuances of your business and make sure that every payment is made without a hitch. They explain the client what documents may be needed for a transaction, how best to fill in the field “payment purpose” and other required details. The more serious is the business, the greater role the personal manager plays.