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Opening Bank Account For Payment Service Provider (PSP)


 

A Payment Service Provider (PSP) is a crucial intermediary in electronic payments, offering merchants online services for accepting electronic payments by a variety of payment methods including credit card, bank-based payments such as direct debit, bank transfer, and real-time bank transfer based on online banking.



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Why PSP Needs Dedicated Operational Bank Account?

 

The primary reason for a PSP to maintain dedicated bank accounts is to segregate operational funds from client funds. This separation is vital for transparency, regulatory compliance, and ensuring the smooth operation of business activities. Operational accounts cover business expenses, while client funds are managed through separate accounts to facilitate transactions on behalf of merchants and consumers.

 

 

Establishing A Master Merchant Account For PSP

 

A merchant account is a specific type of bank account allowing businesses to accept payments in multiple ways, primarily debit or credit cards. A PSP needs to establish merchant accounts to manage transactions efficiently for its clients. The key to success in this area is choosing the right banking partner capable of offering tailor-made solutions that cater to the varied needs of your clientele, including multi-currency processing and cross-border transactions.

 

Moreover, ability to open and manage multiple merchant accounts across countries and continents determines the PSP’s ability to offer a variety of alternative payment methods (APMs). Once PSP business starts growing, the ever increasing number of clients will dictate the need for more and more payment methods in order to keep those clients active and engaged.

 

If your PSP is looking to expand on APM offering and would like to open more Master Merchant Accounts, get in touch with us for a list of PSP-friendly APM providers.

 

 

Clients' Funds Management Accounts

 

For the handling of client funds, PSPs must open accounts that are specifically designed for this purpose. These accounts are vital for the PSP to manage transactions like currency exchanges, collections, settlements and payments seamlessly on behalf of their clients. The choice of bank and the type of account should be based on the PSP’s need for global coverage, multi-currency capabilities, and the ability to offer clients individual account numbers (IBANs) for transaction processing in their name.

 

Furthermore, integrating accounts with API connectivity is highly recommended for scalable and efficient operations, enabling PSPs to automate payment processing and reconciliation tasks.

 

If you would like to get an up to date list of PSP-friendly banks that can open Client Fund’s Accounts, fill out our contact form and we will send it to you by email.

 

 

PSPs And Crypto Payments: Collections, Conversions, Settlements

 

The integration of cryptocurrency transactions represents a frontier of opportunity for Payment Service Providers (PSPs). As cryptocurrencies gain mainstream acceptance, PSPs are uniquely positioned to facilitate collections, conversions, and settlements in digital currencies. This involves not only the capability to accept and store crypto payments on behalf of merchants but also the expertise to navigate the volatile landscape of crypto conversions (on-ramp and off-ramp).

 

There are new crypto use cases emerging every single month across industries: online e-commerce, forex and CFD brokers, online casinos, gaming, NFTs and Web3 merchants and so on. There are new revenue avenues and PSPs can easily get up and running with embedded crypto solutions without ever touching crypto themselves. If you would like to find out best in class embedded crypto payment providers, fill out our contact form and we will share an up to date list with you by email.

 

 

Essential Documentation For PSP Bank Account Opening

 

PSPs preparing to open a bank account must have the following documents ready:

 

- Certificate of Registration or Incorporation.

- Memorandum and Articles of Association, or equivalent.

- Official list of directors and shareholders.

- Identifications for all UBOs and authorized signatories.

- Proof of business trading address.

- Relevant regulatory licenses.

- Financial statements as proof of business operations.

- Comprehensive AML/KYC/CDD policies and reports.

-AML audit if required.

 

This documentation supports the bank’s due diligence process, facilitating a smoother account opening procedure.

 

 

Conclusion

 

For Payment Service Provider (PSP), establishing and managing bank accounts is a critical step towards operational excellence and regulatory compliance. By carefully selecting the right banking partners and preparing the necessary documentation, PSP can ensure they are well-equipped to offer secure and efficient payment processing services. Remember, the success of your PSP hinges not just on the technology you deploy but also on the strength of your banking relationships and the reliability of your financial infrastructure.

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