In today's e-commerce age, the ability to receive payments is crucial for businesses and freelancers alike. Stripe and PayPal stand out as two of the most popular platforms for handling online transactions, but to harness their full potential, having a reliable bank account is of great importance.
This guide will walk you through the entire process of opening a bank account tailored for receiving payments from Stripe and PayPal, ensuring you're set up for success.
Understanding Stripe and PayPal
Stripe and PayPal are powerhouse payment processors that facilitate online transactions for millions worldwide. Stripe appeals to developers and businesses with its customizable payment infrastructure, while PayPal is known for its wide acceptance and user-friendly interface.
Each platform offers unique features like fraud protection, straightforward checkout processes, and global payment acceptance, but they also come with their own set of fees and operational nuances. Understanding these differences is key to choosing the right service for your needs.
If you are looking to expand your payment gateway partnerships, drop us a line and we will share some great and cheap options for payment processing.
Preparing to Open a Bank Account
Before rushing to open a new bank account, consider the requirements. You'll need to decide whether a business or personal account suits your operations. Typically, businesses should opt for a business account due to its specific benefits like higher transaction limits and additional legal protections. Gather necessary documents beforehand, including identification (KYC), proof of address (POA), business documents, business plan or explanation of flow of funds.
Depending on a country your business is register and based, you might need to provide more documents. This is especially true if you have a company and your residency elsewhere (sometimes called non-resident bank account).
Choosing The Right Bank
Selecting a bank is a pivotal decision that affects your financial operations. Look for a bank that offers low fees, robust online banking services, and excellent customer support.
Compatibility with Stripe and PayPal is non-negotiable, so ensure the bank is not only capable to onboard your business as a client but also accept multi-currency payments (settlements) from Stripe and PayPal.
Moreover, if you are selling in several different currencies, you’d like to be settled in original currency instead of Stripe and PayPal converting them to your base currency for a high fee.
Many traditional and digital banks are able to go down in FX fees, therefore you might end up saving a bunch.
If you would like to get an up to date list of digital banks that are able to collect payments (settlements) from Stripe and PayPal, and have are cost efficient, fill out contact form and we will send it to you by email.
Step by Step Guide to Opening a Bank Account
Opening a bank account online involves several steps, starting with completing an application, which might require to upload an initial stack of company documents, identify the owners and directors, do selfies and so on.
Below is a simplified list of the most commonly required documents:
- Company incorporation documents
- An organization chart showing ownership structure
- Identification for all ultimate beneficial owners (UBOs)
- Proof of trading address, such as a recent bank statement or utility bill
- Brief description of the business's activities
- VAT registration, if applicable
Upon submission of the account opening application, the bank will conduct a due diligence checks. Once approved, you'll deposit an initial amount to activate the account. The entire process can vary from bank to bank but expect it to take a from several days to a week.
Linking Your Bank Account with Stripe and PayPal
With your bank account open, the next step is linking it to your Stripe and PayPal accounts. This process typically involves entering your bank account details on each platform and verifying small test transactions. Ensure all information is accurate to avoid delays. Once verified, you can start receiving payments directly to your bank account.
Managing Your Accounts
Effective management of your bank and payment processing accounts is vital. Regularly monitor transactions and be on the lookout for any discrepancies or unauthorized charges. Both Stripe and PayPal offer tools for reviewing transactions and managing disputes, which can be invaluable for maintaining your account's health.
When it comes to managing your bank account, make sure you have contact details of your personal relationship manager. Sometimes it is much quicker to get assistance from RM rather than calling directly to support line.
Moreover, we highly recommend to enable email notifications, so that you are always on top of your settlements from Stripe and PayPal.
Great Addition to Stripe and PayPal: Crypto Gateway
As digital currencies gain traction, crypto payment gateways emerge as a compelling alternative to traditional processors like Stripe and PayPal. These gateways allow customers to pay with cryptocurrencies, offering lower fees, enhanced privacy, and access to a global customer base without currency conversion hassles.
Incorporating a crypto payment option can diversify your payment ecosystem and tap into the growing market of crypto users. If you would like to explore such option, send us an email and we will put you in touch with modern crypto payment gateways and banking providers.
Conclusion
Opening a bank account for receiving payments from Stripe and PayPal is a strategic move that can enhance your business's operational efficiency. By following the steps outlined in this guide, you'll be well-equipped to manage your finances effectively.