What payment systems should an IT business choose?

Today, in the era of global digitalization, the prevalence of activities that can be carried out “remotely”, IT business has become one of the most widespread and profitable spheres, for the full functioning of which not only legalization in the form of the creation of a separate structure (company) in the appropriate jurisdiction is required but also opening a corporate account for transactions: receiving royalties for computer programs, making settlements with developers, testers, receiving payments from customers, etc.

At the same time, taking into account the fact that the IT sphere is mostly completely or partially carried out remotely, it is currently quite problematic to open a so-called “traditional” bank account for such a company. First of all, this is related to the requirements of the bank KYC procedure, according to which the founders (shareholders) of the company need to prove the presence of “substance” (physical presence) both in the country of incorporation of the company and in the jurisdiction of the banking institution, in particular, the involvement of employees to carry out activities, local customers/contractors, renting a real office, etc. However, taking into account the specifics of IT activities, these circumstances are quite difficult to prove.

In view of the above, payment systems as an alternative to the possibility of running an IT business are an option solution to such a problem.

Advantages of using payment systems for IT activities

Payment System (EMI) — is a company that has a license to issue electronic money. Compared to traditional banks, EMIs have many advantages, especially for the IT sector, including:

• usually, they do not have a real office intended for customers to visit (departments, branches), in connection with which account opening is carried out completely remotely;
• their compliance policy (KYC, AML) is not so strict compared to the requirements that are defined for banks, including in the context of the need to ensure the substance of the company;
• they provide the necessary range of services for the proper functioning of the business: multi-currency IBAN or individual details in various currencies; the possibility of issuing cards (both virtual and physical); convenient internet banking, etc.;
• they usually open accounts faster compared to banking institutions. It is understood that each payment system has its own standards and policies in the context of making a positive decision regarding the approval of the opening of an account. However, in practice, if there are no questions or additional requests to the package of documents provided by the company, the decision to provide details can be made within a week;
• they are usually aimed at creating more functional platforms for managing funds, which is manifested both in the appearance of the personal account and in the possibility of obtaining related services (for example, the quick generation of bank statements in various formats, obtaining company account details in the form of a certificate for free, etc.).

Overview of payment systems for IT business

Azola Legal Services lawyers have made a selection of payment systems that you can consider when opening a corporate account for an IT company.

1. Unlimint (Cyprus) is a payment system aimed at corporate clients operating in software, SaaS and, the Internet, online games, and other innovations. It provides multi-currency IBAN and the ability to receive physical and virtual Visa, Mastercard, and UnionPay cards.
2. Payoneer (USA) is a payment system that is primarily created for clients involved in the field of digital content, IT activities, and e-commerce, currently expanding the types of corporate areas for which it opens accounts. Among the options that will be important for the IT business, the following can be distinguished: Payoneer offers individual account details in USD, EUR, GBP, and other currencies; there are no geographic restrictions on transferring USD around the world; there is an option to connect API integration for payments; there is an opportunity to receive reduced commissions and a personal manager upon reaching certain turnovers.
3. Transferra (England) – a payment system offering a multi-currency account in 88 currencies, including USD, EUR, CAD, PLN, etc ; considers the possibility of opening an account for high-risk areas: holdings, crypto-, and gambling – activities that can be implemented by IT companies in one way or another; a functional feature of a business account is the option of assigning roles in its management (account manager, accountant).
4. Bilderlings (England) – payment system providing multi-currency IBAN; serves customers with high-risk -activities, in particular, they can consider IT business related to the development of crypto-games, skill-based games games); offer receipt and use of virtual and physical MasterCard cards.
5. Bankera (Lithuania) – a payment system focused on digital business, including the one belonging to high-risk activities (in particular, cryptocurrency). Bankera has no limits on incoming transfers; it is possible to obtain a physical and/or virtual Visa card. The exception is the jurisdiction of the USA and sanctioned countries for which the specified payment system does not offer services.
6. Emerald24 (England) is a payment system that offers a multi-currency IBAN account. After opening a corporate account, a personal manager is appointed. Emerald24 provides the ability to connect API integration for payouts; making payments through the TARGET2, SEPA, SWIFT systems; opening merchant accounts for medium and high-risk activities (crypto, gambling, etc.).
7. Paysera (Lithuania) is a payment system that provides multi-currency IBAN in more than 30 currencies. The Paysera account can be used to pay for the authorized capital of companies registered in the Baltic countries. Provides the option of API integration, as well as the connection of the payment gateway to Internet platforms. To open a corporate account at Paysera, you must first open a personal account for a representative (director) of the company.

Completion of compliance for IT companies

The presence of an IT company and the selection of one of the above-mentioned payment systems does not automatically indicate a positive decision to open an account. The IT sphere in the context of compliance procedures when opening accounts in banks or payment systems, in general, refers to high-risk types of activities. Therefore, to successfully complete the KYC procedure, you must prepare in advance: develop a corporate website or landing page; to form the necessary package of documents related to the company’s economic activities with counterparties, in particular invoices for the provision of software development services, SOWs, MSAs; draw up a business plan or a detailed description of the company’s activities; collect documents confirming the company’s sources of funding (for example, if the company is newly established, such data can be UBO income certificates, statements from the bank accounts of the final beneficiary, which contain information on the amounts and sources of funds), etc.

There are many “Pitfalls” that may arise when opening an account in the payment system, so we advise you to contact lawyers. Lawyers will be able to analyze the available documents, select the most relevant payment systems for your case, formulate their recommendations, and identify risk areas and methods of their elimination or minimization, which will potentially be important during the compliance procedure. Lawyers of the Azola Legal Services company will be happy to assist you and answer your questions.