The era of digital transformation is impossible without fintech progress and innovations in the payment sector. Let’s take a closer look at the payment companies and compare these structures with the banking system and its regulations.
With the development of the fintech sector and changes in the legislation in many countries, more often people can find financial companies that offer certain banking products. The fast progress of e-commerce has been driving demand for various payment solutions. That is why modern consumers of financial services prefer bank account alternatives on a more frequent basis.
Innovative technologies and out-of-the-box tech solutions are available not only to large banks now. Many startups implement AI-based algorithms, payment systems for risk-free transactions. Moreover, software and service innovations offered by today’s payment companies often are much better than similar process solutions provided by traditional banks.
Is it really possible to open an account in a payment system and use it the same way as in the regular bank now? The answer is obvious, and even more. You will receive the best service and the best product if you decide to count on the account in the payment company. This is the alternative to bank-based transactions and asset management.
Having opened an account in the payment system, the customers have an opportunity to get the payment instructions, assist their clients and partners with transactions, make secure payments, and keep their funds in the most comfortable way, without using regular banking services. If the seller and the buyer have accounts in the same payment system, such options as crediting will become instant and free or almost free.
To open business accounts in the payment companies based in Europe:
Secure SEPA transfers that are available in the payment systems will help you handle even your most complex banking needs.
The process of opening an account in a payment system is usually similar to opening a regular bank account. It is necessary to fill-in questionnaires (records, forms, etc.), provide personal documents and a description of financial and business activities. Access to the system can be assigned right away, but full activation usually takes some time to verify all documents. Note that unlike banks, this verification time is usually much shorter and a personal visit is not required.
Let’s divide all the benefits into categories. The key advantages are well seen drawing on the example of operating costs. Speed of transactions, security measures.
Operating costs
Transaction Speed
Financial Security
When it comes to IT security, digital payment companies offer the same level of security as many banks. Due to the size and complexity of various banking systems, payment companies can apply new security solutions faster than a bank. Banks use many systems for different purposes. But it is worth noting that some of these tech solutions for banking establishments were designed 20 years ago.
In terms of liquidity, payment systems also benefit, since the legislation severely restricts payment systems in the ability to use clients» money. This means that if you have funds in the payment system, then your assets are kept in a separate account with the bank. The individuals» financial active assets and savings are available to account holders at any time. These assets are not lent to anyone, having placed on a deposit or in securities and other risky assets.
Speaking about the licensing aspect, all developed countries have special legislation governing the operation of payment systems. They are supervised and controlled by the same institutions as banks. To sum up, the payment companies are notable for:
Payment systems will become popular among individuals and legal entities soon. They will not replace baning structures but are going to make small routine transactions more accessible for customers. At the same time, banks are not going to update their cybersecurity software and financial services too often. It means that asset management options and approach to the account holders» funds are better in the payment companies.
To sum up, it is rather reasonable to open an account and use the special-purpose payment system. The account holder receives a payment card or virtual card, linking these cards to Apple Pay or Google Wallet. If you are interested in the best alternative to the EU bank account, contact us and stay pleased with your financial flexibility and freedom.
