Starting a business in a crypto industry is exciting. It’s a fast-growing industry with many hungry people looking for new solutions and services. It’s also an industry with a lot of uncertainties, starting with half-baked or completely lacking regulations in most jurisdictions, to advertisement restrictions and banking problems. Not to mention that crypto is threatening the source of power of current incumbents. Hence, starting a crypto business needs careful planning and thinking on things you wouldn’t need to think about otherwise.
Through planning you can map-out crypto friendly jurisdictions (like Estonia), and when choosing the jurisdiction you at least will have a pretty clear set of documents you have to provide and requirements to comply with in order to obtain the required licenses (if the business requires licensing). It’s not so clear with banking, as with banks, you can’t often understand the decision-making process (and banks don’t provide any explanations if you get rejected), most banks will reject you outright due to your involvement with cryptos, and so forth. It can be a pretty frustrating journey to getting banked as a crypto company.
What are your options? It depends on your background, nationality, jurisdiction of the company and whether you have obtained any licenses, and of course, your AML policies. Still, 95% of banks and fintechs reject your business due to your risk-profile.
One word: research. Putting in hours to find, review and contact different banks and online banks. It’s not only about opening a bank account, it’s also about the associated fees - if your business model depends on the transaction fees, then you need to have competitive terms from your banking partner. Otherwise it’s difficult to compete.
Another option is BankApply. BankApply has done the research for you, and continues to upgrade its unique Matching Engine, which matches your profile with suitable banks and fintechs. Imagine hiring a person to your crypto business who only works on finding banking options. Doesn’t sound like a very good investment, but that’s exactly what BankApply does - they have two people working on finding and interviewing banks every day. This is also the reason why BankApply has more than 20 crypto-friendly banks and online banks in the system.
There are couple of things to look at - background, flexibility, fee-structure, usability.
There are more experienced but less flexible banking providers you can work with. There are newer players who are looking to increase their client-base, who are more personal and open to work out good terms. The downside is that they haven’t proven themselves and you never know how long their new fintech will stay on the market. Sometimes you don’t even have an option to choose, but have to start with what you can get. However, getting started with what you can get is better than not starting at all.
Flexibility of the banking provider is super important for crypto companies and startups. Fintechs are far more flexible compared to conventional banks. The flexibility of the banking providers also depend on your plans, whether you’re funded, have already made some name to your crypto business, and so forth. Everybody is interested in a good business deal, and if you can bring volume, you have more power to negotiate. Flexibility also means flexibility of services and features, custom solutions, and being able to manage SWIFT payments.
As opening a bank account has become a big deal and an important decision, there are several things that you have to look at before trusting anyone with handling your fiat-money flows. We recommend to google the name of the fintech or the bank to find recent news, check LinkedIn and see how many employees and who are working for the company, google the names involved with the company (if you have doubts), and check where the fintech is licensed. You can find good information from forums and social media if people have had some negative experiences with the banking providers. Analyse the information you gather with a rational mind, however - the bigger the company and its client base, the more likelier it is that there are some unsatisfied clients.
As written above, you need to find a bank account / fintech account with competitive pricing structure. We recommend to read our article about which fees to check by clicking here.
Some fintechs and banks have more features than others. Some of them can handle mass-deposits / bundle payments, and some can’t. Depending on your business, some of these features can be vital for your operations. Some legacy banks have the worst internet banking capabilities. Crypto is future, crypto is novel - you don’t want to call to a bank to ask for money transfers, because the internet banking is “read-only”. You want a mobile app or a smooth UX and dashboard at minimum.
Last but not least, get in touch with as many banks & fintechs as you can (or use BankApply ApplyNow Portal), and see how their customer supports replies and handles your requests. For example, with Finnish fintech Holvi, some Estonian e-residents reported that they couldn’t get a reply from Holvi within one month! That’s simply not acceptable.
Banking seems like a trivial matter when you start a business, but unfortunately, it’s not. It deserves the time it needs to make a good decision, as you don’t want to be left in cold at one day without being able to transact when your business is in full-speed and growing. It can completely paralyze your business. Register with BankApply today to unlock your banking opportunities and make the right banking decisions.