Reviews of Banks & Financial Institutions

With so many financial institutions to choose from, it can be hard to know who to trust. Money-Gate ever-growing list of bank reviews is updated regularly

Valyuz is a leading electronic money institution registered and regulated in Lithuania and in Europe....

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A fully mobile banking experience, tailored to your needs We're a fully fledged bank, meaning...

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Everything you need for effortless spend management - Prepaid company cards, Simplified reporting, mobile app,...

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Barclays plc is a British multinational universal bank, headquartered in London, England. Barclays operates as...

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Opening a business bank account in Europe

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61

Opening a business bank account in Europe

GBO is a leading corporate services company that provides comprehensive support to companies looking to open bank accounts.

With extensive experience and a deep understanding of the banking industry, GBO is well-equipped to guide companies through the complex process of opening a bank account, from gathering the necessary documentation to negotiating the best terms and conditions. Whether a company is based in Europe or is a foreign company looking to expand into the region, GBO’s expert team is dedicated to helping companies establish a strong financial foundation for their operations. With its commitment to quality and customer satisfaction, GBO is the ideal partner for companies looking to open a bank account in Europe.

We will assist you to open business bank account in Europe

WhatsApp or Telegram us: +972504938469, email us: info@gbo-il.com

    All businesses need a corporate bank account in order to receive payments from customers; make payments to suppliers and track their finances. For online businesses it can be challenging to find a bank willing to take you on as a new client. Online businesses that often encounter difficulty when applying for a business account include gaming companies; online affiliate companies and ecommerce businesses in general. Although the process may be complex it is possible for online companies to find banks willing to offer them a business account. Bear in mind that requirements and policies differ from bank to bank and the process can be frustrating.

    Opening a business bank account in Europe for a European and foreign company

    The opening of a business bank account is a crucial step for businesses seeking to establish operations in Europe. The process of opening a business bank account can be complex and involve a variety of requirements and considerations, regardless of whether a company is based in Europe or a foreign company seeking to expand into the region. This study will investigate the procedure for opening a business bank account in Europe for both European and non-European businesses.

     

    Requirements of a business bank account for European companies:

    When opening a business bank account, European companies incorporated within the European Union (EU) are typically subject to fewer requirements than foreign companies. Among the most important requirements that European companies must meet are:

    1. Documents relating to business registration and incorporation.
    2. Documents of identification for business owners and authorized signatories.
    3. Address verification for the business and its owners.
    4. Details about the organization’s structure and ownership.
    5. An initial deposit or minimum balance requirement

     

    Requirements of a business bank account for foreign Companies:

    Foreign businesses seeking to open a business bank account in Europe may be subject to additional requirements not imposed on European businesses. Some of these prerequisites could include:

    1. Evidence of the company’s registration and incorporation in its home nation.
    2. Evidence of business operations in Europe.
    3. A local agent or representative who can represent the company in Europe.
    4. Additional documentation to demonstrate the company’s financial stability.

     

    Important Considerations for All Businesses:

    Regardless of whether a company is European or international, there are a number of important factors to consider when selecting a bank for a business bank account. These consist of:

    • Location:
      Different banks have different fees and charges for business accounts, so it is essential to compare them thoroughly before making a choice.
    • Businesses may have specific requirements for services such as online banking, check writing, or credit card processing; therefore, it is essential to select a bank that provides the necessary services and features.
    • Reputation and steadfastness: The safety and stability of a bank is a crucial factor, particularly for businesses that will be storing large sums of money in their accounts.

     

    By understanding the requirements and key considerations involved in opening a business bank account in Europe, businesses can make informed decisions about which bank to select and ensure that their finances are optimally managed. Whether a company is European or international, thorough research and preparation are required to ensure a successful process. Companies seeking to open a business bank account in Europe have numerous options, and by taking the time to find the right bank, they can establish a solid financial base for their operations in the region.

    Which business bank account in Europe is the best?

    The most important features of your business model can have a strong influence on what services the bank you choose must offer. Firstly, the spread of activities makes a huge difference. If you are dealing only with people and other businesses resident inside a single country, or in the case of the EU, inside the Euro bloc, then currencies are not a concern. In simple terms, the best business account should be offering most if not all of the following features:

     

    • Charges minimum or preferably no service fees, at least for a starting period of 12-18 months
    • Allows for linkages between accounts, so that deposit accounts can automatically be used to offset short-term overdrafts without invoking penalty rates
    • Does not impose limits on transaction volume
    • Gives full access to all aspects of the account at branches, online through mobile and computer apps, and ATMs

    What makes a good business bank account?

    Apply here for a Business Bank Account in Europe

    The things to consider when deciding what makes a good business bank account must start with the essential banking services you need to conduct every aspect of your business. This should cover the full range of transactions with customers, dealings with suppliers, payrolls, and accounting properly for all movements. Check also that the chosen bank can offer movement and accounting in all the possible currencies from international sources. If your business involves accepting credit card payments make sure you get full merchant services. As the business grows, when cash-flow management becomes an important strategy, the right bank account can help by allowing you to get paid faster, and holding onto cash longer. The right bank account  can help you get more out of your business!

    How many business bank accounts should I have?

    The decision of how many accounts, or even whether you should have multiple accounts, requires a balance between the pros and cons. On the plus side, multiple accounts help you to keep organized, by using the different bank accounts to serve various business needs. E.G. one account can handle incoming funds from customers, another to track routine business expenses, and a third to handle business credit card payments. Separate accounts like these can give you a clear picture of where you  stand in terms of day-to-day business as well as your long term goals.

    Over time, you may need additional financing and having a proven track record of managing your finances responsibly can help. Most lenders require disclosure of detailed records of your finances, so a full picture of healthy account management helps to establish your creditworthiness.

    If you have business credit card or debit card accounts, separating all tracking off into discrete accounts will keep them secure.

    On the other hand, the disadvantages are that multiple accounts require more management effort. You or someone in management must pay close attention to them all. If supervision becomes lax, there is risk of one or more accounts slipping into overdraft, where charges can be expensive. Although not every bank will do this, some may levy individual account fees on each one, rather than a ‘universal’ fee for the whole company. This is something that should be clarified when choosing the bank.b

    Which is the easiest bank to open a business account?

    Setting up a corporate account in a bank can be a complex process especially if you reside in a different country. Each country can have different and difficult procedures. The simplest approach, when choosing which is the easiest bank to open a business account in European countries, is to consider setting up a multi-currency business bank account with one of the many new EMI and Fintech services. Look for an account that enables multi-currency balances, fund transfers, IBAN account identification and making payments internationally. When standard banking services are offered, this makes the process of trading within European countries much simpler.

    Another thing worth considering is to engage with a reputable agent to handle the set-up process.

    With our knowledge and experience here at GBO, we have helped many customers navigate through the complexities of finding a suitable bank, ensuring that you can operate simply and effectively.

    Easiest countries to open a bank account

    There are some important features to check when you are looking to find the easiest country to open a bank account. Many countries only facilitate opening new accounts online to citizens or residents, and require special conditions for others. This makes a bank in the EU a particularly good option for the 550+ million people living there. You will automatically be able, as a resident, to open a new account online, giving you the option to open a bank account – personal and even a business – in any European Union country. This is a great feature for people looking to pay bills, transfer money or receive payments in Europe. 

    As an EU resident, the way to find the easiest European country to open a bank account is to look for the ones that already have the best accessibility in terms of overall on-line banking facilities. Probably the most important thing to look for is the general quality of network service, where high-speed connection is essential, backed up by 24/7/365 support. Of increasing importance is the quality of the bank’s mobile service, in terms of the range of features offered, the extent of network coverage, and the quality of the mobile applications.

     

    There generally is no difference inside the EU when you are looking to find the easiest countries to open a bank account. Banks cannot refuse to open a basic payment account for residents in any EU country regardless of where the bank is registered. This does not apply to other types of bank accounts, such as savings accounts, or if you already have a similar account with another bank in the same country. Such an account offers standard features such as making deposits, withdrawing cash and receiving and carrying out payments like direct debits and card purchases. Finding a bank that offers an overdraft or credit facility is a good plus.

     

    There are many different aspects that need to be investigated if you are looking to find the easiest country to open a business bank account in Europe. In the first case, there are three different types of banking entities: traditional banks, digital banks offering EMI and Fintech services that don’t have banking licenses, and licensed EMI/Fintech operators. One essential feature that differentiates between banks when it comes to choosing for a business account is whether the bank offers the full range of features, especially IBAN account identification, particularly focusing on whether sub-IBAN account identification is allowed. This feature simplifies money management for businesses tremendously.

    Points to Consider when Choosing an International Corporate Bank Account

    • What currencies can the account hold and transfer?
    • Can the account be used to send and receive transfers to the jurisdictions where your customers and suppliers are located?
    • What are the fees and charges that apply for the businesses account?
    • With your chosen account what level of customer service will be available to you?
    •  Can you access your corporate bank account remotely – is there mobile banking?
    • Can you have multiple signing rights for your chosen account?
    • Does the business account come with cards you can use to pay suppliers or employees?

    The best features of EMIs

    One of the best features being offered by some of the more advanced EMI financial services companies is to create a “virtual business bank account”, where the actual home country of the bank doesn’t affect how transactions happen. Multiple currency accounts and transparent money movement happens regardless of the incoming or outgoing currency or source, as if you have a local bank account in each case. This makes management of even the most complex business model much simpler. Here at GBO, we have worked with several of these advanced service providers and can help you find the most suitable home for your business.

    Choose Your Business Bank Account Well

    What can your bank do for you and what services and financial products are vital for your business? Decide on the must-have banking services you need and check that your chosen bank can supply you with these services; for example, will you be able to receive payments from the jurisdictions where your clients are located; will you need currency conversion, debit cards, multiple signature rights etc. You will need to pay some of your suppliers online or you may need an account where multiple company employees can make transfers. Do you need an account that can receive multiple currencies from international clients? What kind of business account will you need and does your chosen bank give you options? Before beginning the application process decide what you want from your bank.

    Processes Involved in Applying and Opening an International Business Bank Account

    Among the many documents you will be required to produce to open an international business bank account:

    • Articles of Association
    • List of shareholder and their details
    • List of directors and their details
    • Certificate of company registration
    • You may also need a business plan; details of your management staff and financial reports as well as any other document the bank sees fit to ask for.
    • Banks may ask you who your main customers and suppliers are; their locations; your monthly turnover; main currencies you intend to bank; physical street address of your company etc.

    It is important to find out what documents your bank requires for the onboarding process so that you don’t waste time and a trip to the bank just to discover you are missing one vital document. Ask exactly what the bank requires as each bank has its own policies and requirements for new business accounts.

    Opening an International Corporate Bank Account – Challenges, Options and Solutions

    Opening a business account is different to opening a personal account; starting from the onboarding process which is more complex and requires that you produce more documents. Opening an international business bank account is also very different from opening a local business account. Choose the bank that can supply you with all the services and financial products your company needs now and in the future. Find out in detail what documents are required for onboarding. Prepare your documents thoroughly before you apply for your new international online business account. If you want advice on choosing the best international corporate bank account for your business feel free to contact us.

    What Do I Need to Open a Business Bank Account?

    Each bank has its own policies and requirements for new business accounts. Ask exactly what
    the bank requires as the first step in the process. Generally, among the many documents you
    need to open a business bank account are:

      1. Articles of Association
      2. List of shareholder and their details
      3. List of directors and their details
      4. Certificate of company registration

    You may also need a business plan, with details of your management, staff and reports of any
    pre-existing trading and banking. If it is a new business with no trading history, the bank may
    require more information and documentation about the shareholders and senior executives,
    and details of their personal bank accounts and other business holdings. In general, the bank
    may see fit to ask for any other documents considered relevant.

    For existing businesses, the bank may require details of customers and suppliers, historical
    turnover, main currencies you intend to bank and the location of the company’s operations.
    Corporate bank account requirements are very different from opening a private account.
    Choose the bank that can supply you with all the services and financial products your company
    needs now and in the future, with a clear cost structure than will not escalate as the volume of
    transactions grows.

    Many banks offer “sweet” deals with low charges in the beginning to entice
    new business, but once the period of grace expires, the level of fees and charges can be
    inordinately high.

    Top 50 Banks In The World

    Lists of the top banks in the world will come up with differing names, depending on whether you use assets, revenue, market capitalization, size of customer base or any one of the many other reference points that can measure the relative sizes to grade them. As a result, these usually come up with different results. As well, some banks use reporting methods that have to conform with their own countries’ regulations and so use a different basis for reporting.

    Please contact us for opening a business account in Europe

    WhatsApp or Telegram us: +972504938469, email us: info@gbo-il.com

      Please click & visit the best payments solutions for companies:

      Visit Wallester

      Top 50 Banks in the world (by Country)

      Top 50 Banks in the world (by Country)1

      Most of the listings of banks do not report the top 50 banks in the world by revenue, but rather list the banks by assets or by market capitalization. It requires purchased research from investment advisors to get this information. Three rating agencies Moody’s, Standard & Poor, and Fitch report regularly with the universal reporting system.

       

      To rank the top 50 banks in the world by market cap will give the most reliable answer because this is a public and real measure, but it will leave out operating banks that are not themselves quoted on a stock exchange but are wholly-owned subsidiaries either of a parent financial institution or of a private entity.

       

       

      Of the 50 top banks in the world by market capitalization, 11 are located in the USA, headed by JPMorgan Chase, which is the largest bank in the world in this ranking. Next on the list is mainland China with 9 banks, headed by Industrial & Commercial Bank, which is number two on the global list.

      Here is a quick look at the top 10 banks in the world:

      To rank the top 10 banks in the world by assets, analysts usually measure the bank’s net asset value, which means deducting outstanding debt and borrowing from the assets owned.

       

      Coming in at the top 10 banks are:

       

      1. Industrial and Commercial Bank of China, China
      2. China Construction Bank, China
      3. Agricultural Bank of China, China
      4. Bank of China, China
      5. Mitsubishi UFJ Financial Group, Japan

      6. HSBC, UK
      7. JPMorgan Chase, USA
      8. Bank of America, USA
      9. BNP Paribas, France
      10. Crédit Agricole, France

       

      For an interactive spreadsheet of the top banks in the world take a look below

      There are a few reasons why top banks are often considered to be the best 50 in the world:

      1. Financial stability: Top banks tend to be more financially stable than smaller banks or financial institutions. This is because they have larger asset bases and a more diverse range of financial products and services, which can help to mitigate risks.
      2. Customer service: Top banks generally have a reputation for providing good customer service. This can include things like having a large network of branches and ATMs, as well as offering online and mobile banking services.
      3. Range of products and services: Top banks typically offer a wide range of financial products and services, including checking and savings accounts, loans, credit cards, investment products, and insurance. This can make it easier for customers to manage all of their financial needs in one place.
      4. Convenience: Many top banks have a strong online presence, which makes it easy for customers to access their accounts and perform financial transactions from anywhere.

      Overall, top banks tend to be well-regarded because they offer a combination of financial stability, good customer service, a wide range of products and services, and convenience.

      It is difficult to determine the “best” banks in the world, as different banks excel in different areas and may be the best option for different individuals or businesses. Some factors that could be considered when determining the best bank for a particular person or business include the bank’s financial stability, customer service, fees, convenience, and the range of products and services offered. It is also important to consider whether the bank aligns with your values and meets your specific financial needs.

       

      Some banks that are often considered to be among the top in the world include JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs, which are all large, global banks with a strong presence in many countries. However, it is important to do your own research and consider the specific needs and priorities of your individual or business before choosing a bank

      To measure how rich a bank is, analysts usually measure the bank’s net asset value, which means deducting outstanding debt and borrowing from the assets owned. In this method, the top 5 richest banks in the world, leaving off the same four Chinese banks, list three from Japan and one each from USA and France. This is largely because Japanese banks are highly structured and very conservative.

       

      Before the start of the COVID-19 pandemic, there were indications that the world economy was going to grow by around 2.5%, and banks generally would be growing at that rate or slightly faster. However, the drastic effects of the pandemic have made it extremely unlikely that there will be any growth at all, and have also made it very difficult to predict which banks will survive the downgrading better than others.

      The only way to attempt is to consider which countries were performing best, like Taiwan, Japan and Australia, compared to the worst affected, like most of Europe, USA, Brazil and Mexico. It is expected that the medium and long-term effects of the pandemic will show up over the next 18 months and share prices generally will show the results.

       

       

      In one of the best analyses of the likely outcome of the pandemic on the top banks in the world, Forbes analysis Anton Guera has written a comprehensive report. His bottom line is that “Potential threats to all banks on the Forbes Global 2000 come from the looming crunch in business activity and spiking distress worldwide.”

       

      Investment Banks

      Investment banks operate in a special sector of the finance industry, offering management of client’s money rather than commercial activities. Due to the massive size of the US economy, all five of the top 5 investment banks in the world are American. If the rest of the world is ranked without the USA, then Switzerland with three is the largest followed by Japan, France, UK and Canada with two each.

       

      Commercial Banks

      Commercial banks offer private and corporate customers the full range of services, such as checking accounts, mortgages and loans, deposit accounts and so on. The top 5 commercial banks in North America include four in the USA and one Canadian. In Europe, the UK, Germany and France share the top 5 commercial banks for now, but Brexit may change this as several larger banks are considering moving into the EU from London.

       

      Want to know more about the richest banks in the world? Click HERE

      Here is a list of some famous banks in various countries:

      • United States: JPMorgan Chase, Wells Fargo
      • United Kingdom: HSBC, Barclays
      • China: Industrial and Commercial Bank of China (ICBC), China Construction Bank
      • Japan: Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group
      • Germany: Deutsche Bank, Commerzbank
      • France: BNP Paribas, Crédit Agricole
      • Canada: Royal Bank of Canada, TD Bank
      • Australia: Commonwealth Bank, Westpac
      • Brazil: Banco do Brasil, Itaú Unibanco
      • India: State Bank of India, HDFC Bank

       

      The criteria used to identify a “famous” bank might change and may take into account a variety of elements, including:

      • Brand name: Due to the high level of public awareness that comes with powerful and distinctive brand names, banks may be deemed more well-known.
      • Revenue: Due to their stability and performance in the financial world, banks with large revenue may be regarded as famous.
      • Sponsorship: Due to their increased presence in the public eye, banks that support prominent events or organizations may be thought of being more famous.
      • Number of employees: Due to their size and scope, banks with a large staff base may be more well-known.
      • Market share: Due to their dominance of the local financial industry, banks with a sizable market share in a nation or region may be deemed more well-known.
      • Innovation: Due to the perceived value they provide to their consumers, banks that offer distinctive products and services or implement cutting-edge technologies may be more well-known.
      • Public perception: Banks with a good public image and reputation may be seen as more well-known than others.

       

      Transferwise vs n26

      Two of the most popular and successful new online banking services are Transferwise and N26. In many respects, they offer similar features, since N26 uses TransferWise for their customers’ international money transfers.  N26 now has nearly 6 million users, and Transferwise is the leading UK-based bank with more than 9 million users who conduct over £4 billion in transfers each month as reported in the last quarter of 2020, putting both on the fast growth track.

      One important difference is for residents of the UK. N26 has decided to pull out of that market, concentrating on Europe and growing into the US. So if you are looking for a bank to handle your finance, how to decide between Transferwise vs N26 should take this into account. We are here to help you make the right decision based on your own needs.

       

      GBO can help you identify the most suitable business bank for your company, contact us

        Before dealing with the advantages of choosing either Transferwise or N26, consider the following table of features of N26 vs Transferwise showing common features and main differences as we summarize here:

        Feature:
        Revolut difference:
        n26 difference:
        Multiple debit cards
        options for multiple debit cards for each account - besides the physical card, you can create up to 5 virtual cards
        only allows one card per account with max. 2 sub-accounts (N26 Spaces)
        Account top-up charges
        Free by linking the main bank's debit card to the Revolut account and transferring with the app. Also can lodge money by a regular bank transfer from another account using IBAN and BIC.
        Only the first top-up is free, then there's a 3% fee every time.
        account options
        Choice of 3 levels (Standard, Metal, Premium)
        Choice of 3
        ATM Withdrawal
        Free to withdraw €200 a month then a 2% fee per withdrawal
        Three free withdrawals per month then €2 charge per withdrawal.
        Access to cryptocurrencies
        Supports Bitcoin and cryptocurrency
        N/A
        Supports international transfers
        Transfer to 29 currencies with a 0.5% fee for anything above £5000 each month plus a flat markup on weekends and in certain currencies
        Only via Transferwise - 0.35% - 2.85% depending on the currency
        Commission on card transactions in a foreign currency up to two percent of the amount spent nil
        Commission on card transactions in a foreign currency up to two percent of the amount spent nil
        N/A
        Type of debit card
        offers both Mastercard and Visa
        only offers Mastercard
        Transferring money to other accounts
        to other accounts in the same country is free. 50 cent fee for non-euro transfers e.g. sending sterling to a bank in the UK.
        Free up to a limit of €1,000 a month - after that 0.5% fee.
        Exchange conversion rates
        Uses Interbank exchange rate with a 1% markup at weekends
        applies the Mastercard exchange rate at all times
        App language availability
        20 languages. Customer support available in English and Polish
        5 languages. Customer support available in English, French, Spanish, German and Italian.
        Multi-currency balance
        24 currencies
        GBP or EUR only
        Withdrawing cash abroad
        withdraw the equivalent of €200 a month free, then 2% fee
        Charges a 1.7% fee
        Banking license advantages
        has a UK banking license, important for business customers in Great Britain.
        Has a German banking license, important for business customers in the EU.
        Unique features
        Can set up recurring payments and direct debit payments to pay for your bills or purchases
        Offer features like overdrafts, interest on savings accounts and other functions similar to normal banks (Germany & Austria only)
        Interest on savings
        UK accounts only - 1.35% protected by FSCS up to £85,000 Euro
        accounts - up to 1.57% protected up to €100,000
        Access portals
        Mobile only
        Mobile and desktop
        Funds top-up methods
        Bank transfers, debit/credit card top-up
        Cash (DE, IT, AT), bank transfer
        Direct debit currencies
        EUR only
        EUR & GBP

        Overall, there is no clear winner in the competition of Transferwise vs. N26. Each one has shared general features that are basic to everyone’s requirements, and both are good choices. Making the difference would be things that are particular to your own specific requirements.

        Differences Electronic Transfers, Telegraphic, Wire & IBAN transfers?

        What’s The Difference Between Electronic Transfers, Telegraphic Transfers, Wire Transfers and IBAN transfers?

        Welcome to our study comparing traditional banks to online financial organizations. In this study, we will examine the various financial institutions that are available to consumers in more detail and contrast the services, costs, and interest rates provided by conventional banks and electronic financial institutions. To assist you in picking a financial institution, we will also be examining the advantages and disadvantages of each type of institution. Our mission is to give you a thorough grasp of the situation of the banking business today and to assist you in choosing the institution that will best meet your financial needs.

         

        The GBO team will be happy to assist you to open your business bank account through our wide network of banks, payment processors, and financial institutions

          The terms used to describe different methods of moving money from one account to another can be confusing. There are electronic, telegraphic, wire and IBAN transfers. So is there a difference and if so what is it? Most of the confusion comes from the fact that the terms are used interchangeably and that they are all quite similar.

           

          What is an Electronic Transfer?

          Electronic Money Transfers or Electronic Fund Transfers (EFT) are used to move money from one bank account to another via a computer system without direct human intervention. The transfer can be initiated from an electronic terminal such as an ATM, credit card or point-of-sale.  In the U.S. electronic transfers are processed through the Automated Clearing House (ACH).

           

          An EFT can be made between accounts held at the same bank or across banking networks anywhere in the world. Electronic Money Transfers are known by different names and are sometimes called a direct deposit. Direct deposit is the term used for an EFT that deposits your salary directly in your bank account.

           

          EFTs can be used to credit funds to an account such as payroll payments and to debit funds from an account like with a mortgage payment. When you make a payment or purchase using your credit card this is also called an electronic fund transfer.

           

          • Electronic transfer is also called an EFT, bank transfer, direct debit, wire transfer or PIN-debit transaction.EFT is also a broad term used to describe online transactions.
          • Transfer using a computerized network
          • Initiated online, by phone or bank
          • Costs vary but generally low-cost

           

          What is a Telegraphic Transfer?

          A Telegraphic Transfer (TT) or Telex Transfer is an electronic method of moving money using a secure cable network. TT is primarily used when funds are sent internationally although the term is used for U.S. domestic transfers; CHAPS transfers in the U.K.

           

          and international transfers. For U.S. domestic transfers the funds are transferred through the U.S. Federal Reserve System and for international transfers TT usually refers to funds sent using SWIFT (or SEPA in Europe). TT transfers are distinctively fast (2-4 days), regulated and secure but expensive. The delivery time can vary depending on holidays, weekends, currency exchange requirements and the origin and destination. The price can also vary according to any necessary currency exchange; the amount being transferred; the institution used for the transfer and other factors.

           

          Advantages of wire transfer vs bank transfer:

          • Speed: Wire transfers are usually faster than traditional bank transfers, as the funds are transferred electronically and can be processed in real-time.
          • Reliability: Wire transfers are a reliable and secure way to transfer funds, as the process is regulated by federal laws.
          • Convenience: Wire transfers can be initiated from the comfort of your home or office using online banking or by visiting a bank branch.

           

          Disadvantages of wire transfer vs bank transfer:

          • Cost: Wire transfers can be more expensive than bank transfers, as banks may charge a fee for the service.
          • Complexity: Starting a wire transfer can be more difficult than starting a bank transfer since more information and paperwork may be needed.
            Accessibility: Not all banks provide wire transfer services, and some banks could impose limitations on the sums that can be moved or the nations that can receive the transfers.

           

          TT transfers are sometimes referred to as wire transfers or electronic fund transfers.

           

          • Telegraphic transfers are also called telex transfers, TT. Wire transfers or electronic fund transfers.
          • Electronic transfer of funds, usually international, through SWIFT (go to BIC checker), CHAPS or FRS.
          • Expensive; fees are not standardized between institutions and can vary.
          • Fast 2-4 days

           

          What are the main differences between telegraphic transfer vs wire transfer?

          There are several ways to move money between bank accounts. There are, however, some significant differences between the two.

          1. Transfer speed: Telegraphic transfers are frequently quicker than wire transfers. While wire transfers might take up to several days to complete, telegraphic transfers are frequently carried out through an electronic system or a network of correspondent banks and are typically finished in a day or two.
          2. Fees: Compared to wire transfers, telegraph transfers may have greater fees. This is due to the fact that telegraphic transfers are more expensive because they involve several correspondent banks, each of which levies fees.
          3. Conversion of currencies: Telegraphic transfers are frequently used to move funds between different currencies, whilst wire transfers are typically used to move funds within the same currency. Telegraphic transfer might be a better choice if currency conversion is necessary because it offers better exchange rates.
          4. Documentation: Compared to wire transfers, telegraphic transfers typically involve more paperwork. This is so that banks can comply with regulations and prevent money laundering as telegraphic transfers are frequently utilized for large or multinational transactions.
          5. To pay suppliers or receive payment for goods and services, telegraphic transfers are frequently used in business. Contrarily, wire transfers are generally utilized for private transactions like paying rent or sending money to loved ones.

           

          Before making a transfer, it’s wise to verify with your bank for precise information and compare costs, currency rates, and other terms because different banks may have different rules and processes for telegraphic transfer and wire transfers.

          What is a Wire Transfer?

          A Wire Transfer or simply called a bank transfer sends funds electronically from one person to another. The funds can either be sent directly to the receiving person’s account or it can be wired to a cash office where the money can be collected physically.

           

          There are a number of wire transfer systems and operators each with its own advantages and disadvantages – some faster, cheaper and more convenient. A wire transfer is initiated at a bank where you will need to supply the IBAN and BIC of the recipient. The sending bank then transmits a message with the transfer request to the receiving bank via one of the secure wire systems like Swift or Fedwire.

           

          The message contains the order to transfer and settlement instructions. Wire transfers are possible between banks that hold reciprocal accounts or if there is no reciprocal agreement the transfer is sent via a correspondent bank with such an account.

           

          A wire transfer can take several hours or several days. The sending bank charges the sender a fee separate to the amount being sent. The receiving bank will usually deduct a fee from the funds being sent so that the recipient gets less money than was actually sent. If an intermediary bank is involved they will also deduct a fee from the amount sent.

           

          • Wire transfers are also called bank transfers and other synonyms.
          • Delivery 1-2 days
          • Can deliver to a bank account or a cash office.
          • Electronically across a network of banks or transfer agencies.
          • Sender pays fee and fees are deducted from the funds sent to the recipient by the receiving bank and any intermediary banks.

           

          Wire transfer vs bank transfer

          Wire transfers and bank transfers are both methods of moving funds electronically from one account/person to another. In general wire transfers are faster than bank transfers but more expensive and less secure. Bank transfers have the advantage of being cheaper and more secure. Domestic wire transfers are usually received within 24 hours and within 1-5 days for international wire transfers. Bank transfers take up to 4-5 business days. Wire transfers cost the sender about $25-$100 and sometimes an additional fee is charged to receive the funds. Bank transfers are cheaper than wire transfers. Bank transfers are considered safer, and less vulnerable to scams than wire transfers.

           

          What are the main differences between wire transfer vs electronic transfer?

          Electronic transfer and wire transfer are both ways to send money electronically, but they differ in a few key ways.

          A wire transfer is a direct transfer of money between banks. Within 24 hours, the money is transmitted in real-time. Wire transfers are frequently employed for larger transactions, including the purchase of a home or overseas money transfers. Due to the fact that they need more personal information and confirmation from both parties, they are more secure than electronic transactions.

           

          An electronic transfer, commonly referred to as an “electronic transfer” or “ACH transfer,” is the electronic movement of money between banks that isn’t always done in real-time. The processing of electronic transactions can take several days. They are frequently employed for minor transactions like bill payments or money transfers to loved ones. Since they frequently don’t need as much personal information and have fewer confirmation procedures, they are less secure than wire transactions.

          In conclusion, wire transfers are frequently utilized for larger transactions even though they are normally faster and more secure than electronic transfers. Although they are less secure and take longer to perform, electronic transfers are frequently utilized for smaller transactions.

          Wire transfers and electronic transfers both move funds electronically. In general wire transfers are faster and more expensive and electronic transfers are more convenient and more secure. A wire transfer is done through a network of banks or transfers agents from one account to another. Once initiated a wire transfer cannot be reversed and is generally available immediately. An electronic transfer can be done between two accounts as a recurring automatic payment or via a credit or debit card when a purchase is made. The electronic transfer goes via an automated clearinghouse and can take up to 3 days to complete.

           

          Wire transfer vs ACH

          The Automated Clearing House Network (ACH) is a shared network for banks in the USA to transfer funds between participating banks. Transfers are made in batches, directly from the sending bank to the receiving bank via the ACH system without any intervening banks’ intervention. Wire transfers are one-on-one transfers of money between accounts in different banks which may not have any direct connection, so the transfer has to be routed through one or more intermediate banks, which may take some commission, and which can also slow down the process.

           

          Sending Money Overseas

          Whichever method of money transfer you choose you will need to supply the bank of origin with certain details. When wiring money internationally you will usually need to supply the bank of origin with the IBAN of the receiving account.

           

          This unique number is associated with one account only and is made up of numbers and letters representing the account’s country, bank and account number. The above methods of sending money have their advantages but you also have the option of transferring funds electronically using money transfer apps, online banks and payment tools.

          Cost of an International Money Transfer:

          Banks will usually charge a standardized money transfer fee; money transfer services will charge according to whether you send the money from a funded account, a debit card or credit card. The fee can be anywhere between 0.5% and 3.9%.

           

          Required Information when Sending an International Bank Transfer

          When you make an international money transfer from your bank you need the recipient’s name, address, account information including the recipient’s IBAN.

           

          • IBAN – If you have the recipient’s IBAN number it will make the transfer easier, sometimes it is a requirement and sometimes just an added assurance that the money will get to the account it is intended for.
          • SEPA – If you are making a money transfer between countries within the SEPA zone in Europe you will need the IBAN. SEPA transfers can be executed like a domestic transfer.
          • SWIFT – Small banks and credit unions in the US are not connected to the SWIFT network and so they don’t have a SWIFT code or IBAN. However, this doesn’t mean they can’t do international wire transfers. go to SWIFT code checker
          • Recipient’s Name – To make international transfers you must have the correct BSB and account number as the name of the recipient is not used during the transfer process; only the codes and account numbers are used.

          Cash Versus eMoney – Pros, Cons and Predictions

          Welcome to GBO’s research on Cash Versus eMoney. In this study, we will be taking a closer look at the different types of eMoney and comparing them to Cash.

           

          The advantages and disadvantages of cash and eMoney can change based on the area and particular use case. The acceptance and tangible part might vary from one kind of eMoney to another because some of it can be utilized as a physical card or in other ways.

           

          Although both cash and digital money can be used to complete transactions, there are several key distinctions between the two. Digital money, commonly referred to as e-money or electronic money, is a digital representation of cash that may be saved on a device, such as a smartphone or a computer. Cash is an actual currency in the form of paper bills and coins. The method by which money is utilized and exchanged is one of the key distinctions between cash and digital currency. Cash exchanges can be made instantly and physically, which allows for the holding and trading of the actual currency.

           

          The GBO team will be happy to assist you to open your business bank account through our wide network of banks.

            Overview Cash Versus eMoney

            Last update 14.1.2023

             

            Comparing the pros and cons of cash and eMoney

            Cash eMoney
            Pros Immediate and tangible, physical cash can be held and exchanged in person Convenient and easy to use, electronic money can be easily transferred and stored digitally
              Widely accepted, cash can be used in most places as a form of payment Can be easily transferred, electronic money can be quickly sent to other people through digital platforms
              Can be used without access to electricity or internet, cash does not rely on electricity or internet access to be used Can be easily tracked, electronic transactions can often be tracked and recorded for security and financial tracking
              Anonymous transactions, cash transactions do not require personal information to be exchanged Can be protected through password or PIN, electronic money can often be protected through added security measures such as password or pin
            Cons Can be lost or stolen, cash can be taken without the owner's knowledge or consent Requires access to electricity and internet, electronic money relies on electricity and internet access to be used
              Not traceable, cash transactions cannot be tracked easily, making it difficult to trace or recover in case of loss or theft Can be hacked or stolen, electronic money can be vulnerable to hacking or theft if not properly protected
              Not practical for large transactions, cash can be cumbersome and logistically difficult to use for large transactions Not accepted everywhere, electronic money may not be accepted in all places, particularly in rural or underdeveloped areas.
              Prone to counterfeiting, cash can be counterfeited, which can lead to financial losses Limited tangible aspect, electronic money can not be held in the hand or used in places where electronic payments are not possible

            Digital money is not tangible and is frequently transmitted electronically through digital channels. Additionally, cash transactions are often private and do not call for the sharing of personal information, whereas digital money transactions are frequently traceable and do. In most places, cash transactions are accepted and can be used as a method of payment. Digital money, on the other hand, may not be accepted everywhere, especially in rural or underdeveloped areas, and it needs access to energy and the internet.

             

            Will Cash Survive?

            Already credit cards introduced in the 50’s, debit cards in the 60’s and more recently mobile payments have threatened the survival of cash. Still a report in 2018 showed that cash is still used for 30% of payments made in the US. Older people, lower-income people, those less technically minded and those making low-value transactions are more likely to rely on cash. Younger, middle-to-upper income and technically adept people look for the more convenient and faster use of emoney. Mainstream financial systems holding physical cash may have an advantage over emoney by being able to offer attractive services and financial products. These financial institutions need to be aware of the threat emoney poses and be prepared for the disruption virtual banking may cause to the traditional banking world. The new players, disrupters and challenges could one day replace traditional banks. To survive banks will have to alter their business model as digital monies increasingly threaten to replace them.

             

            When and How will eMoney Dominate Finance?

            eMoney is a little like a private investment fund where you’re guaranteed to get your deposited funds back at face value in the future. This comes with some risk as you rely on the issuer to be able to pay out the required sum when you want to redeem your funds. Before we can do away with paper money and coins there are social issues that need to change.  There are many benefits and disadvantages to going cashless. For the unbankable and bankless, low-income and older generation it will be extremely difficult. How do you give a beggar on the street a few pennies with emoney, or pocket money to a young child or buy from a pop-up country market? Although there will be lower crime involving stealing cash let’s not forget cybercrime and the possibility of theft of digital “cash.” Money-laundering will probably find a way to continue without physical cash.

            Pros and Cons of eMoney Replacing Cash

            Pros:

            1. More convenient in many ways than cash
            2. Storing and depositing funds becomes less time consuming
            3. Handling of emoney is more cost effective than managing hard cash – less man power is needed, less time and less effort.
            4. When traveling currency exchange becomes effortless in a digital emoney world
            5. Criminal tax evasion will be near to impossible if all funds are digital and trackable.
            6. Transactions anytime, anywhere.
            7. Reduced transaction costs.

             

            Cons:

            1. People still doubt the long-term stability of digital money.
            2. Personal data can be exposed and breached.
            3. Hackers could drain your digital bank account.
            4. Technical problems could shut down access to accounts.
            5. Low-income, bankless, unbankable and elder customers will find it difficult, if not impossible to manage with emoney digital accounts and payments.
            6. Low-value transactions are more convenient with cash for most people.
            7. Controlling spending may be harder if you don’t see the physical cash slipping through your fingers.
            8. Banks may dramatically increase the cost of their services to compensate for loss of clientele.

             

            Cash and eMoney Solutions

            eMoney providers could be given access to central bank reserves, or partner with emoney providers to provide central bank digital currency – a digital version of cash. This would have to be done under strict conditions as it would involve risks. In the future we may see Stablecoin, social messaging app payments and digital tokens backed by a safe asset like US Treasury bills become common payment methods. We may not be quite ready for a cashless society and for digital funds to completely replace cash but we seem to be moving in that direction. As innovations continue we can already see the writing on the wall that emoney, in some form will one day replace paper money. We still may see a cash-less society in the future but probably not for a while. Emoney and cash will most likely share the financial arena for quite some time.

             

            Today cash and emoney are the two most common means of payment although there are competitors that might one day become an even more common currency. The value of electronically stored emoney is dependent on the value of physical currency like Euro or USD and cash is dependent on remaining relevant in an ever changing, more technical and virtual environment.

            Electronic Money Institution vs. Bank

            Our area of expertise lies in helping Electronic Money Institutions (EMIs) to open accounts at credit institutions as well as supporting companies to open business bank accounts.

            Our extensive network of banks, payment processors, and financial institutions enables the GBO team to provide valuable assistance in opening your business bank account. We will be delighted to support you throughout the process. EMIs can open correspondent bank accounts in financial credit. EMIs need experienced professionals who understand regulatory requirements and can help them find a banking solution. EMIs can build a trustworthy banking relationship and run their business with the right approach.

             

            Open a bank account for your company or EMI

            WhatsApp or Telegram us: +972504938469, email us: info@gbo-il.com

             

              The rapid growth of the financial services industry, also known as “FinTech”, over the last five years has produced a tremendous range of new institutions that offer advanced digital banking services for personal and business users without themselves being registered as banks. One of the most common forms of the new fintech services goes under the name of Electronic Money Institutions, or EMIs. Here we will try to help you understand exactly what are the differences between Electronic Money Institutions and banks that you are familiar with, and to identify the pros and cons of each.

               

              Understanding the Fundamentals of Electronic Money Institution Bank Accounts

              Electronic Money Institutions (EMIs) are businesses that provide financial services, including the issuance of electronic currency and the facilitation of digital payments. EMIs are required to have a bank account in order to operate, but not all banks are willing to provide them with accounts. This article examines the options available to EMIs for opening bank accounts, including correspondent bank accounts for financial institutions.

               

              Banking for Financial Institutions: Obstacles and Answers

              When it comes to banking, EMIs and other financial institutions face numerous obstacles, including stringent regulatory requirements, higher risk levels, and potential reputational risks. These obstacles make it difficult for EMIs to find a bank willing to open an account for them. There are, however, alternatives, such as opening a bank account in a jurisdiction with a more favorable regulatory environment or partnering with a payment institution that already has a bank account.

               

              Correspondent Bank Accounts: A Viable Option for Financial Institutions

              A correspondent bank account is a type of bank account that enables financial institutions to conduct business in foreign countries in which they have no physical presence. EMIs and other financial institutions frequently use correspondent bank accounts to facilitate cross-border transactions. This type of bank account gives EMIs access to banking services in other countries, which may be crucial to their business operations. However, correspondent bank accounts are governed by stringent regulations, and financial institutions must ensure compliance with all applicable rules. In addition, correspondent bank accounts are frequently more expensive than traditional bank accounts, and it can be difficult for financial institutions to find a correspondent bank that will work with them.

               

              In conclusion, opening a bank account for an EMI can be difficult, but there are options available, such as correspondent bank accounts for financial institutions. It is crucial that EMIs collaborate with seasoned professionals who comprehend regulatory requirements and can assist them in locating a suitable banking solution. With the proper strategy, EMIs can establish a trustworthy banking relationship and successfully operate their businesses.

               

              Banks

              A brief summary of the structure of banking is as follows.

              • Banks are licensed by a central authority in each country where they operate, and are subject to tight fiscal constraints and supervision. In general, banks have to be funded with a large capital base, normally set at a minimum of $10-$20 million (€5 million or up).
              • Banks can offer a wide range of services, such as checking accounts, overdrafts, mortgages, direct debit functionality, payment services, asset management, etc. and can issue their own debit and credit cards. As well, some banks are starting to provide some of the digital financial services that can be offered by EMIs.
              • Banks are required to report to the central authorities at least quarterly and have to keep a predetermined level of liquidity – the ratio of cash and short-term assets to liabilities. Generally, these obligations lead to banks adopting more conservative practices in conducting business, and in being more rigid in terms of services offered and inability to adapt their services to changes in the market. It is for these reasons that the explosion in the financial services sector has happened since businesses have been changing faster than the banks could accommodate.

               

              EMIs

              EMIs operate under a much more relaxed set of rules and supervision.

              • In general, an EMI can be registered with startup capital of less than half a million dollars (€350,000) and the reporting stipulations are less rigorous.
              • EMIs offer services of execution of money transactions, such as credit transfers and direct debits, money remittances, foreign exchange services, and can issue electronic money which is a form of cash stored on an electronic device.
              • EMI can also provide IBAN accounts, payment cards and e-wallets.

               

              Pros and Cons

              The main differences in favor of regular banks are:

              • Banks can lend money to customers, or allow accounts to go into debt. (EMIs work exclusively on funds that have already been deposited into accounts, and no lending is permitted.)
              • In Europe, bank accounts are guaranteed up to €100,000 so that in the event of bank failure, credit balances up to that amount will not be lost. (EMIs have no guarantee.)
              • Banks can offer a wider range of services so that a commercial bank can be a “one-stop shop” for all of a customer’s financial needs. (EMIs are more limited in the services they are allowed to provide.)

               

              The differences where EMIs score points are:

              • EMIs are designed and built for the digital era to make full use of the internet. Most conventional banks were established in the pre-digital age, and will have to spend vast amounts of money and resources just to catch up, without ever being likely to get ahead in terms of range and depth of digital services.
              • EMIs offer the possibilities that are suitable right now. Electronic Money Institutions don’t spend millions on “bricks-and-mortar” facilities and local offices, which is a function needed for conventional banks to achieve market penetration but instead can use their resources to acquire new business by spending their money where it will achieve the highest value.
              • EMIs are flexible in approach to innovation as well as in adaptability, whereas conventional banks are fenced-in by legislation and regulations. EMIs adopt the widest possible spread of options and provide their customers with choices. When it comes to the movement of money, whereas banks work with limited services for card payments and wire transfers, EMIs can have many different payment options that may be better for their clients. read more about e money account
              • An E-money license vs a banking license is much cheaper, allowing more competition between the operators, which means better services at lower costs for the end customer. Both can be great options if you are looking to open an online gaming company.
              • So, to summarize the differences between Electronic Money Institutions and banks, conventional banks can offer degrees of security and a broader band of service that EMIs cannot at this stage match, but they are relatively inflexible and conservative in terms of accepting customers and slow to introduce modern services. EMIs, on the other hand, are offering up-to-date and flexible products that are closely following needs in the business world, and are less restricted by regulations.

               

              Electronic Money Institution vs. Bank

              An electronic money institution (EMI) is a financial institution that is authorized to issue electronic money (e-money), which is a type of electronic payment system that allows individuals and businesses to make financial transactions electronically. E-money is stored in an electronic wallet or on a prepaid card and can be used to make purchases online or in person at merchants that accept e-money. EMI’s are regulated by the financial authorities in the countries in which they operate, and they are typically required to hold a certain amount of capital in reserve in order to ensure the stability of the e-money system.

              Banks, on the other hand, are traditional financial institutions that offer a wide range of financial products and services, including checking and savings accounts, loans, credit cards, and investment products. Banks are typically regulated by national or federal authorities and are required to meet certain capital requirements in order to ensure their stability. In addition to issuing traditional currency, some banks also offer electronic payment services, such as online banking and mobile payments, which are similar to those offered by EMIs.

               

              What are the requirements to open EMI bank account?

              Depending on the institution and nation you are in, certain conditions must be met in order to obtain an EMI (Electronic Money Institution) bank account. To open the account, you may generally be required to present some type of government-issued identification, such as a driver’s license or passport, as well as verification of your address, such as a utility bill. Depending on the laws of the country, some EMIs can also need more information or verification. It is best to inquire about the requirements of the particular EMI you are interested in.

              1. When you register an account with an EMI (Electronic Money Institution), the EMI might need specific paperwork or information for a number of reasons:
              2. KYC (Know Your Customer) rules: In order to abide by anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations, EMIs must confirm the identity of their clients.
              3. Compliance: EMIs must make sure they are functioning within the legal parameters set forth by the nation in which they are doing business.
              4. Risk management: EMIs can more accurately identify and manage the risk related to their consumers by gathering and validating specific information.
              5. To ensure that the account will be active and maintain the minimum level required by regulatory authorities, some EMIs may require a minimum deposit before opening an account.
              6. Proof of address: EMIs may need proof of address to confirm that you reside in the nation you claim to do so as well as to guarantee that the mail will be sent to the address you have provided.

              It’s crucial to note that these specifications could change based on the particular EMI and the nation in which you reside, therefore it’s better to ask the EMI for a list of their particular specifications.

               

              What is an electronic money institution (EMI)?

              An electronic money institution is a type of financial institution that issues electronic money, also known as e-money. E-money is a digital representation of value that is issued and accepted by EMI’s and can be used to make payments for goods and services. EMI’s may offer a range of financial products and services, including the issuance of e-money and the operation of electronic payment systems.

              In order to operate as an EMI, an organization must be authorized by a national regulator, such as the Financial Conduct Authority (FCA) in the United Kingdom or the European Central Bank (ECB) in the European Union. EMI’s are subject to specific regulations and requirements designed to ensure the safety and stability of the electronic payment system and protect consumers.

              EMI’s may offer a variety of bank accounts for customers, including checking accounts, savings accounts, and prepaid card accounts. These accounts may be used to store and manage e-money, make payments and transfers, and manage financial transactions. EMI’s may also offer additional financial products and services, such as foreign exchange services, mobile banking, and online banking.

               

              Open Banking B2B APIs providers

              This research by GBO, a leading corporate services company with extensive experience in innovative financial solutions, highlights the rapidly evolving world of open banking API providers.

               

              GBO has examined how these providers operate, the market size of the industry, and the number of open banking API providers worldwide. This study explores how open banking API providers may affect banking and financial services in the future.

              Open Banking API providers: A brief overview

              Providers of open banking APIs play a crucial role in the rapidly changing financial landscape. They facilitate collaboration between banks, fintech firms, and third-party service providers, paving the way for the development of innovative financial products and services. This brief study investigates how open banking API providers operate, the industry’s market size, and the number of providers in this space.

               

              How Open Banking API Suppliers Operate

              Open banking API providers enable financial institutions to share data with authorized third-party providers (TPPs) in a secure and efficient manner using Application Programming Interfaces (APIs). These APIs serve as a bridge between the bank’s core systems and external applications, granting TPPs access to the required data to create value-added services and products for customers, such as account aggregation, personal financial management tools, and alternative payment options.

               

              Open banking industry market dimensions

              In recent years, the open banking API market has expanded significantly due to regulatory initiatives, customer demand for digital financial services, and the rise of innovative fintech solutions. In 2018, the global market for open banking was valued at approximately USD 7.29 billion and is projected to reach USD 43.15 billion by 2026, expanding at a CAGR of 24.4% over the forecast period.

               

              Open Banking Providers

              It is anticipated that the number of open banking API providers will increase as more countries adopt open banking regulations and financial institutions embrace API-driven collaboration. Plaid, Tink, Yodlee, TrueLayer, and Salt Edge are a few of the most prominent open banking API providers. The precise number of providers varies based on the scope and definition of open banking, as well as the regulatory climate in various countries.

              Open banking API providers have emerged as key enablers of the financial industry’s digital transformation. Their ability to facilitate secure and efficient data sharing between banks and third-party providers contributes to a more innovative and competitive financial services environment. Open banking API providers are anticipated to play an increasingly significant role in shaping the future of banking as the industry continues to expand.

              What is the definition of Open Banking B2B?

              Open banking can be defined as a common model in which banking data is shared between two or more independent parties through APIs to provide advanced capabilities to customers and service providers.

               

              Open banking is also known as “open bank data.” The definition of Open banking B2B is a new feature that allows banks to share financial information electronically, securely, and only under conditions that customers authorize, to banks and non-bank financial institutions through the use of application programming interfaces (APIs). Open banking allows the networking of accounts and data across institutions for use by consumers, financial institutions, and third-party service providers. Open banking is becoming a major source of innovation that is reshaping the whole banking sector.

              Top Open Banking companies

              # Name of Company Name of Services or Products Country
              1 Plaid Data Aggregation and API Platform USA
              2 TrueLayer Data API Platform UK
              3 Yolt Personal Finance Management App UK
              4 Token API Platform and Infrastructure USA
              5 Tink API Platform for Banks and Fintechs Sweden
              6 Figo API Platform for Banks and Fintechs Germany
              7 OpenWrks API Platform for Banks and Fintechs UK
              8 Finreach API Platform for Banks and Fintechs Germany
              9 Finastra API Platform for Banks and Fintechs UK
              10 Salt Edge Data Aggregation and API Platform Canada
              11 Backbase API Platform and Infrastructure Netherlands
              12 Open Bank Project API Platform and Infrastructure UK
              13 Open Bank Project API Platform and Infrastructure Spain
              14 Bankable API Platform for Banks and Fintechs UK
              15 CallVU API Platform for Banks and Fintechs Israel
              16 IbanFirst API Platform for Banks and Fintechs Belgium

              Application programming interfaces (APIs) allow Third Party Providers (TPPs) to access financial data directly, which promotes the development of new and innovative services. Under open banking, banks allow access to customers’ personal and financial data and control of financial transactions to third-parties, such as online financial service providers, vendors, as well as for customers to more easily manage their own finances.

               

              By means of APIs, third-party service providers can use the customer’s open data, and data about the other parties in a transaction to offer a range of financial service options, utilizing data in all participating financial institutions for dealing with new transactions and account changes on the customer’s behalf.

               

              Open Banking Definition

              The definition of Open banking is the practice of sharing financial information electronically, securely, and under conditions of customer approval. Application programming interfaces (APIs) allow Third Party Providers (TPPs) to access financial information efficiently, which results in better experience for consumers.

               

              Open banking allows financial services customers to securely share their financial data with other financial institutions. The APIs can introduce advanced tools such as artificial intelligence (AI) to analyse consumers’ transaction data and to identify the best financial products and services for them, such as a different credit card with a lower interest rate or a savings account that would earn a higher interest rate than the current account offers.

               

              For banks, the use of networked accounts helps lenders get a more accurate picture of a consumer’s financial situation and risk level in order to offer more profitable loan terms. It could also help consumers get a more accurate picture of their own finances before undertaking transactions. Open banking can also help small businesses save time through online accounting and helps better monitor customer accounts and identify security breaches sooner.

               

              Banks can take advantage of this new technology to strengthen customer relationships and customer retention by better helping customers to manage their finances instead of simply facilitating transactions.

               

              Open banking regulation in Europe

              Open banking B2B is already a significant component of European banking regulation. Under the European Commission’s Second Payment Services Directive (PSD2), banks must allow third-parties to initiate payments on behalf of their customers. With the customer’s permission, the open banking framework gives third-party providers access to financial data, allowing them to develop fresh, cutting-edge financial products and services. The European Banking Authority (EBA) and the Second Payment Services Directive are principally in charge of overseeing open banking regulations in Europe (PSD2).

               

              The PSD2 mandates that European banks give third-party providers access to account information about clients and payment initiation services via APIs as of January 1, 2018, when it went into force. This promotes competition and innovation in the banking industry by enabling fintech firms and other non-bank organizations to create new goods and services using the information and capabilities of the banks.

               

              To improve the security of open banking transactions, the EBA has also released guidelines on strong customer authentication (SCA) and common and secure communication (CSC). These regulations state that banks must provide a secure communication route for third-party providers to access customer data and that all payment service providers must employ two-factor authentication for all transactions.

               

              A regulatory framework for the registration and oversight of third-party service providers, known as Account Information Service Providers (AISPs) and Payment Initiation Service Providers, has also been established by the EBA (PISPs). This framework strives to guarantee that these providers have adequate capitalization, proper governance, risk management, and security protocols in place.

               

              Other than the EBA and the PSD2, other nations in the European Union have their own regulatory organizations that keep an eye on the rollout of open banking in their regions. The EBA and PSD2 laws must be followed by open banking providers, and this is the responsibility of the national competent authorities (NCAs).  Open banking has been implemented across Europe, but there are still some issues that need to be resolved. Making sure that clients are fully aware of the risks and advantages of open banking and that their data is protected is one of the primary issues. In order to assure the interoperability and lower barriers to entry for new players, there is also a need for increased standardization of the technologies and protocols used for open banking.

               

              In conclusion, the EBA and the PSD2 are primarily in charge of open banking regulation in Europe. In order to promote competition and innovation in the banking industry, the PSD2 mandates that European banks grant access to client account information and payment initiation services to third-party suppliers. To safeguard the security of open banking transactions, the EBA has also released standards on strong customer authentication and standard, secure communication. However, there are still issues to be resolved to guarantee that customers are informed of the risks and benefits and that their data is protected, as well as to improve interoperability and lower barriers to the adoption of open banking. Additionally, different countries in the European Union have their own regulatory bodies that oversee the implementation of open banking in their jurisdictions.

               

              Open banking schema for each of the 26 European countries

               

               

              In the European Union, responsibility for supervision and also for registering and authorizing open banking service providers rests with each member country, through their National Competent Authorities (NCAs), They publish registers that will be used by Qualified Trust Service Providers (QTSPs) to make decisions on issuing certificates, and by financial institutions to check whether other parties are authorised.

               

              Open banking regulation in UK

              In the U.K., regulations issued by the Financial Conduct Authority (FCA) already require the major commercial banks to cooperate with authorized TPPs. At the moment, only the UK’s nine largest banks and building societies are required to make data available through open banking. About 50 other smaller banks and building societies have chosen to take part in open banking regulation.

               

              The FCA regulations specify two types of service providers:

              • Account Information Services Provider (AISP) lets the account holder see all the account information from different bank accounts in one place online or in a mobile app. AISPs can include budgeting apps and price comparison websites offering budgeting help and product recommendations.
              • Payment Initiation Service Provider (PISP) lets account holders pay companies directly from their bank account rather than using a third-party debit or credit card such as Visa or MasterCard.

              Both PISPs and AISPs need explicit consent to provide these services.

               

              Open banking market size and open banking statistics

              As of January 2020, there were 202 regulated providers in Europe who are engaged in open banking B2B, including about 60 in the UK alone. They provide financial apps that help manage finances and also consumer credit firms who use open banking to access account information for affordability checks and verification.

               

              Open banking examples

              In 2018, Banco Bilbao Vizcaya Argentaria launched its BaaS platform, Open Platform, in the USA. Open Platform utilizes APIs that allow third parties to offer customers financial products without needing to provide a full suite of banking services.
              HSBC launched its Connected Money app in May 2018 in response to the UK’s open banking regulations in their attempt to place more control of financial data into the hands of consumers.

               

              Connected Money allows customers to view various bank accounts as well as loans, mortgages, and credit cards, all in one place.
              Barclays claims to be the first UK bank to enable account aggregation inside its mobile banking app. Its open banking feature even allows customers to view their account with other banks within Barclays’ mobile app.
              PayPal and Valyuz are both products that exemplify how open banking serves the demands of modern banking.

               

              What is an open banking API?

              An API is a way for two computer applications to talk to each other over a network, using a common language they both understand. Open banking allows third parties to develop better personal finance management applications, by means of a banking API. An API is a set of codes and protocols that determine how different software components should interact – they essentially allow different computer applications to communicate with one another.

               

              How do APIs work in banking?

              APIs are essential to open banking services.
              APIs are used to connect banking systems through payment networks as well as to display customers’ information on a bank’s website and via mobile apps. Through open banking, APIs are now being used to issue commands to third party providers.

               

              APIs are also necessary for the functionality of Banking-as-a-Service (BaaS) – a key component of open banking. BaaS is an end-to-end process that connects fintechs and other third parties to banks’ systems directly through the use of APIs. It helps to build up banks’ offerings on top of financial providers’ regulated infrastructure.

               

               

              What is open banking, and what relationship does it have to PSD2? What are the most important services and requirements introduced by PSD2? What are the various Third-Party Provider (TTP) categories? What modifications are under consideration for the revision of the PSD2 directive? What relationship does open banking have to the API economy? What are the benefits and disadvantages of open banking?

              Open banking is a banking practice that grants third-party financial service providers (TTPs) access to bank account information via an application programming interface (API) provided by the bank. The Open Banking PSD2 directive was adopted by the European Parliament in October 2015 as a revision of the Payment Services Directive. The new rules were designed to encourage the development of innovative online payment methods through open banking.

               

              The following are the primary services and obligations introduced by PSD2:

              Strong Customer Authentication (ACS) Payment Initiation Service (PIS) Confirmation of the Availability of Funds (COF) Account Information Service (AIS) Third-Party Providers (TTPs), also known as PISPs, AISPs, and PIISPs.

              The various types of TTPs are as follows:

              1. Payment Initiation Service Provider (PISP)
              2. Account Information Service Provider (AISP)
              3. Payment Instrument Issuer Service Provider (PIISP)

              Changes being discussed in the revision of the PSD2 directive include obligations and rights deriving from the directive, procedures for customer authentication through the methodologies provided by the SCA, definitions and application fields of the directive, transparency of information conditions and requirements, payment institution license and payment service provider compliance, methods of access to payment systems, and how to access accounts held in a specific financial institution.

               

              Open banking is a component of the API economy, which is an economic trend based on the use of APIs to create services and products using data, interfaces, and functionalities developed by other providers. New payment methods and banking products, assistance in managing one’s finances, and the ability to use non-banking services are among the benefits of open banking (such as insurance). However, there are a number of risks associated with open banking, such as the possibility of attacks by malicious individuals or hackers and privacy issues that may arise.

               

              SEPA API Access Scheme

              The Single Euro Payments Area (SEPA) is an EU initiative to harmonize euro payments within the EU and associated countries. SEPA aims to improve payment systems to boost economic growth and integration. The European Payment Council (EPC) created the SEPA API Access Scheme to encourage payment industry innovation and competition by allowing third-party providers to access payment accounts via APIs.

               

              SEPA API:

              The SEPA API Access Scheme sets technical and operational standards for third-party providers to access payment accounts via APIs. The open, fair, and secure scheme promotes payment industry innovation, competition, and consumer protection. Third-party providers need a license from their national regulatory authority to access payment accounts via APIs under the SEPA API Access Scheme. The license requires the provider to meet operational and technical standards, including customer data security.

               

              Banks and other payment service providers must also provide API access to payment accounts. Third-party providers can access payment account information and initiate payment transactions on behalf of customers without logging into their bank accounts. This streamlines consumer payments.

               

              SEPA API Access Scheme benefits:

              SEPA API Access Scheme benefits consumers, third-party providers, and payment service providers. The scheme encourages payment industry innovation and competition, which benefits consumers with better products and lower prices. Third-party providers allow consumers to make payments without logging into their bank accounts, making the payment process easier. The scheme gives third-party providers a new way to sell payment products and services to consumers. This increases payment industry innovation and consumer choice. Third-party providers can access payment account information and initiate payments on behalf of customers, simplifying and lowering costs.

               

              The scheme encourages payment service providers to innovate and compete, resulting in better products and lower prices. API access to payment accounts increases visibility and availability for payment service providers.

              Conclusion:

              SEPA API Access Scheme rules and standards promote payment industry innovation, competition, and consumer protection. APIs allow third-party providers to access payment accounts, simplifying the payment process and improving consumer convenience. The scheme encourages payment industry innovation and competition, which improves products and services at lower prices. The SEPA API Access Scheme is good for consumers, third-party providers, and payment service providers.

               

               

              Authorized Payment Institution (PSD2) Guide

              An authorized payment institution is a finance business registered within the terms of the European Banking Authority directive PDS2.

               

              Within the European Single market, made up of the European Union (EU) and the European Economic Area (EEA) countries, the European Banking Authority (EBA) established a central register that contains information about payment and electronic money institutions authorised or registered to conduct business as financial service providers. The register is established based on the requirement of Article 15(1) of Directive (EU) 2015/2366 on payment services in the internal market – also known as PSD2.

              The EU Payment Services Directive 2 (PSD2)  aims, inter alia, to enhance the transparency of the operation of payment institutions that are authorised by, or registered with, competent authorities (CAs) of the member states, and ensure a high level of consumer protection in the EU, by providing for easy public access to the list of all natural and legal persons providing payment services.

              Article 15(1) of PSD2 payment services regulations requires the central payment services regulator (the European Banking Authority – EBA), to develop, operate and maintain an electronic central register that contains information as notified by competent authorities in accordance with paragraph 2 of Article 15. The paragraph further specifies that the EBA must make the register publicly available on its website, and allow for easy access to and easy search for the information listed, free of charge.

               

              The European Union (EU) established the Second Payment Services Directive (PSD2) as a rule to promote competition and innovation in the banking industry by mandating banks to grant third-party providers access to account information and payment initiation services via APIs.

              Regulation: The PSD2 is a regulation that all EU member states must abide by as of January 13, 2018. It aspires to create a level playing field for all payment service providers, including fintech companies, to make payments in the EU safer, more effective, and more innovative by:

              • mandating banks to grant API access to third parties so they can access client account information and payment initiation services
                require two-factor authentication from all payment service providers for all transactions.
              • establishing a legal framework for the registration and control of third-party service providers, sometimes referred to as Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs) (PISPs).
              • Countries: The PSD2 must be implemented by all EU member states. The regulation hasn’t, however, been applied uniformly across the EU. While other nations have fallen behind, some have been more proactive in their adoption. Open banking service providers must abide by the rules established by the European Banking Authority (EBA) and the PSD2; this is the responsibility of the national competent authorities (NCAs).

               

              Update in 12.1.2023

              Although the PSD2 has been put into effect, the rule has received certain updates and clarifications. To safeguard the security of open banking transactions, the EBA has published standards on strong customer authentication and common, secure communication. For the implementation of the PSD2, the EBA has also released a number of technical standards and guidelines, including those on the usage of APIs and the access to account information.

              Timeline for open banking: The European Commission first suggested the PSD2 in 2013, and the EU formally implemented it in 2015. It became effective on January 13, 2018, and EU member states had two years to implement it. Banks had until September 14, 2019, to adhere to the rule.

              To sum up, the PSD2 is a rule that the European Union (EU) established to promote competition and innovation in the banking industry by requiring banks to grant third-party providers access to consumer account information and payment initiation services via APIs. It is applicable to all EU member states and went into effect in January 2018. The EBA has issued updates to protect the security of open banking transactions, but the regulation’s implementation has not been uniform across the EU. The development of a more advanced and effective payment system in the EU will be aided by this rule.

               

              The Second Payment Services Directive (PSD2) is a regulation implemented by the European Union (EU) that applies to all EU member states. This means that the regulation applies to the following countries:

              1. Austria
              2. Belgium
              3. Bulgaria
              4. Croatia
              5. Cyprus
              6. Czech Republic
              7. Denmark
              8. Estonia
              9. Finland
              10. France
              11. Germany
              12. Greece
              13. Hungary
              14. Ireland
              15. Italy
              16. Latvia
              17. Lithuania
              18. Luxembourg
              19. Malta
              20. Netherlands
              21. Poland
              22. Portugal
              23. Romania
              24. Slovakia
              25. Slovenia
              26. Spain
              27. Sweden
              28. United Kingdom

              Please note that the United Kingdom has left the EU on January 31st, 2020, and the PSD2 is still in effect for the EU member states, however, the Brexit agreement establishes that the PSD2 will still apply to the UK until the end of the transition period on December 31, 2020. The regulatory environment for the UK may change after that.

               

              What would be a positive impact of PSD2?

              The European Union (EU) established the Second Payment Services Directive (PSD2) as a rule to promote competition and innovation in the banking industry by mandating banks to grant third-party providers access to account information and payment initiation services via APIs. The banking industry and customers should expect this rule to have a number of advantageous effects.

              Increased competition: PSD2 gives non-bank businesses, including fintech firms, access to client data so they can create new goods and services based on the information and capabilities of banks. It is anticipated that this heightened competition will give consumers more options and better prices.

               

              Enhanced security: Under PSD2, banks must provide a secure communication route for third-party providers to access client data, and all payment service providers must employ two-factor authentication for all transactions. This guarantees the security of transactions and the protection of consumer data.

              Increased transparency: PSD2 gives clients access to all of their financial data in one location, making it easier for them to understand their spending and saving patterns and to decide how best to manage their money.

               

              Improved regulatory oversight: PSD2 establishes a legal framework for third-party provider registration and supervision, ensuring that these providers are appropriately financed and have suitable governance, risk management, and security mechanisms in place. This enhances the financial system’s general safety and stability.

               

               

              What are payment services?

              The payment services definition was made by the EU payment services directive, that established the same set of rules on payments across the whole European Economic Area covering all types of electronic and non-cash payments, such as:

              1. Credit transfers
              2. Direct debits
              3. Card payments
              4. Mobile and online payments

              The directive laid down rules about the information that payment services providers have to give to consumers and about the rights and obligations linked to the use of payment services.

               

              What is European Payment Services Directive PSD2?

              The PSD2 contains two main sections:

              • The “market rules” described which type of organizations can provide payment services. Next to credit institutions (i.e. banks) and certain authorities (e.g. central banks, government bodies), PSD2 talks about electronic money institutions (EMI), created by the E-Money Directive, and created the new category of “payment institutions” (PI) with its own prudential regime rules. Organizations that are neither credit institutions or EMIs can apply for authorization as a payment institution if they meet certain capital and risk management requirements. The application can be made in any EU country where they are established and they could then “passport” their payment services into all other EU member states without additional PI requirements.
              • The “business conduct rules” specify what transparency of information payment service institutions need to provide, including any charges, exchange rates, transaction references and maximum execution time. It stipulates the rights and obligations for both payment service providers and users, how to authorize and execute transactions, liability in case of unauthorized use of payment instruments, refunds on payments, revoking payment orders, and value dating of payments.

              Each country has to designate a “competent authority” for prudential supervision of the PIs and to monitor compliance with business conduct rules, as transposed into national legislation. A payment service provider license is issued by the competent authority, and is valid in all other EU and EEA countries.

               

              How will PSD2 affect banks?

              The rise of Electronic Money Institutions (EMIs) and Payment Institutions (PIs) has been the greatest threat to the conventional banking markets, and most “bricks and mortar” banks are struggling to catch up with the growth of this sector, in many cases by buying out new EMIs in order to get a head start. All banks are starting to offer the wide range of services for electronic transactions covered by PSD2, but the smaller and less restricted financial institutions are able to keep costs down by not having to support street branches, and so can generally provide the same services for lower charges, and offer better interest rates for deposits.

               

              Does PSD2 apply to credit cards?

              Due to PSD2 customers are seeing the lifting of additional fees for online payment via credit card or bank transfer. It also changes some of the rules by which transactions can be paid for with credit cards, mainly because of the need now for two-level authentication. PSD2 rules state that it is no longer sufficient to simply ask for a customer’s credit card and CVV for online transactions, but a double authentication method is now required to authorize the transaction. This double authentication is known as SCA or Strong Customer Authentication, and it’s about having to use something additional to the PIN or CVV when paying with a card, like a temporary security code or token sent by SMS or a mobile app for example.

               

              Revolut VS Monese

              Two of the most popular and successful new online banking services are Revolut and Monese. The most basic difference is that Monese offers a fully-featured bank account, whereas Revolut functions best as a prepaid debit card working in many different currencies with additional financial services. In terms of size, Revolut has more than 3.9 million users, and Monese currently has around one million. So if you are looking for the most suitable way to handle your finance, how to decide between Revolut vs Monese? We are here to help you make the right decision based on your own needs.

               

              Before dealing with the advantages of choosing either Revolut or Monese, consider the following table of features of Monese vs Revolut showing common features and main differences as we summarize here:

              Feature
              Revolut difference
              Monese difference
              Multiple debit cards
              options for multiple debit cards for each account - besides the physical card, you can create up to 5 virtual cards
              only allows one card per account, no virtual cards
              Debit card top-up
              Free by linking the main bank's debit card to the Revolut account and transferring with the app. Also with a bank transfer, debit card or credit card. Not with cash.
              with cash in the U.K. and via a bank transfer in the U.K. and Europe
              account options
              Choice of 3 levels (Standard, Metal, Premium) for both personal and business
              Choice of 3 levels for personal, one account for business
              Commission on card transactions
              For Simple account, first €6,000 free, then 2%
              First €2,000 free, then 2%
              Access to cryptocurrencies
              Supports Bitcoin and cryptocurrency
              N/A
              Supports international
              transfers Transfer to 29 currencies with a 0.5% fee for anything above £/€5000 each month plus a flat markup on weekends and in certain currencies
              transfer money to over 30 countries in 18 currencies. 0 on first €2,000, then 2% (€2 minimum)
              Commission on card transactions in a foreign currency
              up to two percent of the amount spent
              nil
              Type of debit card
              offers both Mastercard and Visa
              only offers Mastercard
              Transferring money to other accounts
              Free to other accounts in the same country. 50 cent fee for non-euro transfers e.g. sending sterling to a bank in the UK from Euro country
              Free in the UK and standard FX charges for international transfers.
              Customer support
              24h in-app live chat support available in English and Polish
              Monday - Friday 08:00 - 17:00 call center by country available in English, French, Spanish, German and Italian
              App language availability
              20 languages
              5 languages
              Multi-currency balance
              24 currencies
              GBP or EUR only
              Withdrawing cash abroad
              withdraw the equivalent of €200 a month free, then 2% fee
              2% on card spend and ATM usage
              Transaction Alerts
              Sends real-time transaction notifications
              Not available
              Geographic range
              EEA (European Union plus Iceland, Liechtenstein and Norway) plus Switzerland & Australia
              EEA (European Union plus Iceland, Liechtenstein and Norway)
              Unique features
              Can set up recurring payments and direct debit payments to pay for your bills or purchases; Pay Per Day travel insurance; Supports Bitcoin and cryptocurrency
              Instabalance lets you view your balance in your notification tray at any time.
              Interest on savings
              UK saving vault accounts only - 0.8% protected by FSCS up to £85,000
              Not available
              Access portals
              Mobile only
              Mobile only - can only access your account from one registered device at a time
              Access portals
              Mobile only
              Mobile only - can only access your account from one registered device at a time
              Funds top-up methods
              Bank transfers, debit/credit card top-up
              Cash (DE, IT, AT), bank transfer
              Direct debit
              EUR only, €1/£1 fee
              EUR & GBP, free
              • Both Revolut and Monese are online banking services with a range of capabilities, including the ability to open numerous foreign currency accounts, send money abroad, and make transactions with a debit card.
              • Revolut has a greater selection of subscription options, including a free plan, whereas Monese exclusively offers premium plans, which is one of the main differences between the two. In addition, Revolut has a larger customer base and a more well-known brand than Monese has.
              • Another distinction is that Revolut’s regular account does not come with an actual debit card, whereas Monese offers one for an extra cost.
              • Both systems have costs for some transactions, like ATM withdrawals and foreign currency exchanges, however Revolut’s fees are typically less expensive.
              • Overall, both services provide comparable capabilities, although Revolut is more well-known and charges less, while Monese provides an actual debit card.
              • Revolut is authorized and governed by the Central Bank of Ireland, the European Central Bank, and the UK’s Financial Conduct Authority (FCA).
              • Monese, on the other hand, is authorized and governed in the UK by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).
              • It is unclear what precise technologies each company utilizes to power its services in terms of technology suppliers, but it is likely that they both rely on a range of outside vendors for various parts of their business operations, including security, payments processing, and compliance.
              • It’s important to remember that both businesses are startups that have used many technology providers throughout time, updating and renewing them.

              Overall, there is no clear winner in the competition of Revolut vs. Monese. Each one has shared general features that are basic to everyone’s requirements, and both are good choices. Making the difference would be things that are particular to your own specific requirements.