Sometimes, traditional banks don’t provide the kinds of services that fit with the needs of certain individuals or businesses.
This can be for a variety of reasons related to circumstance or having specific requirements. Maybe you’re a startup that needs slightly different services than those offered by a traditional bank, or an individual whose financial track record makes established banks wary.
Whatever the case, virtual banking and e-payments can support these needs without unnecessary complexity or without costing the earth – as the following three use cases show…
Businesses working across multiple countries
With digital and online technologies making it possible to communicate with anyone with an internet connection, many freelancers and small businesses now rely on working with customers and clients beyond their local market.
Traditional banks often charge fees for making and receiving international payments, making them prohibitively expensive for freelancers and for small companies as they grow and deal with larger amounts of money.
Companies that conduct financial transactions with multiple countries using virtual banks and e-payments are able to do so more cost-effectively, with no need to set up expensive wires. In addition, payments can be received and sent instantly.
For organisations that work for third-party businesses through partners, these benefits can be multiplied. If the three companies in question are based in three different countries, payment for work can be expensive and complicated. This is because, once work is completed, payments will need to cross two international borders.
The ability of e-payments to minimise the costs of the international transactions will multiply the savings, benefiting all three of the companies involved.
And if employees need to travel to various countries for business reasons, they can purchase goods and services at no additional cost through prepaid e-payments cards. They also benefit from flat ATM rates and the ability to withdraw cash in any local currency.
Startup businesses are often not well catered for by traditional banks. New business accounts often have a fee introduced following a brief period without a charge. These fees can then rise sharply once a startup’s income exceeds a certain threshold.
In addition, startups wanting to receive payments from abroad, or that have other slightly unusual requirements, may find their account doesn’t support those needs or requires additional fees to do so.
Virtual bank accounts are typically better configured to meet the needs of startups, while offering much the same functionality as startup bank accounts.
Businesses can quickly and simply set up an e-payments account, meaning they can use them pretty much straight away. Rather than having to wait for a meeting with their bank manager or for numerous approvals to come through, they can get on with developing their business.
Another benefit of virtual banking for startups, particularly in their early days when money can be tight, is that they provide good visibility on the financial transactions taking place. Fees are typically deducted at source, making it clear how much money is available at any one time.
E-payments also provide a streamlined way for startups to offer merchant services on their website, meaning they don’t have to wait to take online orders. And for startups that are growing, e-payments accounts can support mass payments, such as the monthly payroll.
People with an inconsistent financial track record
People who have struggled with finances in the past – constantly going over their overdraft limit or failing to pay credit card bills on time – can find themselves shut out from traditional banking products. The same can be said of people who have been declared bankrupt and are in the process of getting their finances back in order.
Virtual banks and e-payments can give people in this situation a way to access essential financial services by offering a way to make payments online without the risk of going into debt.
In addition to giving people the ability to conduct financial transactions, this also gives individuals and businesses that have fallen on hard times the opportunity to build up a credit rating as they work to restore their financial standing.