Eternity Law International — News — Bank against “payment”

Bank against “payment”

Published:
March 25, 2020

BANK AGAINST “PAYMENTS”: SIMILARITIES AND DIFFERENCES OF TWO FINANCIAL SOLUTIONS

In the XXI century, a significant part of the business has moved to a worldwide network. Next came the services that they needed for registration, consultations and financial transactions. Thus, the phrase that the bank is against “payment” became relevant.

Banks with large capital are developing online banking services to provide customers with the opportunity to work with accounts regardless of the time of day or location, wherever there is Internet access.

Along with traditional “offline” banks, alternative payment systems (“payments”) began to appear, which were called online platforms. They allow you to make many financial transactions offered by traditional banks.

However, they have payment systems and a number of differences, which will be discussed later.

LICENSES

A bank is a legal entity with a special license. To obtain it, you must fulfill several requirements:

create your own savings;
prove to the regulator about the ability to handle the means.

A payment system is an organization whose financial license is of a different type. She does not allow third parties to use the funds, but can make payments.

Due to high requirements, obtaining a document is not easy. The regulator scrupulously checks all the nuances, especially personal information about the beneficiary.

HOW MOVES ARE MOVED

Banks can make transactions, this allows them to make the amount of Loro-nostro accounts that other banking organizations have (in fact, correspondent accounts).

In the absence of the consent of colleagues with the institution, assistance comes from correspondent banks that “link” the organization without concluding an agreement.

“Payments” send money using simple banks, with the only difference being that the transaction is from accounts opened for themselves. In this case, the client can practically use the accounts of a financial organization – a system operator.

This allows the client of the payment system to make transactions with reliable banks, which, directly, would hardly have opened an account for him.

The client has the right to pay and use the funds using the name of the partner company, its details in the “payment”, indicating that this contribution was made by the partner company. It depends on the type of contract concluded by the partners.

You should pay attention to this, otherwise a situation may arise in which a third party will pay for your products or services.

STAFF

For normal operation, the bank needs to have the right number of employees with different specializations.

Serving a payment system requires a significantly smaller number of specialists, because of this there are restrictions in making some decisions: they are not given the right to open accounts in special jurisdictions.

This is due to the lack of specialists who own the legal laws of a particular state.

HOW ABOUT DEPARTMENTS

Several units may have very small banks, where the client can contact, and the manager will help him solve the problems.

Payment systems most often work only on the network (with the exception of the organization’s office), any operations are performed here.

If you have questions, the client has the right to seek help from the support service, but to get to the office of the company, for example, to make a transfer of funds with the participation of the manager, most often will fail.

“Payment” does not have the necessary infrastructure. But in the future she may have branches where customers can be served.

HOW VISA, MASTERCARD AND SIMILAR CARDS ARE RELEASED

Banks issue cards for payments that allow access to user accounts with a special “key” function. Similar products with similar functionality are produced by “payments”.

This allows you to pay, withdraw cash from your accounts using ATMs of any banks.

It is quite difficult to issue a cooperation agreement with such giants as Visa or MasterCard. And when a company issues similar plastic cards, it can become a confirmation that the payment system is functioning reliably.

WHAT DIFFERENCES OF BANKING SERVICES AND PAYMENT SYSTEMS

The main thing that distinguishes “payments” from bank services is that they are not:

  • issue loans;
  • place deposits;
  • invest projects;
  • save money.

The functions of the payment system include urgent provision of the movement of funds, in which it significantly exceeds most of the traditional banks.

In addition, such systems are able to establish profitable offers for currency conversion. This is a convenient option for interstate online stores.

WHO HAS MORE FAVORABLE TARIFFS

Typically, payment systems have lower transaction rates than banks. This is due to the presence of material infrastructure and full-time specialists at banks.

And for “payers” it is enough to have a minimum staff, they don’t need to support departments or ATMs.

FEATURES OF CLIENT IDENTIFICATION BY DIFFERENT ORGANIZATIONS

Now all financial flows must be transparent, therefore banks and “payments” check absolutely all the information! But there is a difference in such approaches.

Typically, the compliance department (identifies customers, checks the purity of origin of funds) has up to 40% of the staff in a traditional bank.

They make a thorough check of clients, which allows them to verify the reality of the declared beneficiary, and the money received from him is honestly acquired and will not create any problems.

The verification continues up to six months, especially for a non-resident. Such clients must come to the bank in person to open an account.

“Payments” do not need to personally meet with the client to open an account, and all the necessary documents can be sent over the Internet. Information is checked much faster, due to the lack of too stringent requirements for it.

However, it is a mistake to think that everyone can work with them, without exception. “Payments”, like banks, operate under licenses issued by state bodies, and there is the possibility of losing them quickly if the conditions for identifying their customers are violated.

When it turns out that the latter conducted illegal operations, the system leaders will have to bear criminal responsibility.

HOW TO COOPERATE WITH HIGH-RISK BUSINESS AND NON-RESIDENTS

International payment systems serve non-resident customers, subject to the laws in their activities. This is a blockchain platform, and possibly an online casino.

Traditional banks are not very willing to serve these clients, now they do not even cooperate at all.

WORK WITH OFFSHORE

Traditional banks rarely cooperate with offshore organizations. This is due to the lack of an office, the required number of employees, a website, justifications for their practical activities.

Very rarely, a bank serves organizations from Belize or BVI if they become “offshore” in fact.

“Payment” may be taken to service traditional offshore companies, but a conclusion on each of them is issued individually, taking into account many criteria. They can be:

  • Beneficiary’s personal information
  • organization activities and so on.

WHICH PERIODS ACCOUNTS ARE OPENED

A non-resident will be able to open a bank account in about 6 months, this is at best. Employees of the organization spend many hours to check the beneficiaries, managers.

More quickly work “payment”. They open accounts for several days with the timely submission of all documents and the absence of complaints against customers related to the organization and the source of origin of its funds.

Summary

Banks and payment systems operate differently with customer funds. To participate in investment projects, keep money or get a loan, a client should contact a “material” bank.

To solve issues related to trade, regional or international, the bank may well replace the “payment”. In addition, it is more flexible when working with clients, while compliance verification is not so strict, it has fewer complaints about the activities of legal entities.

Specialists of Eternity Law International will provide you with professional services in full legal support, selection of documents and we will provide advice on this issue.

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