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Let us help you a bit and shed some light on the most important factors to consider when choosing a payment provider for your business Euro bank account in the UK.

1. Your Company

To begin, look at your business, including its type and the place where it is registered. It will have a big impact on the risk your business faces. If your business is a low-risk one, like a bookstore or an online retail store, you may only need an account with a nearby bank. What if your business is in a higher-risk market or is established in a different country? In that case, you will probably need to look for other options, mostly Electronic Money Institutions (EMIs). Why is that? Because banks don't want to work with companies that are high-risk or that are listed in a different country.

2. Bank vs. EMI

There are two major types of institutions in Europe where you can open an account: banks and Electronic Money Institutions (EMIs). Although the two are similar, there are still some big differences between them.

Option 1: Bank

For small-scale ventures and large companies, it is usually considered advantageous. Within the eurozone deposits, under €100,000 are safeguarded if a bank fails. Nonetheless, corporations tend to hold amounts that could be at risk, in case of a collapse. Moreover, banks operate on the fractional reserve system where only a fraction of your deposit remains untouched.

Option 2: EMI

This is a new type of license that most people don't know much about yet. After PSD1 (Payment Services Directive) and later PSD2 were put into place in the 2010s, EMIs began to show up. You can get the same IBAN from EMIs as from a bank. For the most part, they can work with a wider range of clients. This is often the best choice for high-risk and foreign clients.

Fees

Comparing costs across various business account providers is something that should never go unnoticed. Make sure you understand all of the account's costs. Here are some of the most important fees to check and compare:

  • Account opening vs. application review fees — They seem similar; however, there is a significant difference between the two. Understand it well. The account opening cost is due after the IBAN is issued. So you will not be charged if your application is denied or you do not complete the onboarding process. The application review fee (also known as the compliance fee) is paid in advance to begin the application process.
  • SEPA (euro) transaction costs — These are your typical internet payments in euros. SEPA stands for Single Euro Payment Area. The European Union established a payment integration program to streamline and standardize euro-denominated bank transactions throughout Europe. SEPA transfer fees may be set (usually for low-risk organizations), a percentage of the payment amount (more common for high-risk enterprises), or somewhere in the middle.
  • SWIFT/international payment costs — SWIFT, like SEPA for euros, is an international payment system that supports numerous currencies. These transfers are often slower and more costly than SEPA payments. They may also be fixed, a percentage, or both.
  • Monthly charge — It is a set cost for account maintenance. As a rule, it increases according to the risk of your company.
  • Balance charge — It is sometimes also called an administrative fee. A holdover from the period when interest rates were negative. You may get ECB interest rates here (under the “Deposit facility” column). It was costly to store (“safeguard”) customer money with a credit institution, such as a central bank. Because interest rates are no longer negative, the balance fee should be zero; otherwise, it is a hidden price charged by your payment provider.
  • Other fees — These are inactivity, account closure, bank letter, payment cancelation fees, etc.

3. Reputation

This is the hard-to-measure thing that is very important when picking a safe company. Instead of picking a random company from Google search results, collect information from the following sources:

  • Customer service — Evaluate the bank's reputation for customer service as this can significantly impact your overall experience;
  • Financial stability — Assess the financial stability of the institution, which is crucial for the safety of your funds;
  • Regulatory protection — Ensure that your deposits are insured by reputable entities like the Federal Deposit Insurance Corporation (FDIC) for banks or the National Credit Union Association for credit unions;
  • Fees and requirements — Understand the fees associated with the checking account, such as maintenance fees or ATM usage fees, and any requirements like minimum deposits or balances;
  • Interest rates – Check if the checking account offers interest, although it is typically lower than savings accounts, and if there are any specific requirements to earn higher rates;
  • Rewards and bonuses — Look into any cash-back rewards or new customer bonuses that the bank may offer for opening an account;
  • Account access — Consider the ease of access to your account, including ATM availability and online banking services.

All these small details will help you get an idea of whether a particular payment provider or bank meets your needs and requirements.

4. Risk Appetite

Confirm the bank accepts your specific business type, such as sole proprietorship, partnership, LLC, or corporation. Some banks may have restrictions. Additionally, it would also make sense to ensure that your business meets the bank's size and revenue requirements. Many banks have minimum revenue or asset thresholds for business accounts. Verify your business meets these criteria. Otherwise, you will lose time for nothing.

Let’s Wrap up!

With so many benefits to having a Euro account in the UK, it's clear to understand why a growing number of individual entrepreneurs and big companies are opting to register these accounts. However, in order to get the maximum benefit, it is important to select a payment provider properly.