We just started selling software in the UK and are looking to setup a bank account to receive payments. We have a card processors. We are registered in the UK and have bank account for checks, etc. but they want ₤50,000 before we can begin accepting transactions!

What alternatives, recommendations might anybody have?

AC

€ 50,000,00 is huge amount, never hear of that before ?! Please clarify for what this amount is.

As I read it, then it sounds they want £ 50k for starting your processing ? if that's right, then there are alot of other alternatives which are able to help you.

Ups, it was £50k not euro, my fault.

Welcome to the forums anonymouscaller!

Have you checked out Barclay's to see if they could help you out?

Thanks all for responding so quickly.

As I understand it, the ₤50K is to cover refunds, etc. Because our software is on a subscription basis: buy it , receive data updates at the beginning of every quarter usually on an annual basis, they say we fall into the category of magazine subscriptions! No amount of explanation would change the deposit amount. Because of the price of our software, they say that the only way we can accept transactions from the Internet (we use Secure Trading for our pay processors) is if we have a huge deposit.

There has to be a better bank.

I'm waiting to hear back from HSBC. Will try Barclay's. Any others?

That is sometimes high risk for some business because of all the chargebacks. You might look around for a few other MAPs as well. Some might be able to offer you a third party solution until you reach about $30K a month and then give you your own MID

You are in EU and you have many options to get own MID

First off, welcome to the forums.

Secondly, it really depends what your existing/estimated sales volumes are. If you currently have (or estimate to have) sales in excess of 30k per month, most banks will ask for a security deposit. That deposit, can be up to 3 months of your sales revenue, so it is not unheard of.

I do believe there are other alternatives, but perhaps you can enlighten us with your current/estimated revenue.

HSBC will probably be worse. ePayments will quote you a rate based on your volume, talk you through the details and send you a contract, when you return the contract the details are passed to your branch manager (or business manager @ HSBC) to do the risk assessment. They basically work on the basis for annual subscriptions that a quarter of all transactions may be charged back. When you process more than £10k/pa in card they are not happy to this unsecure, so HSBC branch will look at your accounts and decide weather you are credit worthy for annual-card-processing/4, if not they will ask for annual-card-processing/4 deposit/guarantee. This is why HSBC practically insist on having the business account at HSBC and 6 months trading with them before ePayment waste their time, its the branches risk. Unless you process 1million/pa or already have a trading history with HSBC don't bother, you will only be messed around.

Barclays are more flexible and can do this stuff like 30-day deferred, barclays underwriters work alongside the quote/sales people and can often give you a "real" underwritten decision the same day, although the rates are quite steep.

WOW 50k is a large up front reserve. There are quit a few international merchant accounts that you can acquire for a lot less, especially since for are in the UK.

We would advise against so large deposits unless you are dealing with millions of turnover in high risk areas or close to them.

The problem with deposits is that, in many cases, Visa and MC penalties and fines are adressed, and that is quite fair, to the bank and not to the merchant. The bank should not direct those fines or apply them to the merchant, when many banks and their intermediaries are trying to do that constantly.

Unless your transactions indeed provide a serious risk of chargebacks, such deposit should not be granted.
The situation where PSPs, Banks, their agents and so on, go around rules themselves and put the penalties, fines and liability on the merchants shoulders happens so often that it definetely should not be ignored.