Many people ask themselves, how do I open a business account and where is the best place to do it? Before, banks were the only option and the procedure was quite extensive, since it required being in person in a branch, standing in line, filling out forms, paying different fees and waiting for days or even weeks. In order to offer a viable alternative, new financial institutions, taking advantage of technology and the digital world, developed mobile banking for businesses.
Mobile banking is, in theory, a portfolio of well-known financial products such as accounts, cards, credit products, etc. However, this modern banking has several advantages. To begin with, it is offered 100% online by these institutions, also known as neobanks, which reduces operating procedures and costs to a minimum, thus saving time and money.
For example, with Blackcatcard, a neobank for businesses with significant growth, entrepreneurs can open an account very easily. They must first open an account as an individual client, which is totally free and takes only a few minutes (between registration of personal data and verification of identity and address), and then apply to open a business account. Particularly in the EEA, the fees for opening and maintaining this type of account are considerably lower at Blackcatcard compared to many traditional banks in the market.
A corporate client, as soon as he opens an account with Blackcatcard, gets a free virtual business card instantly and a plastic card with no shipping costs to any place he indicates. It is worth noting that it is possible to issue several cards at a low cost, which are extremely useful to organize the company’s budget and make payments as needed with different cards, which raises the level of security and ensures that the customer can continue to use his funds in case of theft, online fraud or blocking of one of his cards.
A third point to highlight in the mobile banking of the neobanks is the usefulness of their apps, which facilitate money management. Blackcatcard is a clear example, since corporate clients can find everything they need for their business in one place, without having to depend on offices and employees, as happens with banks. If they need to make business money transfers to pay suppliers, a few clicks on the app will be enough. In addition, on this same platform they can issue corporate cards to pay salaries to their employees.
Although traditional banks have long years of experience, this does not make them infallible. In fact, many large banks (most recently Silicon Valley Bank and Credit Suisse) have gone through severe crises, putting their customers’ deposits at risk. This is because banks can use those deposits, sometimes generating some profits for their clients, making investments, loans, etc. In case of bankruptcy, customers’ money is left without backing. In Europe, foreseeing these catastrophic situations, banks are obliged to have a guarantee scheme to give up to 100 thousand Euros to their customers in case of collapse. However, if a customer has a deposit above that amount, he will not receive the remainder until the bank settles its obligations first.
In contrast, money in a business account at a neobank can only be used by its respective depositor. Regulators in Europe, in fact, are very strict in this regard, so they check the balance sheets of neobanks on a daily basis, which must prove that their funds actually correspond to the money deposited and currently stored by all their clients. This is an advantage that gives security to both corporate and individual clients, who can trust that their money is always in their account.
It is clear that the neobanks are here to be major competitors in the financial sector. Even their good performance in the market has forced banks to modernize in some way. In any case, this healthy competition will continue to be beneficial for the most interested parties – the customers.