Hello. My name is Faisal Khan.
I’m a banking and a payments consultant and today I’ll be explaining to you what a payment account is. A payment account is basically a pseudo bank. Its a pseudo bank account. It’s offered by a payment service provider or a non-banking financial institution that offers you pseudo banking services under their name. Example an FX broker could have an account with a bank they’ve had a relationship. They maintained it. They have all the compliance the KYC etc. and then they can offer a segregated name account underneath. If you are a service provider or a institution that is having a very difficult time in getting access to banking you may want to consider a payment account.
The basic operations of a payment account is very simple. No cash no checks. Electronic payments in. Electronic payments out. For all the in and the out, they charge a fee. So the fee could be something as low as a 15 20 basis points could be as high as 1 percent. But usually it hovers around 40 to 50 basis points. So half a percent is what you would be expected to pay off all the payments coming in and out. Whilst this may seem very expensive payment accounts are the go to solution because you can’t get access to banking. You have tried you’ve knocked on every door no one is giving you access to banking so payment account may just be your very best option.
Traditionally offered by FX brokers they are now being offered by all sorts of non-banking financial institutions, you have payment service providers your payment processors your money services businesses that are now offering payment accounts you have FX brokers in themselves payment companies that are offering payment accounts and it’s not a bad option to look at. Yes agreed. There is a fee that you have to pay but it’s not a bad options to look at provided you know you don’t have access to regular banking. So payment account may just be a savior.
If you have any more questions or comments feel free to ask below in the comments below. And I’ll be happy to answer. Take care.
This page was last updated on September 1, 2022.