Providers of financial services, international payment systems, are becoming more and more popular. The pandemic, which has made serious adjustments to the usual course of business, has indirectly contributed to the growth in the number of users of payment systems. With restrictions on freedom of movement, people began to look for alternative ways of carrying out these or other financial transactions that do not require the physical presence of the client in the bank branch. And found them in the list of services of electronic payment systems.
Payment systems, of course, did not appear now and were prevalent long before the pandemic. Quarantines and lockdowns only spurred demand. We have already devoted a lot of our materials to PSs and EPSs, you can easily find these articles in the UJournal section. We recommend you to read the general review of payment systems, as well as the article about electronic payment systems working in Russia.
In this article, we will consider all possible advantages of servicing in payment systems, without ignoring the disadvantages and possible risks.
International payment systems – International payment systems
Payment systems that provide a wide range of financial services to clients, both entrepreneurs and individuals, are also called EMI (electronic money institution). The systems are authorized not only to open accounts and conduct international transactions but also to open electronic wallets and to issue electronic money.
In recent years the term non-banking is used more and more often concerning payment systems. This name is quite true, but not for all PSs, but only for those that have a banking license. Such neo-banks can accept deposits and provide credit services. But more often the neobank is a separate subdivision of a classic bank, not fundamentally different from a traditional financial institution.
The existence of only a financial license somewhat limits the list of services of payment systems. This, however, does not prevent many of them from positioning themselves as non-bank.
In addition, all payment systems are categorized according to certain characteristics:
- By geography of activity: international, regional, national;
- According to the type of customer service: work only with legal or physical persons, or service to all categories of clients;
- According to the number of currencies: mono- and multicurrency;
- By the type of business of clients: some PS serves only traditional lines of business, but some work with High-risk business.
What are good IPs and what services are available to their users
The COP can provide individuals and businesses with a lot of opportunities:
- soon to open an account;
- instant transactions;
- the ability to accept and send payments in currencies;
- no unprofitable conversion;
- ample opportunities for payment;
- diversification of cash flows.
Clients of the vast majority of payment systems have full access to the following services:
- opening of accounts (both mono- and multicurrency);
- sending and receiving transfers in international systems (SWIFT, SEPA, etc.)
- issuance of international plastic cards in different currencies;
- deposit acceptance;
- issuance of loans (not in all COPs);
- Internet acquiring.
Based on the list of services, we can conclude that the main circle of users of payment systems are entrepreneurs and freelancers working with foreign clients. For one reason or another, it is inconvenient and unprofitable for them to serve international contracts in banks, and payment systems relieve them of several difficulties.
The real benefits of SAR
The steady development of FinTech makes payment systems an increasingly competitive player in the financial services market. The main advantages of SARs include:
- Prompt service, speed of account opening and transactions;
- Remote service, no need to go anywhere, much less drive;
- Advantageous rates;
- Ability to work with different currencies;
- Loyalty to non-resident clients;
- The presence of the necessary tools to manage cash flow (output to other PS or banks);
- Security of personal data and funds;
- Simple identification procedure.
Users from Russia and other post-Soviet countries, entrepreneurs, and freelancers, choose the SAS precisely because of these advantages. Quick and uncomplicated registration, prompt receipt of payment for services or goods, storage and use of funds in currency, no need for conversion at an unfavorable rate.
The downside of payment systems
It is known that nothing in the world is perfect. There are disadvantages and risks in international COPs. They are not so great as to be a reason to refuse service in the COP, but you should know about them in advance:
- Payment systems have not yet won such user loyalty as traditional banks. Therefore, potential customers are sometimes distrustful of making payments through PS;
- A small list of services, compared to traditional banks;
- Increased requirements. Attention to the activities of the PS by the supervisory authorities is getting stricter, including compliance with AML (“anti-money laundering” laws);
- Payment limits and deposit amounts;
- The risk of freezing funds and blocking accounts. Payment systems, fulfilling AML requirements, constantly monitor transactions. If the slightest suspicion arises, the compliance service may restrict the user’s access to services.
It is impossible not to mention the restrictions for certain categories of clients. So, some international systems refuse to send payment cards to citizens of certain countries. In addition, non-residents can pay for PS services at higher rates.
How to choose a payment system?
Despite all the above-mentioned disadvantages, you can choose the international payment system which will completely meet your expectations. You can do it in two ways: you can either spend time studying the offers and conditions on your own or ask our specialists for assistance. Fill in the feedback form to get comprehensive information