[Question] Which is the best of the 4 evils (small business banking)

[aidenmark]

Hi Everyone,

First post, and first day here (as a registered user).

Basically, the story goes as follows, Wife and I come up with a crazy idea, wonder if it'll work, do some research, people love it, yay, we're starting a business. Then the steep learning curve ensues, the whole thing will be run on a website, suddenly i learnt all about the different complexities involved therein. However one of the most frustrating things is finding a company that will help a start-up and wont demand almost all of the profits just to process money.

So we have registered a company, and are kind of set on a payment gateway, as we found someone that will process the payment, and pay out the money every so often at 3.2% per transaction ( ridiculous, but the best of the bunch, and removes the need for a merchant account ).

Now we have to find a small business banking account. I've done some (read A LOT of) research, and cant seem to find the best of the evils. What I'd like is some opinions or suggestions about what you guys would do/have done. Im not opposed to any bank, but would like to pay as little as possible, and not pay for incoming electronic deposits.

Any suggestions, questions or opinions welcome.

Hi, Im Aiden, the new guy and this was my first post!

[HR Solutions]

So we have registered a company, and are kind of set on a payment gateway, as we found someone that will process the payment, and pay out the money every so often at 3.2% per transaction ( ridiculous, but the best of the bunch, and removes the need for a merchant account ).

If I understand this correctly - you are paying someone to pay someone ? Why don't you just process your own payments ?

We use FNB Business banking - I have a fantastic Relationship Manager and works for me.

[aidenmark]

If I understand this correctly - you are paying someone to pay someone ? Why don't you just process your own payments ?

We use FNB Business banking - I have a fantastic Relationship Manager and works for me.

Ha, I'm paying someone to process payments for me. From my understanding, any ecommerce site needs 3 things for the money to change hands from the consumer to me.

1. Bank account - where the money will eventually end up ( and our daily account )
2. Merchant account - this piece allows money to be taken from credit cards/ debit cards/ efts etc and passed to the bank account. Necessary for credit card transactions
3, Payment Gateway - these are the people that process credit card transactions, and integrate with 3d secure to take the money from the consumer

Generally you need to have all 3 pieces separately, with the bank account taking money when funds get deposited, the merchant account taking a percentage of the transaction, and the gateway taking a per-transaction fee for processing. some companies aggregate the merchant account and payment gateway piece, so that i would only need them and a bank account.

Does it make sense or have i totally missed the boat?

[HR Solutions]

Sounds very complicated to me and not sure why you are doing this. What is wrong with a simple bank account, EFT's and a business credit card on the account for a small business ?

[aidenmark]

Sounds very complicated to me and not sure why you are doing this. What is wrong with a simple bank account, EFT's and a business credit card on the account for a small business ?

Think we might be talking past each other. This is for taking payments on the website from consumers. So when a consumer decides to purchase from our store, they pay with their credit card. This is the process to get that money into the business account. Kind of like an electronic card swiping machine at a shop?

[IanF]

Hi
We use Payfast, I just checked our fees.
For credit card it is R2 plus 3.9% plus VAT.
Who are you using?

[aidenmark]

Hi
We use Payfast, I just checked our fees.
For credit card it is R2 plus 3.9% plus VAT.
Who are you using?

Well, i will be using Pay-u once i actually have a bank account which is what i need to find.

If you do want to chat to someone there, let me know, the lady that helped me was great and the only one in the entire industry willing to help.

[HR Solutions]

Think we might be talking past each other. This is for taking payments on the website from consumers. So when a consumer decides to purchase from our store, they pay with their credit card. This is the process to get that money into the business account. Kind of like an electronic card swiping machine at a shop?

Sorry totally missed the mark there

[aidenmark]

Sorry totally missed the mark there

Haha, all good.

The piece i am actually trying to find is a bank that wont entirely fleece me just because the account is labelled as a business account. I mean as a micro enterprise the rands and cents matter.

[IanF]

Hi Aiden
Thanks for that I will check out Payu then.

[aidenmark]

Hi Aiden
Thanks for that I will check out Payu then.

Cool, like i said, if you do actually want to use them, let me know, and ill PM you the ladies details.

[Justloadit]

I am with FNB, and there is no charge for EFT deposits into my account, and this would probably be how the money enters into your account from whatever platform.

The only time I pay for a deposit, is when there is cash or a cheque used for the deposit.

If you wish to really pay low fees, then look at Capitec, not really business, per se, but give them a call and see what they say.

I am with FNB and quite happy with the service as far as electronic banking goes. Hardly ever go to a branch, and usually have the manager come and visit me, but then again I have been their client for years, and have had a number of business accounts with them over the years.

[Dave A]

Capitec seems to come with the lowest costs - I'd seriously consider it while in early start-up mode.

When it comes to the Big 4 - An FNB account would come with the potential of having a PayPal merchant account without having to pull tricky stunts...

Fees may vary from bank to bank according to your banking profile, but best I can tell Standard has managed to become the most expensive across virtually all levels.

[aidenmark]

but best I can tell Standard has managed to become the most expensive across virtually all levels.

Its crazy, They are nuts. I bank with Nedbank, but have been severely underwhelmed.

i like FNB because of all the stuff they offer with it (the extra goodies) which is why i asked the question on here.

But getting any information from any bank is like drawing blood from a stone!

[Dave A]

Its crazy, They are nuts. I bank with Nedbank, but have been severely underwhelmed.

I bank with Standard and I find their service levels great. Their fee structure options also improve once you reach a scale where their Business Online banking package starts to be viable - but only once you have to make around 50 payments or more per month. As a rough guide, if you're spending about R800.00 per month or more on your bank service fees, you might want to look at it.