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Which is the best of the 4 evils (small business banking)
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.
Firstly, congrats on launching a new business and achieving some early market traction!
Your question (i.e. which bank account should I use?) is one that new business owners ask a lot. My suggestion is always the same: bank with whoever you are comfortable and get the most basic entry-level business account that they offer. Yes, you might be able to save a few bucks by hyper-analysing every possible option, but in the bigger scheme of things it probably won't matter. Either your business will take off (in which case banking costs should be a nominal line item) or it won't (in which case it won't matter).
Just to be clear, I'm not saying that you shouldn't embrace vigilant cost control because it absolutely is important (at every stage - not just when starting out). But as important a resource as money is, your time is even more valuable. Researching bank options excessively is time that could almost certainly be allocated more productively somewhere else. Obviously you shouldn't choose blindly, hence my advice: pick the bank that you like the most (or dislike the least) and get their least expensive business account. You can always change your mind later.
Originally posted by aidenmark
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 ).
Just to be clear, does your payment gateway charge 3.2% per outbound transaction (i.e. transferring payments received into your bank account) or 3.2% per inbound transaction (i.e. payments received from sales)? The latter is reasonable (assuming it is limited to credit card transactions - if it applies to bank debit orders as well then it is excessive) but the former is ridiculous.
For what it's worth, I've used Sage Pay for years and recommend them highly. Their fees are low, their service is extremely reliable (I have literally never encountered a single glitch in 3+ years), and their client service / support is exceptional (I used a FNB merchant facility before switching to Sage Pay, and that was hideously expensively).
Founder of Growth Surge - Helping entrepreneurs create more wealth and enjoy more freedom.
Just to be clear, does your payment gateway charge 3.2% per outbound transaction (i.e. transferring payments received into your bank account) or 3.2% per inbound transaction (i.e. payments received from sales)? The latter is reasonable (assuming it is limited to credit card transactions - if it applies to bank debit orders as well then it is excessive) but the former is ridiculous.
For what it's worth, I've used Sage Pay for years and recommend them highly. Their fees are low, their service is extremely reliable (I have literally never encountered a single glitch in 3+ years), and their client service / support is exceptional (I used a FNB merchant facility before switching to Sage Pay, and that was hideously expensively).
Hey Greig, Thanks for the killer post!
I'll take your advice to heart. with that in mind it will either be FNB ( quite nice with stuff they include ) or nedbank, which is who i bank with. Good point on time being wasted, as soon as i read it i realised it has already happened.
On the Payment Gateway, they charge 3.2% on incoming card transactions, and 2% on instant-eft. They then charge a pay out fee(R10), for moving the money to my bank account, once weekly. Its the best rate i could find with all the many people i spoke to, and removing the need for a merchant account is a very crucial point of their benefits.
Sage has some very nice options, but their rate is 3.9%, and they are 100% non-negotiable on it. i liked that you could integrate 2 of their products, and then totally remove the need for a SA Bank Account. All the payments are then done from your sage account. very interesting value proposition. But the 0.7% makes a huge difference in the beginning, and in a few transactions will cover the costs of the banking account.
But as important a resource as money is, your time is even more valuable. Researching bank options excessively is time that could almost certainly be allocated more productively somewhere else.
As much as I agree that time is valuable - you have to spend time researching something that is probably going to be a service provider for you for the next 10 years and spending a day or so finding the best option will save you lots of money over the next few years.
As much as I agree that time is valuable - you have to spend time researching something that is probably going to be a service provider for you for the next 10 years and spending a day or so finding the best option will save you lots of money over the next few years.
Agreed, Problem arises when "a day" of research turns into "a month" of research, which happens very easily.
It sounds like an e-Commerce website issue here - you only need a bank account for the money to go into and a paygate (not really necessary). Payfast paygate works best and most economical and you can set it to do automatic payouts.
I've built quite a few e-Commerce websites which are simple and very easy to use. Some site owners have simple EFT payment set-up. The system sends invoice to client upon purchase and this invoice contains banking details. You don't let any stock leave the premises before the funds are secured of course. Some site owners use payfast - i've worked with them for the past 3 years now and is the best in terms of customer support and fees.
It sounds like an e-Commerce website issue here - you only need a bank account for the money to go into and a paygate (not really necessary). Payfast paygate works best and most economical and you can set it to do automatic payouts.
I've built quite a few e-Commerce websites which are simple and very easy to use. Some site owners have simple EFT payment set-up. The system sends invoice to client upon purchase and this invoice contains banking details. You don't let any stock leave the premises before the funds are secured of course. Some site owners use payfast - i've worked with them for the past 3 years now and is the best in terms of customer support and fees.
Hi Lynn, Thanks for the input, i have, however, already got a payment gateway.
what i really would like to know is just the opinions on which business banking account to go with.
Like at the moment i believe that its a race between nedbank and fnb for me. Fnb is only marginally winning because they only charge R4 per payment via internet banking whereas nedbank charges R8.
Luckily all my money will be coming in via a payment gateway so it doesnt matter if i change bank accounts later.
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