Experience Seamless Financial Services!What Sets High-Risk Business Accounts Apart from Traditional Accounts?
Regardless of your sector, whether a small start-up or a well-established multinational company, you need a reliable business account. Getting financial services for your business is one of the most important decisions that greatly impact your financial operations in the long term.
Setting up a business account for your business is just like setting a foundation that will determine your cash flow, financial management, profit margin, and growth potential in the future. Imagine getting a traditional business account for your retail store and facing delays in payment settlements every now and then, seems like a nightmare, right? To protect your business from such a situation, you need to identify what kind of business account your business needs.
This blog explains how high-risk business accounts UK are different from traditional accounts so you can make an informed decision for your business while opting for financial services.
Factors That Determine If You Need Traditional Accounts or High-Risk Business Accounts UK
 The choice of business account largely depends on a few factors, such as:
• Type of Industry
Industries are commonly categorised as high-risk and low-risk due to factors like chargebacks, nature of products, chances of regulatory issues, high fraud risks, etc. High-risk industries such as gambling, gaming, CBD, forex, and vaping need high-risk business accounts UK for their unique financial and regulatory challenges. In contrast, businesses within the low-risk category can benefit from traditional accounts.
• Payment Methods
Another factor which can’t be overlooked is the type of payment methods your business supports. If your business deals with international billing, recurring payments, or cryptocurrencies, you’ll need an account supporting your payment needs.
Features That Differentiate High-Risk Business Accounts UK
1. Lengthy Application Process
High-risk industries are subject to stringent laws and regulations in the UK, and these strict regulations lead to a more complicated application process for high-risk business accounts UK. As opposed to traditional accounts, high-risk business accounts have a much longer and more complex process that involves submitting detailed documents, scrutinising your financial history, contracts, partnerships, and, in short, everything from business model to compliance to evaluate risks. For example, if a bakery in the UK opens a business account, it will just need basic documentation, and the account will be functional shortly. On the contrary, if a CBD store needs a high-risk business account, it will go through a long and daunting process before finalising an account.
2. Higher Payment Processing Costs
Secondly, increasing challenges for high-risk businesses, high-risk business accounts UK mostly come with higher payment processing fees. Why is that? Well, simply because the payment processing for businesses flagged as high-risk comes with a significant risk of fraud, chargebacks, and disputes, therefore high-risk accounts charge higher fees than traditional accounts. However, you can still look for accounts with lower fees and preferential payment structures like Wirewand to protect your profits from being eaten up.
3. Cash Reserve Requirement
The third factor that sets high-risk business accounts UK apart from traditional ones is the cash reserve requirement. Some financial service providers hold a certain amount of your high-risk business accounts as a reserve or a safety net due to the risks of chargebacks and fraud. Such requirements are rarely ever part of traditional accounts, as traditional accounts are designed for low-risk businesses with far more stable and predictable cash flows.
4. Limited Financial Services
Lastly, high-risk businesses often face restrictions on financial options and traditional banking services due to higher risks associated with these industries. Where traditional banks often don’t welcome such companies for essential services, high-risk business accounts fulfil their business financial needs with more personalised services. However, these accounts still lack a variety of financial options offered mainly by traditional accounts, such as loans, favourable credit terms, etc.
Why Choose Wirewand’s High-Risk Business Accounts UK?
At Wirewand, we understand the unique challenges and requirements of high-risk businesses operating in the UK. Therefore, we provide them with a platform that caters to all their business needs.
With Wirewand Financial Services, you don’t need to worry about:
- Hidden fee
- Minimal account balance requirements
- Volume Restrictions
- Higher FX fee
- Payment delays
We assure you of smooth and transparent financial services for all businesses so you can focus on your business growth while we take care of your payment processing.