Having a small business nowadays requires a lot of support from various financial institutions. Not only a business account but a merchant one is also needed for stable performance. The best financial services for a small business include a lot of features that ensure its stability, security, and success when functioning. Today Genome explores the financial services, which types of them exist, who provides them, and which provider to partner with.
What are financial services?
These are services offered by institutions dealing in the financial industry and organizations to businesses and personal persons. There are various massive types of providers.
The first one is banks, their range of services supplies people and businesses with an opportunity to participate in the payment world. The second one is exchanging services that provide foreign currency. The third one is investment services which make it possible to input funds and grow them. And the last one is insurance companies that take care of risks.
This article is dedicated to banking financial services. Banking services deal with personal funds issuing payment cards, and bank accounts. And also, with business clients, enabling payment options via merchant accounts and ensuring other features to support the business activity. This article is focused on the best financial services for businesses, particularly small ones.
Types of financial services for small businesses
Before diving into the detailed typology of best financial services, let’s briefly clarify the difference between personal, business, and merchant bank accounts online.
A personal bank account is simple to understand: it allows an individual of age to participate in the financial system, performing payments, accepting funds, transferring money online, and more. Personal online accounts are nothing to be surprised about as most of us have them and know how they work.
The next level of banking is business accounts. By their functions, they are pretty similar to personal accounts, aging with payments, transactions, and funds acceptance. But on top of that, a business online account is advanced with special features for freelancers and companies, which we will describe later on.
And at last, there is a merchant account which is very different by its nature from the previous two. No payments can be made with it, no transactions; it has only one goal: to accept funds from electronic payments performed in retail stores or online. It is the key feature, as only a merchant account can be used to receive card payments, personal and business accounts can not have this option. When funds are accepted on a merchant account, later on, they can be sent to the business account of a merchant.
As we can see, there are basically three levels of operation with funds: personal, business, and merchant. The trick is they do function as levels. Without a personal account, one can not have a business account, and without them both, a merchant bank account online can not be issued either. And so, a small business would be in necessity of them all. Now we are ready to view types of financial services depending on the account level.
Account issuing itself is the basic option of a business plan
Perform payments
A business account enables making payments using card or card data to pay online
Accept funds
Funds can be accepted by the business account
Transfer money online
Online transfers just like payments are available within a business account, normally transfers include SEPA for the European Union area and SWIFT as the global option
Have an online account space
Years ago obtaining a bank account online would sound futuristic. Today though it is a basic feature we all expect to have
Security
Any bank account online must be secured with 2 Factor Authentication and other prevention measures
Support
Best banks for small businesses offer not only financial services to operate funds but also a good support to facilitate deals
Basic financial services: merchant level
Open a merchant account for a small business
Issuing a merchant account is also quite a basic feature when it comes to a small business’s needs
Payment gateway
A payment gateway is a web tool that allows a connection between a merchant’s eCommerce website and the payment processor, it is the first step in the transaction process
Payment processing
A payment processor is responsible for the transaction provision and completion on a merchant’s website
Analytics
Analytics enables merchant-related information about the account and operations
Fraud protection
Basic fraud protection is essential for any merchant account
Advanced financial services: business level
Instant transfers of money online
An instant transfer allows a person or in this case a business to send money skipping the 3-5 days of waiting, making them immediate
Multiple accounts within one digital wallet
Having multiple accounts within one digital wallet is one of the best financial services as it allows to divide the banking space, and operate it better
Currency exchange
Exchanging currency is essential for those businesses that offer services and products in multiple markets such as in the UK and the EU for example
Account levels
Account levels permit a business owner to set up exact roles for team members within one wallet and assign them different rights
Shared accounts
Shared accounts allow more than one person to operate the same banking space
Advanced financial services: merchant level
Accepting various payment methods
Today people want to pay for goods and services not only with credit and debit cards. Such payment methods as Apple Paye, Google Pay, and other alternatives are highly required, especially among the younger clients
Advanced analytics
Advanced merchant analytics allows not only to tack the business performance but also to improve it, relying on customized reports
Advanced fraud protection
Advanced fraud protection is normally AI-based and it prevents all potential threats to a merchant account
One ecosystem
Having an ecosystem means that all the needed accounts as personal, business and merchant are in one banking space and can be easily accessed, and operated
Who provides financial services for small businesses?
When it comes to opening a business account for a small business, only banks can offer these financial services, along with all the business-related features. But still, there are variations.
A small business can have a bank account within the classical financial institution with a physical branch. Partnering with a regular bank, an account owner gets all the primary benefits and even an online account in most cases. But yet, classical banking continues to stick to the bureaucracy, issuing accounts longer and with more documentation to be demanded. Often, they also require a higher fee for various operations and processes.
Classical banking used to be the only option possible before the boom of neo banking. Today opening a business account for a small business at an online entity brings most of the best financial services for a very little effort. Documentation is way more straightforward, the onboarding process is friendly, and support is just human. Even fees are less as there is no need to finance physical branches.
Finally, security-wise neo-banking is more advanced because it is a technology itself. So all the fraud prevention software and detection services are surely up-to-date.
When it comes to issuing a merchant account and having profited from merchant services, there are three types of financial institutions that can offer that: classical acquiring banks, payment service providers, and payment gateway providers.
An acquiring bank is quite an established institution in the banking terms which means that it is surely reliable, offers a lot of financial services, but at the same time quite oldish. An acquiring bank issues merchant accounts and provide payment services to a business of any size in both retail and eCommerce.
Just like classical banking, it has the same set of drawbacks: heavy on documentation and contracts, expensive with fees, and totally not friendly in its customer support approach. Yes, acquirers are the only entities that can provide financial services to retail merchants. For eCommerce businesses, there are alternatives.
A payment service provider is an online financial institution that supplies merchants with merchant accounts and payment processing services, along with fraud protection and other useful features for eCommerce. PSPs are quite innovative, which means that they are open and communicative, the onboarding process with them is easy and pleasant, fees are fair, and no heavy contracts are required.
A payment gateway provider is very similar to a payment service provider, except it mostly provides merchants with the payment gateway technology, which is a web tool that ensures transactions.
After all, we recommend partnering with neo banking institutions for business financial services and for merchant services – with payment service providers. Like this, you can be sure that your small eCommerce business is having the best deal and is treated in a good way.
What to watch out for when choosing a provider of financial services?
First of all, watch out for security and compliances. The security features offered by the provider are essential to your business and the provider itself. Regarding compliances, there are a lot of regulations that moderate how exactly the personal and sensitive data of a cardholder should be treated. These compliances must be followed precisely to ensure safety and trustworthiness.
Another factor to take into consideration is those services that the provider offers. Always keep in mind your business needs, and select advanced services accordingly. For example, if your business works with young people as an audience, you better implement some alternative payment methods on the website. Or, if you have clients abroad, you want to ensure their currency is accepted.
The last criterion is simply comfort. Ask yourself how comfortable it is to work with a specific provider, does it offer everything you need to make your business work smoothly? Does it have an established ecosystem that includes account levels? Is customer support helpful? Such simple things are often underestimated, yet in the long run, they make a big difference.
Which provider is the best for small businesses?
We recommend Genome. Genome provides the full ecosystem of personal, business, and merchant accounts* with a simple switch between them on the web page or the application.
Genome allows any client to have many accounts within one wallet, separating spaces wisely. It permits having multi-currency accounts in EUR, GBP, and USD, allowing an exchange at a flat rate of 1%.
For businesses, it has a feature of shared accounts and roles assignments, so any owner can manage the small business better and keep track of expenses and processes. For merchants, Genome supplies small businesses with payment systems* and payment gateways* for eCommerce websites, offering the acceptance of alternative payment methods*. It also provides solid analytic tools and advanced fraud protection Covery.
Also, Genome guarantees an easy onboarding process for an account. The simplified stages include application, personal data input, verification, and usage. No heavy documentation is needed, no long-term contracts, and no high fees. Genome ensures comfort and simplicity in every process and operation. Regarding customer support, any client can contact the help center by email or directly in the chat; the help comes quickly and efficiently. Check out Genome and find out which benefits it can bring to your business.
*Please note that Genome’s merchant services have been temporarily unavailable since September 2024.
We recommend Genome, the best financial service provider that offers a full ecosystem of personal, business, and merchant accounts within one digital wallet. Genome also proposes multi-currency accounts with EUR, GBP, and USD for any account type. And at last, it ensures quality customer support for a small business.
What are the most profitable financial services?
Well, first of all, issuing a merchant account. It would allow a small business owner to collect card payments on the eCommerce website. Then, the payment services themselves set up the payment flow. And also some practical tools such as fraud prevention services for keeping security at its best.
What are examples of financial services?
For example, issuing business or merchant bank accounts counts as a financial service. Setting up the full payment cycle on the eCommerce website as well. And such useful features as fraud prevention and chargeback alerts are financial services as well.
What are basic financial services?
Basic financial service is the one that is expected to be in any standard package of services provided by the bank or another institution. For example, accepting funds from a bank account is a basic financial service. Another example is to have a bank account online via the browser or in the application.
What does a financial service company do?
They provide services to people and businesses with an aim to facilitate financial processes. A financial service company can be a bank institution, exchange service, investment company, and insurance company. Any type shares interest and earns money from their offers.
