I need a $ bank account

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We operate an online business selling products in the USA but are struggling with our customers having their transactions declined as we have a UK bank account. We are having difficulty finding a bank account that will give us a real $ account that the US banks wont decline transactions through. What we need is to be able to open a $ account with USA bank but again are struggling as we are a UK company with a UK address and don't have an American subsidiary or address. Our current UK bank can't help unless we have a turnover in excess of $500k which is not feasible for us to achieve. Has anyone else had this problem and come up with a solution?

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Mike Hunter, on behalf of betterlanguages.com Ltd. in Nottingham.

Hi, I'm puzzled by the need for a US account, is it not possible to use an online payment service such as PayPal? Its also worth checking whether there are any specifc requirements from the IRS to verify that you are not liable to US tax.

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Steven Walters, on behalf of Western Union Business Solutions in Yorks And Humberside.

Morning, this is a common hurdle businesses experience with their bank, in fact even at $500k the banks can be less than helpful in providing a solution. I work for the worlds largest non bank provider of international payments and we offer a solution that negates the need for a $US account, can I ask approximately what turnover in dollars and other foreign currency do you have annually, and how many transactions is this spread over?

Thanks Steve

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Thanks for the suggestions.

We are currently using Sagepay. A small proportion of US customers receive fraud alerts when they try to order from us online, and we have been told this is because our bank account is in the UK. This sort of thing causes no end of problems, and the last thing we want is our carefully honed online profile being undermined by posts on US forums saying steer clear of these guys.

Paypal is an option, but we don't know at the moment if this would solve the problem, and Paypal has its own problems (both for merchants and in terms of customer perceptions).

We don't sell that much at the moment, maybe $5K with average transaction value of $70. However this is a self-fulfilling prophecy - if our payment systems worked we could sell *much* more!

@JohnHall We are following up the suggestions on that thread, which includes some other possible banks to try, but a UK-based $ account is not the answer. We have been very surprised at how hard this is. We are trying to do our bit to help UK exports by selling in the USA, and we assumed this would be a well-worn path with well known guidelines and best practices.

There are wider issues as well, such as the tax issue which has already been mentioned (and we regard as important, even if the likes of Amazon and Google are not paying UK tax!!). Another issue is the US "BBB" (Better Business Bureau) - usually regarded as a source of junk mail in the UK but quite significant in the US. They won't let us register either.

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Keith Stringer, on behalf of kps Businesshelpline in LL28.

Hi,

If the values aren't great, then PayPal can be a short term answer. I had problems with independent retailers paying me through the bank, even though we got a Lock Box in USA, so we switched to PayPal. From my experience, the perception of using this service didn't damage the company's image. The bottom line was that the customers just wanted the easiest ( and cheapest) way to pay.

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The best solution is a company called Smart Currrency http://www.smartcurrencybusiness.com/ they give better rates than a bank and charge a lot less for transfers and it can all be acheived online!

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@AlanBriggs - Smart Currency seem to be just currency brokers, I don't think they have anything relevant to international banking.

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Trevor Charsley, on behalf of AFEX in WC2N.

We can understand how difficult it is setting up abroad and online…We would suggest using an international payment providers US bank details. The funds can then be sent directly to the US bank by your clients and easily exchanged and sent onwards to you in Sterling. US banks can charge a fee per transaction and an annual banking charge. On top of that the exchange rate you receive will not be under your control. The above solution allows you to save the $’s up until you wish to receive the £ as well as receive a wholesale rather than retail FX price. You will also not be charged for using the services in the US. This is the type of service we at AFEX have been providing since 1979. FSA regulated and HMRC accredited.

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Mike Hunter, on behalf of betterlanguages.com Ltd. in Nottingham.

Hi from my understanding of the small individual transaction values, PayPal or similar as I originally suggested sounds ideal. We receive payments from US customers via PayPal, and it doesn't seem to give a negative image. The only issues are that the service isn't "free", they make a bit on exchange rates, and charge fees when people pay by credit or debit card, typically around 2.5%, you clearly need to factor this in to your costs. Depending on your target customers, attitude to PayPal or a similar service is often positive, particularly amongst people who shop online regularly. Last time we looked, for making payments bank transfer becomes cheaper for us at around $500 per transaction, this will of course vary depending on the individual bank.

I don't have any connection with PayPal, apart from as a satisfied customer!

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Rui Nobrega, on behalf of Fidelis Market Consultants in OX1.

Dear YO42,

If you have an annual turnover of less than $500K, then you have 2 options, one that will cost you on fees and rates of exchange:

I see that a few alternatives were mentioned above including Paypal and a Brokerage house. These would have been mu suggestions, Paypal will smash you on the rates of exchange and the fees when receiving payments, a normal broker would try (for the sake of having a new client) gather all your payments in and build it up and convert at your convenience at a much better rate. However, the danger is that when you're not looking (believe me, they know when this is happening) they will actually become more expensive than paypal or any other bank on the High Street.

So what to do? You should take advantage of the crisis in Europe to benefit from it. Call countries such as Portugal, Greece and Italy and open an Euro account as well as USD account. Once this is done close the Euro account and simply run the USD account should you wish.

I have actually opened my Business Euro account with Caixa Geral de Depositos in Madeira Island, they will only charge you a standard quarterly charge of around €10.

Compared to the UK where Barclays wanted to charge me every time money was credited to my account, quarterly charges and a huge charge on outgoing payments and yes I do well over 500K per annum, but still not worth it. When it comes to USD thigs get even crazier.

As you may know there is no such thing as BACS in the US, everything runs via a similar system to CHAPS. Barclays actually wanted to sit on my funds for a day or so and for the type of business I run, this is mad!

European Banks are willing to attract more clients, and they are actually prepared to offer great deals and everything can actually be negotiable. Give them a try and see how it goes...

For the amounts you do, believe me this is the best option!!

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Trevor Charsley, on behalf of AFEX in WC2N.

Dear All, Just in response to the last reply regarding brokerage houses. I would suggest that
the main point about dealing with any institution when receiving or sending funds around the world is trust. In this case to engender trust I would suggest that you find a reputable broker or bank and enter into a fixed rate agreement with them. If they do not want to do this then you have your answer as to whether to use them or not.
All the best.

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Phil Bennetts, on behalf of Sat Worldwide in RG9.

HSBC will give you a dollar account. Then let the funds build up and use a currency broker like us to exchange from USD-GBP. So you send us the funds in USD Aand we pay GBP bank into your GBP account. You will get a far better rate of exchange = bigger profits

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Various respondents have suggested currency brokerage, but that is not the issue in the original question. The problem is a high rate of declines on our online transactions because US card issuers see us - or rather our payment gateway and bank - as "foreign".

Sometimes as many as a third of transactions with US customers are failing on the initial attempt. This means we lose sales, and we annoy customers, who then tell their friends how bad we are etc. (For UK sales the rate is about 10%, which is normal).

I think those responses which have suggested Paypal are probably on the right track, because US card issuers seem to see Paypal as "American" and therefore are more likely to let the transaction go through.

A US dollar account with a UK bank is not likely to help, as it is still foreign to US card issuers.

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Phil Bennetts, on behalf of Sat Worldwide in RG9.

If you can open a PayPal US Dollar account. Then open a UK Bank US dollar account. Then transfer funds from your Paypal account into your UK Dollar account. That way you can get the best rates of exchange from a Currency Broker. This might be an option ?

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@Phil Bennetts - please see previous post. We are not interested in exchange rates.

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Trevor Charsley, on behalf of AFEX in WC2N.

Friends,
I saw a similar question on another social media website and the response I saw from
Philip Creed at FSCom Limited was "As a compliance consultant with the deliverable FX space we have had a number of clients experiencing problems, this due to US law which does not allow any foreign located MSB to contract with client "physically located" US. This legislation in addition to the problems around MSBs and the US gaming sector has reduced the banks appetite for any payments to/from the US. In order to become authorised to trade with people physically located in the US you must register with the Financial Crimes Enforcement Network (FinCEN) on a federal level and on a state by state basis to the relevant state authority. The bond requirements can be considerable which has reduced any appetite for UK MSB's in our experience to actually undertake this."
I have checked with Philip and he is happy to talk with you if you wish.
His contact details can be found via Google/linkedin...
Hope it helps.
Trevor

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