soth3d

Hi,

We are selling stuff online and for about 2/3th of our sales we are getting paid in USD to our (UK based) PayPal account. Unfortunately we pay for the most of the via bank transfers.

I am looking for a way to withdraw USD to bank account and I found out that we can actually add US bank account to our UK PayPal. I called HSBC (that we have banking with) and after some struggle I been told that in USA I can open only personal account with them, and I cannot use it with PayPal. "HSBC policy, PayPal only for business accounts".

So now, I am researching possibility of opening bank account by myself. I can fly to US if that is required. Preferably not, but it will give us huge savings.

PS I am worried to open personal account as it might attract attention of IRS, or other "bad guys". (even that I wont be doing anything illegal)

markcst

First of all I assume you are trading in the UK as a legitimate business with a registered business address etc.

As most personal bank accounts need an occupied local address as a minimum, and most business bank accounts need a local registered business in any country this is your first hurdle.

You'll find that money laundering laws will make this difficult for you to do anything else. Ebay/paypal is a typical instrument that the US and UK have laws for.

The fact you are using paypal, suggests you don't or can't (due to size, method of sale or legal entity) use one of the other business to business payment services which would reduce your currency payment exposure.

petitefrancaise

Talk to someone slightly more knowledgeable at HSBC.

They should be able to offer you a separate account for your business where you "store" your US$ until the balance reaches whatever amount you and they decide on. Then you exchange them for £ at a guaranteed exchange rate .

Talk to their online business advisor about it.

Pulaski

Can you legally open an account? "Yes"

Is any bank likely to let a non-resident open a small business account? Probably not. There is too much admin and paperwork, and too many compliance issues to monitoring/overseeing your account for most banks to open the sort of account you're looking for.

soth3d

Thank you for all answers.

I will try to find out more about personal account that can be open for a tourist / non-resident. I could get virtual address and use it as confirmation as well.

@markcst I prefer sticking to paypal, as we have customers all around the world and paypal is seen as very safe way to pay.

@petitefrancaise It is Paypal issue, customer is allowed to withdrawal money in local currency only.

markcst

Hi again so I've done some digging. Its seems genuine Paypal Business accounts have some pretty good rates of exchange and service charges. As low as standard B2B credit card charges (less than 2%) and fixed fee transaction charges of 30 cents per transaction.

So if you are a genuine UK business with a Genuine UK Business Paypal account, you should be benefiting from some good rates. Market matching rates.

However if you are using a personal bank account, with a card attached, or personal credit card, rather than a business bank account, you are going to get stiffed.

soth3d

Yeah, the problem is not regarding the rates, the problem is that I can withdraw only GBP... so even that my expanses are in USD, because I am paying via wire transfer, not the PayPal, I have to exchange USD from I received from my customers to GBP (when sending money to my bank account) and to USD again (before making wire transfer)...

It is a lot of money if I have to do it for $10-30k a month.

petitefrancaise

Sounds like Paypal doesn't fit your business model.

A couple of things to think about:
find a payment method/gateway that will allow you to keep US$ in an account. Set up an A/B test on your website to see if the dropout rate with the new payment system is different to what you currently have(paypal). You may find that it isn't any worse - I'm not a great fan of paypal because I don't get the credit card consumer protection even though it's going on my credit card linked to paypal. Talk to your bank HSBC and see what they suggest. Many years ago they had their own payment gateway which was hideous to administer but I had the ability to keep dollars/euros/sterling separate because I had to pay expenses in those currencies.

Set up a separate part of your website for US visitors which leads them to a different payment gateway. One they can click on with a US flag for example and gives them all the prices in US$.

Negotiate with your suppliers to pay them in £. Determine a set exchange rate for the year/6 months that you and they are happy with.

DON'T, DON'T, DON'T use wire transfer. That is throwing good money after bad. Set up an account with a foreign exchange company that is eligible to do business in the state where your suppliers want to be paid. Most of us on this forum have to transfer money around and use worldfirst, currencies direct et al.

Be interested to know how you get on.

Pulaski

International banking is expensive, and so you're going to pay fees and exchange rate spreads no matter what. There are ways to avoid the back and forth with USD, but you'll pay business banking fees. You could probably open a dollar account in the Cayman Idlands, or even the Isle of Man, or Channel Islands - and you'll save the cost of converting money back to dollars, but have to pay for the account and any bank services you use.

zzrmark

I don't know whether the above method would work.

Until recently I had a UK bank account with a UK registered address and a US bank account with a US registered address both active on my Paypal account, which worked well for me...until my US registered address changed three months ago.
When I put the US account on my Paypal account, over a year ago, I could not do it through the usual electronic channels and had to converse with a representative on the phone but at least they did it.

When I went to update my US bank account's registered address, this last October, (post the separation of Ebay from Paypal) it turns out that their terms of service had changed and that in order to use a US bank account I had to set up a new Paypal account with a different email address. Apparently they no longer allow a user to have bank accounts registered in different countries on the same Paypal account.

EDIT: To clarify the last sentence... Apparently they no longer allow a user to have bank accounts registered to addresses in different countries on the same Paypal account

thinbrit

I have a PayPal business account for a small side business and couldn't find the rates you quoted. The lowest (quoted) I've seen is 2.9% plus a 30c transaction fee, which appears to be the standard for low volume handling (last time I checked - PayPal, Intuit, and Square all ran around 3%). Do you have a link to the rates you mentioned?

My 'main' business operates using a conventional payment processor who charges a flat rate fee for all credit cards including promotional cards. We average 1.5M per year on cards, so even a tiny rate change makes a noticeable difference. We've tried all the big and small processors, having most recently just returned our BoA clover system (after numerous price hikes) for a merchant processor who specializes in veterinary practices. They are not perfect, but have great rates. If I could get similar rates (like the ones you mentioned - less than 2%) I'd use PayPal instead. PayPal has some good APIs I could use to hook in to our veterinary practice management software.