My startup dot-com project continues to plod along in the gap between university labs, assignments, tests and other studious miscellanea.
Today I spent some time getting down to the nuts and holts of payment systems.
I’ve done some work on this before, of course. Westpac knocked me back for their ordinary merchant account. I began to look further into third-party payment services. I have concluded that Australia is a terrible country for entrepreneurs who aren’t doing something ordinary.
To recap, these are my requirements from a merchant or payments facility:
- Allow me to bank with an Australian bank
- Provide multi-currency support. I need to be able to charge an amount in a currency and hold it in that currency — ie, it can’t be billed in USD and received in AUD. It has to be billed in USD, held in USD, then payed out in USD.
- Have some method of recurring billing where I do not hold credit card details.
I was chatting about this with other University Computer Club members today. Turns one of them is working on his own startup project (link removed by request) and has been facing many of the same problems as I have. His research found that for multi-currency support, you have to bank with NAB. Other banks let you run foreign currency accounts but won’t accept foreign currency credit card payments, which is one of my requirements. Apparently NAB will allow you to accept foreign currency payments and hold them in the original currency.
Apparently it requires a lot of harassing of NAB staff to make progress.
Then there are the fees.
NAB presumably realise that they’re the only one in this market. It’s $1200 to set up the account (vs $330 for Westpac’s AUD merchant facilities), plus various annual, monthly and transaction fees. On top of that you’ll want to use a payment gateway for the additional services they provide (like recurring billing), incurring additional fees.
For whatever reason, NAB don’t include foreign currency accounts in their online banking scheme. Unless you want to visit the bank in person to get a statement, and then type in all transactions into your accounting system manually, you’ll need to get a Windows PC with a modem to dial in to a special 1901 number instead. This is such bad service it makes my head hurt.
My fellow UCCer has said he is now seriously considering incorporating in Delaware. Opening and managing a US bank account may be cheaper and easier than doing it here in Australia. I guess I might have to do the same.
Anybody got tips on incorporating overseas? I’ve only just learned how to do it in Australia, after all.
Update: Inquiries at startup discussion site Hacker News have yielded more suggestions, including opening a bank account in Canada (the theory is that it’s a Commonwealth country but also next door to the USA) and also some advice that HSBC may offer what I need in Australia.
Update 2: HSBC don’t offer merchant services!