The reasons are as follows:
- Save on collecting cash-on-deliveries in local currency and avoid unnecessarily high fees to courier companies These additionally work with central exchange rates on which you can lose money. “Most Europeans still prefer to pay upon delivery, so cash on delivery is something you'll deal with a lot. Especially if you are a new online shop and the target audience does not see enough references,” points out Helena Luxová, consultant at Meriglobe
- Save on payments from your local payment gateway. If the money went into your Czech or Slovak account, the banks would charge fees on both sides (not to mention the automatic currency conversion at the central exchange rate). The furniture search engine FAVI, for example, has a local account in all the countries where it operates. “Currently in the Czech Republic, Slovakia, Hungary, Romania and, more recently, Croatia. Many clients prefer to pay by bank transfer in local currency and for this case it is preferable to have an account in a local bank,” explains FAVI CEO Jan Zajíc.
Most Europeans still prefer to pay upon delivery, so cash on delivery is something you'll deal with a lot. Especially if you are a new online shop and the target audience does not see enough references.
- Allow customers to pay directly by bank transfer. “You will thus simplify purchases from you. Otherwise, if you use the Slovak IBAN for payments in Slovenia, for example, the customer will start to speculate: Is it a local or foreign company? Why do I have to send money abroad? Won't I have a problem with the complaint? We always tell our clients: “If you've done a good job of localizing your website, the mention of a foreign account in the payment terms may surprise a customer. And ultimately discourage them,” says Paweł Bilczyński, Sales Manager for Poland at Expandeco.
- You will increase credibility and, ultimately, even conversions. This is related to the previous point In Silvia's experience at Expandeco , shoppers need to consider whether they want to pay unnecessary bank charges: “Banks are charging fees on both sides and currency exchange takes place. For goods costing €10, customers will think carefully about whether they want to pay another eight in fees.”
- Simplify your refunds for complaints. A transfer will be very fast, without the burden of any fees or exchanging rates.
- You will facilitate the establishment of partnerships. Some courier companies, payment gateways and other service providers require you to maintain a local bank account.
- You make a friendly move towards customers in a new country. When you simplify their shopping experience, you gain their trust (in other words, you will not arouse distrust in them), and increase the likelihood that they will buy from you (that nothing will deter them from buying from you).
What do you need for this?
The conditions for opening an account vary from country to country. Each country, and even each bank, has specific requirements and internal guidelines to follow. The whole process takes, according to Expandeco's experience, one to two weeks.
The following documents are most frequently requested by banks:
- Extract from the Commercial Register (not older than three months).
- Trade license.
- Confirmation for VAT registration, etc.
- All officially translated and notarized.
What is FAVI's experience? “Different banks in different countries requested different documentation to open an account. In Hungary, for example, we were easily able to open an account with the help of a Czech branch of the same bank For some institutions, it is again more complicated to add Internet banking access for other colleagues or to provide automated payment matching,” says Jan Zajíc
Expandeco TIP: How to choose a bank? Try yours first. “Most banks and banking groups operate internationally and have local entities. Ask at your branch if they can help you set up an account," advises Tomáš Vrtík, :and feel free to try multiple times. Ask your bank if you are an interesting and important enough client for them, if they are willing to go to put in the effort with working with you If your branch is in a big city, say Prague, Bratislava or Brno, there is a high probability that the answer will be yes.”
How does the opening of a business account abroad proceed?
“The bank verifies every foreign company. Always want to know the reason why you want to open an account in a given country. Most of the time you just need to say you are an online shop and you want to have an account for easier, faster and more cost-effective transfers," describes Paweł Bilczyński from Expandeco. Most banks want to know the name of the online shop to see what the prospect is like and how trustworthy it is, if there is visible activity on the site, etc. According to Helena Luxová, in Germany, for example, banks also ask detailed questions about where the payments will come from and where you will be sending the money. “As a rule, all of this is done online, documents are submitted by email. We communicate with the bank on your behalf," Silvia specifies. Sometimes the managing director has to come in person and in other cases the bank will request additional documents.
“This is followed by the approval process itself, with banks reserving the right not to open an account without giving a reason. It's good to know, but don't stress. This happened to me once with a client,” Silvia explains. Once approved by the bank, it is followed by a personal visit to sign the contract. “With clients, I go to the bank in person and always make sure everything is ready. The bank advisor will usually still ask for the date of birth, the mother's maiden name and will want to see a valid ID card. This is followed by a signature,” concludes Silvia, who helps Czech and Slovak companies open accounts in Poland.
Expandeco TIP: Please note that in some countries, such as Romania and Bulgaria, the establishment takes longer. Tomáš Vrtík advises finding out the specifics of a given country from other Slovak and Czech online shops, which are already doing business there: “It's no secret that our e-commerce community works reliably in this, everyone shares know-how and many of the - often the most important - information you find out first-hand.” In Poland, for example, a one-off fee of PLN 1,000 (approx. EUR 223) has been introduced in the past six months, which is paid to the bank by every business entity with its registered office in another state.