PSP Angels VIKTORIA SOLTESZ Founder & CEO of PSP Angels
Crypto - friend or foe? Let me tell you a story. My old client, deep in his 60s, being the CFO of a wellrespected and very traditionally managed shipping company, called me one day, and asked for my help. “Viktoria I can see you are very into Bitcoin” he said “I want to introduce Bitcoin as a payment method. Let me know how I can I open that Bitcoin thing….you know, the vault…the bank account” “The wallet” “This is how you call it? Yes that. How does it work” I got it. He wanted to keep up to date with the latest trends. Even though it was clear he has no idea about blockchain I respected his ambition and curiosity for the new trends. “How many of your client wants to pay you with crypto” I asked “None” “So why do you want this” “I want to be in the future” More and more clients want to follow the trend because of FOMO but is it really a good thing? While we advertise mass adoption, how can be sure that we don’t lose more than we win? We all need to maintain trust and great communication with our bankers as nowadays a good and reliable bank account can be our most valued supplier. So first, we need to consider their take on our new innovation. And if they don’t follow suit, we might be the one who draw the short straw. My company, PSP Angels is a high risk payment consultant company, which means we deal with higher risk clients who usually have difficulties to get accepted by the traditional payment and banking methods. It’s a no brainer that many of these clients want to take advantage of the ease, lower fees and speed of the new technology. Many times its not necessarily a choice, but more like a force. Turning crypto into actual fiat, on a high street bank account can be a real hassle and finding a bank which is “crypto friendly” might be an expensive challenge.
GAME CHANGERS Issue #39
So, we would think, banks are here to get the blame by not being up to date with crypto. We might also believe, instead of helping, they seem to make life more difficult for not adapting a new technology and refuse to enter a new world of blockchain. But are they really? We must remember, banks are also businesses, and they need to balance the cost with their benefit to present profit for the shareholders (which can be easily your parents via their life insurance or pension funds) Crypto transactions are a hot topic for compliance, simply because many banks still don’t have the tools and means to check the source of funds and make sure that the amounts, which are flowing through their accounts, are indeed from a credible source, and taxed accordingly. Additionally, everything is changing on a daily basis when it comes to regulation, so it’s almost impossible to keep up to date with the news where crypto is legal, up to what amount, taxed (VAT-d even!) or in any other way legit. This means, if a bank or a payment institution reject your crypto cashout or block your funds, this means you cost more to them than you benefit via your banking fees. But how does it affect my CFO client? Let’s say he opens a wallet. There might be some of his clients who are a bit more tech savvy and transfer payments to this wallet. Let’s say his accountant also understands the flow and turns this to fiat in an affective and cheap manner. Let’s also say this crypto is less than 0,5% of this yearly income. Does it worth it? Maybe not. As per my experience, even if the bank accepts the funds (when he transfers from crypto to fiat and want to cash out from the exchange) there is a good chance that this one transaction might affect his existing his banking relations in an adverse way. Now his company might be placed to a higher risk category due to this “crypto trading activities”, and even there is only one small transaction, traditional banks might charge higher fees for him, reject his credit request or even close his account. This can make a mark on his credit history and lead to further rejections in the future.
