Tag Archives: banking

An International Banking Solution for Thing 1 and Thing 2

Back in 2010-2016, when I was advising Australian companies to setup in the UK on behalf of the City of Greater London, one of the most common problems that Small Business & Startups had to deal with was Banking.   Two things:A Picture of Dr Sesuss Thing 1 and Thing 2 thinking about Banking

  1. Businesses needed a local bank account in a local currency for their business, so that they can pay people and bills fast plus reduce the Foreign Currency Exchange cost.
  2. Small Business generally wanted to put a minimum amount of money in the account and top it up fast when needed, to help manage cashlow. They don’t want to be penalised for lots of small transactions or suffer delays.

Two problems though for these Small Businesses:

  1. Even global Banks aren’t interested in recognising the business as a single entity in two jurisdictions. The Australian company is Customer 1. The 100% owned subdiary in the UK is Customer 2.  You need to endlessy “re-prove” who you are.  Many countries have much more vigorous money laundering laws, so setting up a business account was a much bigger hassle. British Banks had a tendancy to ask for original documents, not copies,  proving all shareholders and Directors who were they said they were, running up through the parent companies.
  2. Their Foreign Exchange was slow and expensive.

Sadly, despite the fact there was some interesting products out there amongst the big banks, at the end of the day I couldn’t recommend anyone as the products weren’t for small business or individuals (of the non-high net worth individual kind). Not really my problem though, and I couldn’t change the way it was.

Of course there was foreign exchange dealers around who sped things up and reduced the cost, but they didn’t solve the bank account on the ground in the other country problem.

I lost interest in 2016, after leaving London’s employ.

Fast forward to 2019. I’m now in Washington DC, setting up an AI business for Real Thing Real Thing Entertainment LogoEntertainment, and kicking some goals . Foreign Exchange and Banking are becoming real issues for me again.  My problems:

  1. I need US$ cash readily available for incidentals, so therefore I need a US$ bank account here, to get it without paying a bomb.
  2. I need to be spending in US$ on my credit cards, not having it converted back to Australian dollars at a high rate plus an international transaction fee tacked on (thanks CBA).
  3. I need online banking solution for the business that I’m not paying an additional fee for (thanks Presidential).
  4. I need a brick and Mortar bank that my US customers are comfortable paying into (remembering that checks are still widely used in the US and the internet is viewed with mistrust in plenty of quarters, so Fintech raises eye brows).
  5. And I need a better solution for my wife, so she doesn’t have to be totally reliant on me for cash (she doesn’t have a Social Security number so has been knocked back by the banks here).

Consequently, I ended up doing the diving back into reviewing banks and products. What I came up with fascinated me, and has me rethinking how I do all my  banking. I ended up choosing a product called Transferwise  for both the company and myself.Transferwise Logo

  • The test foreign exchange transfers I completed,  ended up costing me on average about 5% less than the banks and the funds arrived a day quicker (4 days v 5 days).
  • I discovered I could hold balances in a variety of currencies at Transferwise. And each of these currencies appears to be a bank account in the country of the currency. Changing funds between currencies is done at the mid market rate (much lower than the banks) and happens instantly.  So effectively I now have a mechanism to move currency between countries almost instantly.
  • I have been issued a Mastecard Debit card , which allows me to buy things locally in US$ and withdraw US$ cash from an ATM, paying a small foreign card fee – when I need cash here.
  • It has a feed straight into our Xero accounting system so the bookkeeper is happy.

The best thing though is that with Transferwise,  my  wife could quickly get a US Bank Account, without having a social security number!

Of course the account doesn’t generate me interest or points, but it gets me what I mostly need and I still have an AMEX for airfares and accomodation (with points, and lounge access).  I still had to setup a bricks and mortar bank account (I chose Chase) because my Government agency customers prefer that type of bank, plus I will need merchant facilities downstream.   Chase was highly recommended as the small business bank in the US, but it doesn’t do Xero feeds properly as yet.  However Im only expecting to do a a couple of transactions a month with it and no foreign exchange, so no biggy.Chase Bank Logo

Setting up the Chase account took only 90 minutes in branch because I had collected all the documentation first. The Transferwise setup took 10 mins online and a scan of my passport.

If I need to spend time in London in the next couple of months (highly likely) I can spin up a UK Currency account in under a minute and get cash locally at a low transfer rate.

Sad I can’t go back in time and recommend this to the hundreds of small business I met whilst at London & Partners.

Still, being stoic, I’d have to say Im  Winning.

Everyone can be in business

About once a month I go to the movies with a mate of mine, a kind of very tame boys night out.  Anyway, whilst we were having a beer after the movie he mentioned to me that he had run into a women who owns a couple of hair dressing salons in the UK.  Apparently she is able to travel around as much as she likes, but still has a vice like grip on her businesses.  Using webcams, a web integrated accounting system and Skype, she’s able to monitor almost every aspect of her salons in real time from her home, or from a hotel room from another country.  How cool is that?

Which got me thinking about how virtual I could make a business, and here’s what I came up with.  A business setup for under $1,000 , that can be created without leaving the house, and run from anywhere I have an internet connection.

THE PRODUCT
My products will be the books that I am currently writing on business development. If my product was soft toys or say specialized lamps, I would change the warehousing arrangements.

THE MARKETING
Firstly I am going to buy a domain name to develop my own brand and make it easy for people to find my products, something like www.brendans-brilliant-business-books.com.au (maybe not that one actually). I can buy the domain name on the cheap at Intaserv or a bit more expensively at Melbourne IT .  Intaserv,  is the cheapest for com.au domain names but their domain name management tools are no where near as easy to use as Melbourne IT.   You get what you pay for, no surprises there.

The products will be advertised online using campaigns purchased from Google Adwords and via the Sensis site .  Of course my online shop will be Search Engine Optimised so it can be found easily.

I will keep a record of what’s happing and run email campaigns using a web based CRM (Customer Relationship Management) system.  The one I have chosen in SugarCRM as; Its Open Source, which for me means its more robust and free.  The trade-off though is that the documentation can be crappy.  SugarCRM requires the same supporting technical environment as my shop.

For the online shop, I am going to use OSCommerce.  This is another Open Source product available at Source Forge or at www.oscommerce.com Again its powerful, robust and free.  It also uses the LAMP stack (Linux operating system, Apache webserver, Mysql database & Php language) as its operating environment.  I will connect the shop to my bank account using a merchant account I will setup at paypal

ADMINISTRATION  AND LOGISTICS
I going to create the company online at a company registration site such as www.incorporate.com.au  Sites such as this have a web based wizard that walks you through all the steps required then sends you the company register as a pdf document once the bill is paid.   The end result is a not big sexy leather look binder, but I’m not looking for that anyway.

The shop and CRM system need to be hosted somewhere.  I’m going to choose someone like Quadrahosting Which have customer control panels to make life easier.  For around $150 a year I can get around 20 websites hosted and my email chucked in as well.

Since I have purchased some web hosting that comes with email, I can use the control panel at Quadrahosting to setup a whole lot of email addresses that forward email to my gmail account.  I can then get my email, anywhere in the world, that is sent to addresses such as accounts@brendans-brilliant-business-books.com.au and sales@brendans-brilliant-business-books.com.au

Now since I want to be as virtual as possible, I don’t particularly want to hold stock.  I’ve decide to use an online book sales site called www.lulu.com to layout and print my book on demand.  I simply (warning : loose use of the word simple) upload a word file, and select the design and title.  I believe a 100 page hardback will cost about US$16 to produce for a
print run of one.  Lulu will effectively become my on-demand warehouse, printing and sending out books as I want.

My banking is of course easy to setup online.  Many companies now have the internet only account.  Its normally an interest paying, zero fees account that you can tack onto another fee paying account you have.   I tend to use The CBA as my other accounts are there and I like suing the one net banking interface to manage my affairs.  And as mentioned before I will also setup a paypal account that will be the gateway between my bank account and my shop.

Since I want to have a local landline number (rather than giving out my mobile) I am going to use skypeIn .  I can have a local landline number that I can forward to my mobile, or simply leave it as an internet based voice mail system.

Now I can simply have my home as the postal address or the traditional Post Office Box.  However there is now a large number of virtual office suppliers in the market.  I can have a Collins St address for as little as $10 per week.  Companies such as Silent Partner offer you the ability to have that address and rent meeting rooms on as ad needed basis.

To keep track of what’s going on I need a good Accounting System that I can create GST compliant invoices with.  A quick search reveals a number of Open Source (free and configurable) web based (accessible anywhere) solutions, including  SQL Ledger .  There are also some interesting paid solutions for nominal amounts such as SAASU at around $250 per year.

Finally since things are now working well and my overheads are minimal, I am profitable.  Therefore I need to be paying tax (both income and my GST). Just as well that he ATO allows me to do everything online at www.ato.gov.au

My estimate is that I have invested about $800 (before marketing) to get the virtual business up and running and worked for maybe 2 days in total over an elapsed time of 2 weeks.

So…….

There are lots of other options for doing all of this.  For instance if I was selling art or t-shirts I would probably use Red Bubble as my shop and warehouse, if I was selling services I probably wouldn’t use a shop,  maybe I would use a free online content management system such as Joomla to run the website.  The principle is the same though, there is now no reason (investment, physical space or time available) why every technically literate Australian can’t be an entrepreneur on the side.

Who goes there?

Once in a blue moon I check the Churchill Club’s bank transactions online. A couple of weeks ago I did this, but after a while I was automatically logged out. When I tried to log back in again, I got the password wrong and it wouldn’t let me log back in. Sound familiar?

I then rang the bank. A call centre operator asked me how many business internet accounts I had. I answered “two”, but apparently I only had one, because my online credit card account wasn’t a business internet account, but a merchant services account.

Apparently this mattered to the operator. I was advised I would have to go to a bank branch to have the account unlocked; the call centre could ask me the question once and I got it wrong. Sound familiar?

After I showed my ID at the branch, I was told the account would be unlocked later that day and that I would be contacted. Of course I didn’t receive any call, and had to go back to the branch the next day to repeat the process. Finally, my accounts were unlocked.

This got me thinking: what is the point of this security? I am continually told it is to protect me, but I am beginning to believe that’s completely untrue.

I now have about 10 different banking passwords and account numbers and perhaps another 50 or so general passwords (such as the one for my SmartCompany subscription). Each organisation I deal with has different rules for their passwords, including:

  • The minimum number of digits.
  • How often the password must change.
  • What characters are OK to use (numbers letters, special characters).
  • Whether I can use a previously used password.
  • Patterns are not allowed (such as my surname).

My world is now so complex that I now have a standard set of different secret passwords that are used, just so I can manage my accounts. So for each individual account I have good security, but overall my security is massively reduced because once you know one of my passwords, you can easily access any number of my accounts.

Therefore I am compromising my own personal security just to cope. But the banks don’t care because if I compromise my security by reusing passwords, it’s my problem not theirs. So they are protected.

I heard a great example the other day about the staff of a national organisation, who have to change their password every month and must use a unique password with a minimum of 5 characters. To cope with these rules more than half the employees in March this year will have the password “mar07”. Where is the security in this?

But back to banks. I would suggest that bank security for online accounts is much more about protecting the bank than about protecting customers.

I note that when you are issued your new credit card you are told “you must sign the back for security”, but since you are not responsible for any debts until you sign the card, the security they are concerned must be theirs not yours). No wonder when someone found Lloyd Williams’ platinum credit card on the beach the other week, it was unsigned.

Anyway, I used to use notes in Outlook to store my passwords, but I have come to the conclusion that this is too insecure because others can look at it, plus it’s open to being accessed by evil software.

I have instead downloaded a program called Password Safe to manage my accounts and passwords. Password Safe is free and secure and user-friendly. It comes from http://passwordsafe.sourceforge.net/ I haven’t solved all my password problems, but at least I have improved my own security.