UK company with nominee director

[mrbraxo]

Hi everyone,
I own a UK company, I hold a non-EU passport and I'm not an EU resident.
I've been trying to get card processing services for my website but I got rejected by pretty much every payment processor available. Part of it I believe is because I don't have a EU presence and part of it is because I'm dropshipping.
I'm thinking about getting a UK resident nominee director. Is that going to make things easier? or will the payment processors still reject us because I'm the shareholder and UBO ?

 

[Sols]

It depends on which processor you're talking to. Visa and Mastercard have started requiring processors (the underlying acquirer) to ensure that merchants actually have a physical base of operation in Europe, at the address stated on the application. Some acquirers are stricter about this than others. It also depends on what it is exactly you're selling.

What are your (expected) monthly volumes?

Why have you not formed a local company and go with a processor available in your home country? What's the advantage of UK?

 

[mrbraxo]

It depends on which processor you're talking to. Visa and Mastercard have started requiring processors (the underlying acquirer) to ensure that merchants actually have a physical base of operation in Europe, at the address stated on the application. Some acquirers are stricter about this than others. It also depends on what it is exactly you're selling.

What are your (expected) monthly volumes?

Why have you not formed a local company and go with a processor available in your home country? What's the advantage of UK?

Ideally I want to get a UK based processor since they're more credible.
I'm dropshipping truck related accessories, expecting €5000 to €10000

It's impossible to start an online business in my home country (I hold a third world country passport)
I'm living in Serbia and I have a Serbian company too. But Serbia is not in the EEA or EU and that makes getting a processor very hard.

 

[JohnLocke]

What payment processors have you been in touch with and what was the outcome of the same?

 

[mrbraxo]

What payment processors have you been in touch with and what was the outcome of the same?

Braintree ,paylike, clearhaus, Cardinity, Hipay, Cardpay (Cyprus company) and maxpay rejected,
instabill said they can't work with UK companies,
handepay and ecommpay rejected because of my type of business (dropshipping),
a few other "not famous" payment processors rejected too
CCBill never contacted me after I applied (It's been 2 weeks now)
still waiting for a reply from 2checkout

ipaytotal and another Indian payment processing company accepted my application but I'm not confident to move forward with them because their reviews are not good

 

[Sols]

Some of those processors are stricter than others but you have spoken to one or two which would usually be open to non-EU merchants operating through an EU shell corporation, under the right circumstances.

The main problem is your volumes are low. You need closer to 100,000 EUR/month to be worth the risk. Serbia being considered an at-risk jurisdiction for money laundering is also a problem. Drop shipping is ripe for fraud and is seen as posing a somewhat heightened risk of money laundering/criminal activity.

You'll have a much easier time just going to a local Serbian bank and opening a merchant account there. They won't be as fast and competent as typical EU-based PSPs, but focus on growing your business.

If you find an EU processor that accepts you for your current volumes, the commercial terms (pricing, settlement, reserve) are probably very unfavorable, even compared to a local Serbian processor.

 

[mrbraxo]

Some of those processors are stricter than others but you have spoken to one or two which would usually be open to non-EU merchants operating through an EU shell corporation, under the right circumstances.

The main problem is your volumes are low. You need closer to 100,000 EUR/month to be worth the risk. Serbia being considered an at-risk jurisdiction for money laundering is also a problem. Drop shipping is ripe for fraud and is seen as posing a somewhat heightened risk of money laundering/criminal activity.

You'll have a much easier time just going to a local Serbian bank and opening a merchant account there. They won't be as fast and competent as typical EU-based PSPs, but focus on growing your business.

If you find an EU processor that accepts you for your current volumes, the commercial terms (pricing, settlement, reserve) are probably very unfavorable, even compared to a local Serbian processor.

I tried getting a merchant account at a Serbian bank, my volumes were too low and since I didn't have any processing history they didn't accept me.

Do you think I would have a chance with non-EU based processors? maybe some Indian or Turkish companies?

 

[Sols]

One thing to keep in mind with those types of processors is they often only accept your business because they need the processing volume to pad their miscoding business, where they hide gambling, forex, adult, and so on behind a facade of ecommerce. They often (but not always) get shut down and run away with money. I've seen it happen over and over again.

So they could work for you, but be careful. Watch every settlement and reconcile every single cent. Switch to an EU PSP or Serbian bank as soon as your business has some enough volume.

 

[mrbraxo]

One thing to keep in mind with those types of processors is they often only accept your business because they need the processing volume to pad their miscoding business, where they hide gambling, forex, adult, and so on behind a facade of ecommerce. They often (but not always) get shut down and run away with money. I've seen it happen over and over again.

So they could work for you, but be careful. Watch every settlement and reconcile every single cent. Switch to an EU PSP or Serbian bank as soon as your business has some enough volume.

Thanks for your help.
What do you think about setting up an entirely new UK company with British nominee director and nominee shareholder in the UK, then getting an EMI account and payment processor under the new company?
Are the payment processors going to ask who the UBO is?

 

[sanges]

What payment processors have you been in touch with and what was the outcome of the same?

 

[Sols]

Card processors are required to ask for the UBO. They operate under practically the same KYC/due diligence requirements as any provider of financial services nowadays.

One immediate concern with a nominee is if that nominee has been used before for card processing, and if that other company got blacklisted. If so, no card processor will work with you since they are all required to check with Visa and Mastercard blacklists. This could tarnish the reputation of your company across the entire network.

There are basically two ways to achieve what you want:
1. Lie to the processor.
2. Get the processor to accept your non-compliant structure.

I always stay away from #1. Option #2 requires volumes your business doesn't have quite yet, except for equally non-compliant processors discussed earlier.

 

[mrbraxo]

What payment processors have you been in touch with and what was the outcome of the same?

I included a list a few posts above, most of the well-known ones rejected me, some because of my residency and nationality and some because dropshipping is considered kind of high risk .

Card processors are required to ask for the UBO. They operate under practically the same KYC/due diligence requirements as any provider of financial services nowadays.

One immediate concern with a nominee is if that nominee has been used before for card processing, and if that other company got blacklisted. If so, no card processor will work with you since they are all required to check with Visa and Mastercard blacklists. This could tarnish the reputation of your company across the entire network.

There are basically two ways to achieve what you want:
1. Lie to the processor.
2. Get the processor to accept your non-compliant structure.

I always stay away from #1. Option #2 requires volumes your business doesn't have quite yet, except for equally non-compliant processors discussed earlier.

Thanks for the information. I'm gonna try my luck with some of the non-compliant processors, also I'm hoping I can find some good structure in the mentor group.

 

[JimBeam]

Hi @mrbraxo

Have you tried with this bank in Serbia:
https://www.societegenerale.rs/e-commerce/
Problem with being from Serbia is that the country is on FATF blacklist so any bank in the world would consider you high-risk and it they can find the way not to work with you - they'll use it.




There aren't many solutions to this problem but can be solved.

Please email me at [email protected] maybe I can help.

Thank you!

 

[mrbraxo]

Hi @mrbraxo

Have you tried with this bank in Serbia:
https://www.societegenerale.rs/e-commerce/
Problem with being from Serbia is that the country is on FATF blacklist so any bank in the world would consider you high-risk and it they can find the way not to work with you - they'll use it.

View attachment 694


There aren't many solutions to this problem but can be solved.

Please email me at [email protected] maybe I can help.

Thank you!

I have tried with societe generale before, no luck. I contacted you.

 

[JackieTsan]

Braintree ,paylike, clearhaus, Cardinity, Hipay, Cardpay (Cyprus company) and maxpay rejected,
instabill said they can't work with UK companies,
handepay and ecommpay rejected because of my type of business (dropshipping),
a few other "not famous" payment processors rejected too
CCBill never contacted me after I applied (It's been 2 weeks now)
still waiting for a reply from 2checkout

ipaytotal and another Indian payment processing company accepted my application but I'm not confident to move forward with them because their reviews are not good

as i've said many times, stay FAR from cardinity is a big scam... they block your money for ever.. they are regulated from their gonverment but with some research you;ll understand. I lost huge amount and i;m not the only one.. they just complaint to everywhere I post about them and they manage to get it down.. but its a big fraud.. better give your money to poor people,... rather than to this m@f1a