Genome is an Electronic Money Institution, specializes in online financial services.
As the world transforms rapidly, especially after COVID-19, traditional institutions change faster too. Let’s take a look at the recent stats:
In 2020, the number of e-commerce transactions made with digital or mobile wallets reached
They are called “challengers” for a reason and they are to take a share from traditional banks indeed. The venture capital in this segment is
Neobank is a term for banks that exist only in digital form, as an app, web app, or other software solution, and doesn’t have any physical branches. It can work in several jurisdictions and is usually not limited to a single country or region. Sometimes “neobank” is used as an umbrella term for all apps with financial functional, like money transfers, but that’s not correct. Since not all financial apps have bank licenses or partnerships with physical banks, technically they can’t be considered as neobanks. Some neobanks to consider for businesses:
Electronic money institutions (EMIs) are certified to open e-wallets to their customers and have the right to issue electronic money. Although it looks very much like mobile banking or neobanks, it is not. EMIs can also potentially engage in payment services, cash withdrawal and deposit services, payment executions services, remittance services, direct debit or credit transfers, account information services, and payment initiation services.
This list of “complementary” services into which the EMI can potentially engage strongly depends on the type of authorization as certain activities may be restricted. For instance, their main difference from banks is that they can't lend or invest clients’ money, and the sums of money over 100 000 EUR stored with them are not insured.
If neobanks and EMI’s don’t have a banking license, they partner with physical banks. This allows for offering full banking services to their clients: checking, creating savings accounts, loans, and issuing credit cards.
But their requirements for opening an account are usually less strict. Their main source of revenue comes from interest rates and ATMs out-of-networks. Some EMI’s to consider for businesses are
Let’s pretend you make nice clothes and want to open an online boutique to sell them from your workshop. You take photos of all your items, set prices, write descriptions, and buy a domain for your website. Yet, you need a payment processing provider and an account to collect the payments and pay for website maintenance, marketing, etc.
And here's where neobank and EMI come: you can open a merchant account and manage all these procedures online, usually faster than with a regular bank. It doesn’t mean that you don’t need to provide any documents or go through a verification process, but in a neobank, this process will be significantly faster.
All the documents can be provided online and verified in 48-72 hours, while at a regular bank this procedure takes longer. As a result, you launch your business much faster and pay more attention not to paperwork, but to actual work - providing your customers with your high-quality things. Now that you get the general idea of neobanks, let’s proceed to some details.
Neobanks seem like a good alternative to traditional banks and electronic wallets. Via them, customers can easily perform most of their daily financial operations. But does it mean that all they are as good for one people as for the others? Let’s take a look at their upsides and downsides.
Taking all these into account, a question arises: Is neobank a good choice for a business? Let’s find this out in the next paragraph.
With all pros and cons discussed in the previous chapter, you might think that neobanks are created mostly for individuals. Yet they are good for small and mid-sized businesses. The best thing about them is that a business owner can set all processes and manage all company finances without much problem and papers. In this case, a neobank serves as a platform for finance management that comprises all dashboards, allows for paying for logistics, supply, and ancillary bills.
So, choosing a neobank for your business, start with these basic things.