Business account fitness series: Tip #3 – Only transact with licensed banks or payment agents

When it comes to your business payments, the channels you choose can make all the difference. Beyond simply moving funds from point A to point B, it’s about keeping your money safe, your fund flows transparent, and your business protected from unnecessary risks.

Using your bank’s payment platform or licensed remittance agents give you peace of mind by ensuring every transaction is secure and traceable. Let’s see how this visibility protects your business and keeps your business accounts in good standing.

Always go with your bank or licensed payment agents for all business payments. While unlicensed third-party remittance services may offer lower fees, they often come with hidden risks. Being able to trace exactly where every dollar originates and ends up is important for keeping your business records organised, staying compliant, and protecting your hard-earned reputation.

Scenario 1: The cost of unlicensed payments

Chris runs a wholesale business and once opted to use an unlicensed third-party payment agent for a few large transactions to cut costs. At first, it seemed like a wallet-friendly shortcut. But soon, problems emerged.

This platform lacked the necessary transparency and controls, leaving both Chris and his bank unable to trace where the funds originated or where they were sent. This lack of clarity immediately raised money laundering concern. This led to Chris’s account being temporarily suspended, pending a thorough investigation that disrupted his business operations.

In summary:Using unlicensed payment agents may save fees upfront, but can cost you far more in transaction delays, restrictions or even account suspensions down the line. Without clear visibility into your transactions, banks will have to act cautiously, and that can disrupt your business operations.

Scenario 2: The fraud alert

Caroline uses a licensed digital payment gateway integrated into her business website. One day, the system detects suspicious activity on a transaction and immediately alerts both Caroline and her bank. This early warning prevents potential financial losses and protects her business reputation.

In summary: Licensed payment agents’ platforms come with fraud detection and security measures that protect both businesses and banks from fraudulent transactions, minimising disruptions and safeguarding your company’s finances.

Why this matters

Licensed banks and authorised payment agents operate under strict regulations, including anti-money laundering (AML) laws, and are equipped with robust security measures. Their platforms provide full traceability of funds and reliable identity verification, significantly reducing risks related to fraud, unauthorised transfers or money laundering. On the other hand, unlicensed remittance services often lack these safeguards, potentially exposing your business to financial loss or compliance issues.

Tip #3 account fitness checklist:

Transparent and secure transactions keep your business account healthy, your cash flow steady, and your operations running smoothly – reinforcing a solid foundation for long-term business success.

As your trusted banking partner, we’re here to support you as you begin your business fitness journey and work toward achieving your ambitions. To learn more about how to establish proper business account practices, visit https://www.business.hsbc.com.hk/en-gb/campaigns/account-fitness.

Download the complete “Business Account Fitness Guide” now for more real-world business scenarios to help you understand how to establish proper business account practices for smooth operations.