In these trying times, businesses in high risk industries are finding it increasingly challenging to open bank accounts and execute transactions efficiently. This problematic situation has been brought about by several forces impacting the banking and payments sectors. 

In this article, we will examine these market influences and furthermore, how fintechs are providing a lifeline to underbanked corporates.

The (banking) situation on the ground for high-risk merchants

It is common for companies in high-risk industries to be outright rejected by traditional banks in Malta. Often, they’re not even allowed to apply for an account because banks would advise them from the outset that they’d be rejected. 

Cryptocurrency exchange? Rejected. 

Cannabis manufacturer? Rejected. 

Online casino? Rejected. 

Even if, and that’s a big IF, they are allowed to apply for an account, they may encounter other overwhelming hurdles. 

A frequently experienced hurdle is that the process of opening an account may take several months. This can be an immense inconvenience for the merchant. These delays may be caused by several reasons such as slow customer service and unnecessarily bureaucratic processes. But they may also be caused due to complications arising from a lack of understanding of the applicant’s industry. 

Industries such as iGaming and Crypto work with innovative business models that may be unfamiliar to banks. This lack of familiarity creates confusion and misunderstanding, thus causing delays in the account application process. 

Another common hurdle faced by high-risk merchants is that if they are allowed to open an account, these accounts may have tight transaction limitations, thus making using the account inefficient or even not fit for purpose. For example, a merchant might only be allowed to transact with other businesses and not directly with consumers. This limitation would be problematic for a betting company that needs to pay out winnings to players. 

The third and oft-criticised hurdle are the high banking and transaction fees that are charged. Banks often justify such charges by stating that the high fees are necessary to cover the added compliance costs that come with serving high-risk merchants. There is truth in that statement, but how much financial institutions take advantage of the situation is another matter altogether. 

The reality is that high-risk merchants based in Malta need banking and payment partners. And unfortunately, many banks don’t want their business. 

Why are companies finding it hard to open bank accounts?

There are several reasons why banks are de-risking and no longer serving high-risk merchants. 

One main reason has to do with the risk of money laundering that comes with serving merchants from high-risk industries. To make matters worse, many local banks depend on their relationships with foreign correspondent banks, and thus if the latter do not want to carry certain risks, then local banks are forced to offload risky merchants from their books. 

Another reason why high-risk merchants can’t open accounts is one we’ve touched upon earlier. It has to do with banks’ limited knowledge of certain industries that are deemed high-risk. These industries, like iGaming and Crypto, tend to be very fast moving and so dedicated personnel are required to keep up with developments. 

Without in-depth industry knowledge, banks may find it hard to sufficiently risk assess new business models and thus they may prefer to keep things simple and reject these sectors outright.

International companies in these high-risk industries in Malta need to efficiently handle cross-border payments. But if they cannot work with banks, what’s the solution? That’s where fintechs enter the fray.

Fintechs offering alternatives to accounts with traditional banks

Although the situation regarding banking for high-risk industries may appear bleak, all is not lost. 

Companies rejected by traditional banks can nowadays apply to open a dedicated IBAN account with a locally regulated fintech such as FinXP. IBAN stands for International Bank Account Number. 

Such fintechs aim to serve the underbanked corporate market. These Euro IBAN accounts serve the same purpose as a current account with a bank. They can be used for SEPA payments, mass pay-outs, and importantly, the accounts can be opened efficiently, 100 per cent online.

A fintech like FinXP is able to serve high-risk merchants because it holds in-depth inhouse knowledge of these fast moving industries, and importantly, it does not depend on intermediary banks to open accounts. The company is also a principal member of Mastercard meaning it can issue debit cards to clients. 

Meeting the challenges of today’s financial world

Although the situation with banks is challenging for high risk industries, there are solutions out there. 

Forward looking fintechs such as FinXP provide a suite of effective payment services that make companies lives easier. The financial services industry is evolving and fintechs are leading. This is the way.

For more information on FinXP, contact us directly via our website at

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