You might think that banks are happy to take your cash as long as it’s earned legally.
But that’s not always the case, as this week’s Money Problem reader, James, is currently finding out the hard way.
The 31-year-old game developer, from Stow, has been turned away by multiple account providers because of the X-rated nature of his creations.
With nowhere to stash his cash, he reached out to Metro consumer champion, Sarah Davidson, for guidance.
The problem…
I develop adult video games on the gaming platform Steam and they’ve sold quite well. I’ve got almost £90,000 ready to withdraw after Steam’s fee and I’ve paid the VAT.
However, it’s been two months now and I can’t find a single bank in the UK that will let me open a business account so I can actually withdraw my money from Steam. I’ve tried 11 banks now – all the high street ones and the apps and challenger banks – and been banned or refused by every single one.
It always comes down to them asking where the money is coming from, I tell them from games I sell on Steam, they ask to see the store page, they have a look and then I get told, sorry, we can’t do business with you at this time. Apparently it’s a commercial decision purely because I make adult content.
What the hell am I supposed to do? I’ve pretty much exhausted the whole banking system. I just want to be able to be paid for products I’ve sold.
The answer…
This is an interesting one because, as you’re finding, ordinary business banking is going to take one look at your adult content and show you the door.
There are actually quite a few sectors that find things just as difficult here – including some that might surprise you.
Gambling, cryptocurrency, CBD production or sales, telemarketing, gaming in general, adult entertainment, debt collection, international e-commerce, vaping, travelling and crowdfunding are all deemed ‘high risk’ businesses by UK banks.
In other words, companies that operate in these industries pose higher financial risks, come with more complex legal issues, regulatory risk, or the potential for reputational damage to the bank.
There’s also a higher risk of fraud or money laundering associated with some industries in particular – ordinary business bank accounts just don’t cut the mustard.
Yet, there’s no shortage of successful adult entertainment businesses, and betting shops sit on just about every high street in the country. The number of people generating a perfectly legitimate income from their OnlyFans account has ballooned in recent years. They still manage to trade, and you can too.
The good news is that all you need to do is open a specialist high risk business account.
The bad news? It comes with costs attached.
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The first step is to find out which banks or financial institutions already offer banking services to your industry. Applying to a bank that understands your type of business should reduce your chances of rejection.
A word of caution, there are more than 150 commercial lenders in the UK and not all of them are fully regulated.
Commercial lending mostly sits outside the regulatory perimeter, according to the financial services trade body UK Finance. However, several providers of business lending and banking facilities are signed up to the Lending Standard Board’s Standards of Lending Practice for business customers, which are recognised by the Financial Conduct Authority.
The more well-known providers can come with higher fees and you may find there are cheaper options available from newer fintechs. Be careful to do your research before signing up – you want to bank with someone reliable with a good reputation.
The next step is submitting your application. You can do this directly or there are firms, such as Modern World Business Solutions, Epico Finance and Wirewand, that specialise in helping companies find the right high risk account for their needs.
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Bear in mind that high risk accounts come with higher fees than a regular business bank account.
Make sure you check set-ups fees, transaction charges, monthly maintenance fees and any chargeback costs. There may be some leeway to negotiate some of these down – it’s not guaranteed, but still worth asking.
Payment services firm Stripe also notes: ‘High-risk accounts are particularly susceptible to fraud and chargebacks. Confirm that the provider has strong security measures and fraud prevention tools to protect your business and your customers.’
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Once you’ve done all of this, it should take between a few days and up to three weeks to get the account fully set up and running.
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