We have an Existing Prize Competition Business that needs to open a business bank account.
We had an enquiry from a genuine Prize Competition business, with the required legal documents from their solicitor to confirm this, but desperately needed to open a new business bank acocunt.
They had been running the business since July and was able to open a very basic business account who accepted a competition business.
The issues they had is that they have been very successful so far, growing very rapidly over the recent months which ordinarily would not have been a problem, however due to our business being considered as being in a high risk industry, their current bank has a limit on how much they can transact through it.
This is now casuing us a huge problem, as the business is growing fast but they are unable to bank the money from our credit card company.
They tried all the main banks and many of the alternative business banking providers, but none will accept a competiton business due to their risk appetite.
How did Extra Direct help?
We were able to obtain a decision in principle within 24 hours, confirming we had a banking provider willing to accept the application based on the information provided.
Once all the necessary paperwork was submitted, the account was processed and opened within 24 hours of engaging us and receipt of client documents.
The other information which is relevant for a competiton based business looking to open a bank account is:
The client meet the below Provider’s criteria:-
• You must take payments via an acquirer (Credit Card, so no cash or direct bank transfer)
• You must be registered as a UK Limited Company,
• You need to be domiciled in the UK.
• A Skill based question (or similar) is needed to enter, this ensures the account is not a raffle (as a raffle business requires licensing)
• Data Protection Policy must be provided
• A list of winners to be provided to the banking proivder, as well as contact information.
• Full website in operation.
• List of all websites URLs in operation (this to continue after initial set up)
Please note that the Provider requires sight of the acquirer agreement, and will check to see what % the acquirer holds back of the funds until the draw has taken place. The provider may also wish to hold funds until a winner has been announced.
The Provider will not consider applications that:
• Use terminology such as lottery or lotto. Lotteries are regulated under the Gambling Act 2005.
• If the website offers a free route that is not displayed as prominently as the paid route.
• Has no valid website
Conclusion:
Opening a bank account for any competition business will always be a challenge as they are considered as a high risk business and the mainstream providers do not have an appetite for this type of risky activity.
However we do have some business bank account providers who will accept these type sof business activities, providing you can demonstrate you have a genuine business and take your payments via a credit card and not direct payments from individuals, as this helps mitigate some of the anti money laundering risks.
You may need to compromise on one or two things and the high street banks will not accept any applications, but there will be options available for a competition business and we will almost certainly be able to help you source and apply for a business account for you.
Need more information?
Apply Online here or Telephone 020 3286 3929
