Why do startups struggle to find a bank or payment provider?

High street banks see little volume, changing activities and no track record. Under investor pressure, some startups then onboard with providers nobody has heard of. Viktoria Soltesz describes a client whose funds got stuck with such a provider, part of them lost. For operators, it shows why the provider holding a merchant's funds matters as much as its price.

What a bank sees

A startup has little volume, an activity that may change next quarter, and no processing history. From a bank's or an acquirer's point of view, that is a small, uncertain customer with onboarding costs that may never be recovered. Many decline politely or take months.

The trap

• Under pressure to launch, founders accept the first provider that says yes.
• Some of those providers are poorly regulated, thinly capitalized or hold funds in places hard to reach.
• Viktoria Soltesz describes a client whose funds were stuck with such a provider, with part of them lost.

What operators take from it

The provider that holds a merchant's funds is a credit risk for the merchant. Price matters less than where the money sits and who regulates the entity. Operators building a payment network should check licenses, safeguarding arrangements and settlement timing for each provider, and tell merchants which entity holds their funds. A startup that chooses a provider through an operator with that diligence avoids the trap, and the operator earns a relationship that lasts past the first year.