The Green Sheet Online Edition
July 28, 2025 • 25:07:02
What banks and payment providers expect in a startup's business plan
When startups prepare their business plans, they usually want to impress investors or get new partners. Little do they know, the business plan is one of the most powerful tools that gets a startup accepted by banks and payment providers.
The perfect business plan will secure safer, cheaper and more technologically advanced financial partners, but only if it appears convincing enough from a financial regulatory perspective. Startups need to understand “how banks think” and consider several aspects that are only important to their financial partners.
The most important aspect is to show that the new business is not bringing any illegal transactions, knowingly or unknowingly, which can create headaches, penalties or even a revocation of the license of the bank or payment provider they are aiming to work with.
However, they also need to show reasonable profitability, because if the business never takes off, the financial partners lose as well, since there will be no revenue to cover their hefty onboarding and ongoing fees.
This means banks and payment service providers only want to work with startups that show signs of viability and predictability. But what are they looking at, precisely?
Financial planning
The most critical one, of course, is financial planning. But most startup business plans fail here immediately: the most commonly overlooked aspect in new businesses is the lack of planning for processing and banking fees.
Collecting payments from customers is not cheap, and card processing, for instance, can significantly eat into the profit.
Let’s see an easy example where a payment provider charges 3 percent. Not too shabby, right? However, it is charged on the gross revenue, not on profit. So, if the local GST or VAT is for example 20 percent, and the profit margin is 20 percent, this means we are looking at an 18 percent fee on the profit.
Realistically, this means that from every dollar the business profits from its activities, 18 cents go directly to the pocket of the bank or payment provider. This cost is sometimes higher than payroll or technological fees, not to mention other payments and banking-related provisions such as foreign exchange fees, rolling reserves, cashflow gaps from settlement delays, and the cost of chargebacks or disputes.
Presenting a solid working model that shows a clear understanding of the real costs of banking and payments, risk management, liquidity and revenue flows will increase the likelihood that banks and payment providers will want to work with the startup.
Pricing
Surprisingly, banks and payment providers pay close attention to the pricing model, as both excessively high and unusually low prices can raise concerns for different reasons.
When pricing is too high:
- The business might never catch up because the product might be deemed unsellable by the bank’s or payment provider’s subjective evaluation;
- End users tend to have bigger expectations, which might result in more refund requests or chargebacks that the bank or payment provider has to deal with;
- It attracts more fraud, which can risk the whole operation of the provider;
- It activates increased compliance scrutiny which is not only more expensive, but also more time-consuming.
When prices are too low:
- The business might never be profitable enough to cover the provider’s fees;
- It might indicate a scam or a fraud;
- It might result in lower quality, which triggers complaints;
- It can trigger various compliance issues when a large number of anonymous transactions enter the provider’s account.
- Financial institutions prefer to see a healthy and consistent flow of transactional activity that aligns with known merchant profiles and user behaviors.
- Pricing must strike a balance between commercial logic and operational practicality to avoid raising internal red flags during the application review process.
Marketing
Banks and payment providers are also looking at the marketing plans, not in the typical sense of branding and design, but to see if the go-to-market strategy is realistic enough to generate quick profitability and target the right customers. The marketing plan has to clearly show how clients will be acquired, from which countries, how much this will cost, what channels will be used and what type of traction can be expected from it.
More often than not, startups are overly optimistic, and their marketing numbers are inflated without any realistic foundation. Not understanding even the basics of the incoming flows and therefore banking risks only means compliance red flags and will result in either rejection or increased fees with worse terms and conditions.
Business activity
Perhaps the most important part in a business plan is the description of the business activity, as this determines the risk. This is where everything starts or ends. The business activity and all related revenues must be clearly explained in a way that leaves no room for misunderstanding or compliance concerns. Unfortunately, this is where many startups go wrong, mainly when they have an innovative product.
Even if the activity is legally allowed without a license, banks and payment service providers are private institutions, so they have every right to deny working with the business if there is no proof that even the opportunity of money laundering, tax evasion or criminal activities has been eliminated with the business setup.
If there is a slight opportunity from a payment and banking perspective that something can go wrong, plus the business has no previous track record to prove it will be handled well, this will lead to rejection.
Payment providers have the utmost goal to defend their own business, even if this means they will not onboard a new client, thinking “I do not know this business, I do not trust it, I would rather not work with it, because I am not going to risk my whole operation to gain a new client.”
Scalability
Evaluating scalability is also a very subjective yet very important part of the process. Providers want to see if the startup’s idea, legal setup, risk assessment and technology can all scale well to lead the company to success. If the business plan suggests that the business might be handling 100,000 transactions per day in the near future, but their infrastructure is clearly not ready to handle this volume (for example, having one customer service agent on payroll or having no IT costs budgeted in the plan), the logical answer is always a no. Planning big for the future but not creating the necessary, basic environment to support growth when success hits is one of the main reasons why startups fail.
Understanding the risk
Just because something is legal does not mean that the bank or payment provider wants to work with it. The world has changed: banks and payment providers are no longer fighting to take a startup’s business, but quite the opposite. Startups must secure the most reliable, cost-effective and technologically sound solution that fits their unique and individual business requirements.
Banks and payment providers always evaluate the risk the business brings to them against the possible benefits they yield from the cooperation. Being a startup in this evaluation process is definitely a handicap.
Payment and banking strategy, a must from day one
Millions of great ideas and products are everywhere. The devil, however, always lies in the details. Payment and banking today impact customer experience, risk management, technology, product development, data security, compliance, finance and more. It should be considered a standalone function, an essential element of the business strategy, not just a part of finance.
Having a solid payment and banking strategy from day one will not only improve the chances of being accepted by banks and payment providers but will also save significant time, cost and reputational damage in the long term. But balancing these co-dependent factors requires specific skills and specialized expertise.
Relying on banks and payment providers to advise independently on what is best for the company would be like expecting a fox to guard the henhouse: a sales-driven organization cannot act against its own interest and prioritize yours instead.
It does not cost much to set things up properly from the start, but it can cost a lot more to fix everything in firefighting mode when things start to go wrong. 
Viktoria Soltesz is the CEO and founder of PSP Angels and The Soltesz Institute. She is a leading advocate for strategy-led financial operations, ethical industry practices, and structured education in an area too often overlooked in traditional business training. PSP Angels is a globally awarded, independent payment and banking consultancy that has supported over 1,000 companies in building scalable, secure financial infrastructures. The Soltesz Institute is the first and only independent online organization offering EU-accredited training and certifications focused exclusively on payments and banking. To contact Viktoria, please email viktoria@pspangels.com.
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