Photo credit: Unsplash
- Mercury Bank is an online banking facility. Traditionally, consumers are used to more offline banking services that require physical presence and may be hesitant to use an online facility, but Mercury Banking has been so designed as to provide every answer online.
- It has been introduced primarily for tech-based startups in the U.S.
- Safety of funds is insured with Mercury banking and every measure has been put in place to counter fraudulent activities.
- It has a user-friendly mode of functioning, be it the opening of the account, or the transfer of funds.
Mercury is a free, online banking platform that includes both a business checking account and a business savings account designed for startups and technology-based businesses. Mercury allows for customization of your banking as each account provides a read-write application programming interface. The banking services for Mercury are provided by Evolve Bank and Trust, and accounts are insured up to $250,000 by the FDIC. Ownership of a U.S. company with a federal employer identification number is an essential criterion for eligibility to use a Mercury account.
Mercury Banking Reviews
Here are a few features of Mercury Banking:
Long transfer time in the case of international clients
Whereas the account opening process for a non-resident of the U.S. is comparatively speedy and straightforward, regular international transfers take up to 14 days for processing. However, Mercury Banking has been highly beneficial for the non-residents of the U.S. who could not get their own company business checking account because of being foreigners.
Very professional and quick response to the application
The application process for Mercury is fairly simple once all required documents are submitted. The time for approval is even less. The documents include a clear passport-sized photograph, legible documents in PDF format, a detailed description of your startup, and so on. For non-U.S. residents, only passports are allowed for identity verification. An Employer Identification Number is also a must. The easy application process helps eliminate the reluctance that might be expected of people used to offline banking.
The gap between what is stated on the website and what the actual working norm is
This stands true particularly in the case of writing checks. Since a business checking account is a defining principle for Mercury Banking, customers expect that they will be able to write checks from this account. The procedure, however, is different. For writing checks, Mercury Bank has to be contacted first for they will write the check and mail it to you or the recipient.
Delay in clearing deposits
For a startup, even the smallest amount of money is very valuable and time is of the essence. The time it takes to clear a deposit at Mercury can exceed a week. This can cause a delay in planned projects.
Several clients feel that the allowance for the use of a security key (like Yubikey/Google key) could vouch for a higher degree of autonomy and safety than just the authentication app. This could also ensure more protection against hackers. The funds, however, are with Mercury and are FDIC insured, which guarantees the recovery of funds up to $250,000. Heavy encryption of every webpage and regular penetration testing have been put in place for keeping the money safe.
No geographical limitation as long as the area of service is in the USA
Mercury is an online banking facility with no physical branch. A client could be living in any other country and still be able to access the facility of Mercury Banking as long as the area of operation is within the USA. Wires can be transferred within the USA as well as internationally. All this has been possible because Mercury banking is internet-based.
Free of cost
Mercury provides banking services free of charge. This is highly beneficial for a startup. Mercury requires no registration fees, no fixed monthly fees, and no transaction fee. Mercury allows the electronic transfer of money to another account free of charge.
Allows multiple users
Mercury provides services to admins as well as bookkeepers and other financial staff, apart from business owners.
There is a lack of clarity in the functioning of Mercury Banking, as it is based online, and runs through another bank (Evolve Bank and Trust), which may regulate their activities and result in confusion for the clients.
No effective remedy for an emergency
Customers seem disappointed that no one is available for a phone call from the Mercury Banking end. In this tech-savvy world, everything online seems appealing, but in the case of an emergency, a quicker response would make more sense. Their chat is understaffed and responding by email can take hours At times, when there is a longer delay in response by email, customers naturally begin to doubt their money is in safe hands.
Mercury Banking for Startups
Immad Akhund, the CEO and co-founder of Mercury stated that "with Mercury'," he had the "opportunity to build something that was needed." His previous startup, Heyzap, was "constrained by cash flow." Aware of the other problems prevalent in the marketplace, he set out to introduce Mercury Banking as an online banking facility, primarily suited for startups. Here are a few reasons why Mercury Banking is ideal for startups:
Boost in business
This has been possible because users do not have to log into Mercury's actual dashboard to access lending and other payment features with an API. As Akhund notes, the marketplace requires not just receiving money, but also paying people. This is a two-way flow. Handling this two-way process efficiently can boost business. This is an added benefit for a startup because a major boost in business can accelerate their prospects.
The easy application process makes it a valuable resource for startups
The only things required for opening an account with Mercury are the articles of incorporation, a few government documents, and the EIN. Opening an account for startups at other banks may not be as simplified as it is at Mercury. Since Mercury was especially introduced keeping startups in mind, its procedures for account opening can be easily followed by startups.
Specially designed for startups
Banking options for startups are limited, as compared to other established businesses. Mercury Banking has been designed "for entrepreneurs and by entrepreneurs" and this has resulted in provision for facilities that are particularly suited for startups. Such facilities include an easy application process, free-of-cost banking services, minimal charge for wire transfers, and so on.
Solely internet-based banking
With the advancement in technology and a fast-moving world, a desire to have everything at a click is making its need felt in every sphere. This has become an essential norm, and it is no different when it comes to banking. Mercury Bank is completely online, doing away with the need to commute to different locations for banking services. This is time-saving as well as convenient in terms of access. Everything can be conducted online with Mercury, be it opening accounts, making payments, or making deposits.
Security and privacy
Easy sending and receiving processes
Since all Mercury banking services are available online, money can be sent to another account electronically for free, directly through Mercury's dashboard. The easy sending and receiving money processes facilitate good business.
While there are no registration or monthly charges for Mercury Banking, the charges for wire transfers are also as low as $5 per domestic transfer and $20 per international transfer. Receiving both domestic and international wires is free of cost, as is the sending of checks using the Mercury dashboard.
Mercury Bank allows the provision for multiple users. There is no limit to the number of team members an admin can add to access the startup's bank account. Mercury is also currently integrated with QuickBooks, and Xero, two of the most popular accounting applications.
Mercury has several startup-focused advantages despite being in the initial stages of its launch. The advantages are likely to increase soon.
Mercury Bank Debit Card
Here are a few steps required for the activation and use of a Mercury Banking debit card:
- Mercury Bank Debit Card is delivered to the business address in a plain white envelope within 8-10 days of account approval. This time limit is a major attraction in terms of having a debit card ready for use.
- Activation of this debit card is simple as it requires setting a PIN at the mentioned web link; a hassle-free way compared to complicated methods where debit card activation can take several days.
- This PIN can be changed by simply going to the Mercury dashboard and finding your debit card under its associated account page. In case this card is misplaced, it can be replaced by going to your Mercury dashboard, finding your debit card under its associated account page, and clicking on Replace Card, thus relieving the debit cardholder of unnecessary anxiety if they happen to misplace the debit card. This feature gains the confidence of the client as it is good to know what protective measures will be at work should a worst-case scenario occur.
- These Mercury Banking debit cards are eligible for use at ATMs, and there is no charge deducted apart from what the ATM charges. All Mercury Banking debit cards are part of the Allpoint ATM network, so Allpoint does not charge any cash withdrawal fees with Mercury Banking debit cards. Mercury generates virtual debit cards instantly and these can be used to pay vendors like Shopify, Amazon, etc.
- Virtual debit cards can be issued almost instantly and each card is assigned to a specific user with a specific account. This feature is favorable for startups because it provides freedom in terms of physical location and saves time that traditional debit card issuing processes are subjected to.
- Currently, 50 such cards are supported by Mercury, providing for efficient management of transactions. Individual spending of each card can be tracked down, doing away with possible confusion or a mixing up of information.
Provision of Card only users
Mercury recently announced to Card only users, "a new user permission tier" for the Mercury account. This enables these users to make payments without compromising on security. This is how it works:
- Select "Card only user" when adding a new team member and setting daily transaction and ATM limits. This enables the admin to keep a check on daily transactions and prevent any overuse.
- An email is then sent from Mercury prompting the new user to create a login for their Mercury account.
- Users can then issue themselves a virtual card for instant use or mail themselves a physical card. This provision is again user-friendly.
- Card-only users can view their transaction history on the Mercury dashboard that they can still retain, or on the Mercury iOS app. They can also freeze or unfreeze a card, or issue a virtual or physical card from the dashboard.
- Card-only users cannot access account balances, cannot change security or team settings.
- The Master debit cards can be used without international transaction fees and are connected with iOS digital wallets, enabling businesses to use them with Apple Pay.
Benefits of Virtual cards
- Virtual cards allow immediate access to funds from any part of the world. This is much like the Mercury Banking platform which has no geographical limitation and can be accessed from any part of the world. Online payments can be made as soon as the Mercury account is opened, even while the physical card is still in the mail.
- Virtual cards ensure better protection against fraudulent transactions. This is because they can be frozen immediately.
Mercury Business Account
- Creating a business account with Mercury is fairly simple as Mercury has minimal requirements for opening an account. Since Mercury covers only those companies that are functioning within the U.S., proof of location is required. Hence, a U.S. company with a federal EIN, official documents of the company, and a picture of the applicant's government identity are required.
- What Mercury Bank requires is not the physical presence of the applicant in the U.S, but that their scope of operation must be the U.S. Being an online banking facility, Mercury has fully utilized its online mode by providing its services to U.S.-based companies around the world, except for a few countries including Belarus, Burundi, Central African Republic, Cuba, the Democratic Republic of the Congo, Iran, Iraq, and Zimbabwe.
- Mercury's banking services are focused mainly on tech-based companies in the U.S. It has been designed in such a way as to gear their advancement for a profitable future. Mercury does not accept money services businesses or those companies involved with adult entertainment, marijuana, and gambling. Mercury also does not support cash operations, so it might not have a higher affinity with retail businesses that require physical cash. Apart from the above-mentioned businesses, all companies can open a business account with Mercury.
- What sets Mercury business accounts apart is that there is a provision for multiple team members. Admins can invite as many team members to their Mercury accounts as they think necessary and there is no limit to this number. This is because Mercury realizes no single hand is at work within a business organization, and this feature enables better teamwork at all levels.
- Monthly statements can be downloaded through the Documents tab on the Mercury dashboard and this allows an organization to keep clear track of its transactions regularly. If anything ever goes amiss, it can be rectified in that monthly period, without having to wait for an annual statement.
- Mercury business banking also provides for bookkeeper accounts that give access to transaction history and statements, without initiating any money movements or changing user permissions. This assists the client with recordkeeping while ensuring their account's safety.
Mercury Business Bank
Mercury Business Bank is geared towards providing tech-based startups in the U.S. with a secure banking facility through Evolve Bank and Trust. It has been introduced keeping startups in mind as it aims towards providing exclusive facilities to those who are new in the field of business by way of flexible bank operations. The Mercury Business Bank functions in the following manner:
- Mercury Business Bank offers a variety of account options that are FDIC insured up to $250,00. By having its funds FDIC insured, it provides an answer to people who doubt that its services are provided by another bank (Evolve Bank and Trust). This reliability is guaranteed.
- Mercury Business Bank focuses on the needs of startups; it has a feature for upgrading to Tea Room services. This has been done by keeping the secure investment of business profits in mind, and when the account holds a balance of more than $250,000, account holders become eligible for the Mercury Tea Room.
- Mercury provides users with digital tools that ensure their startup progresses smoothly. Mercury accounts can integrate with other third-party programs like QuickBooks, Xero, and more.
Pros and Cons of Mercury.
Mercury Bank is an online banking facility created by the joint efforts of Immad Akhund, Max Tugher, and Jason Zhang, backed by lead investor Andreesen Horowitz, a U.S. venture capital firm and bank partner, Evolve Bank and Trust. It has been designed specifically for startups but is open to all business organizations that function in the U.S.
- Mercury Business Bank has no minimum deposit for opening an account, no monthly fees or registration fees. This is a major move in the technical sphere for startups as this is a hassle-free way for startups to manage their finances without worrying too much about the cost they invest in banking.
- Mercury allows different layers of access to all its accounts. Under this provision, savings and checking accounts are included together automatically with controls in one place. The bookkeeper access provides all necessary information for accounting without having access to funds. This kind of built-in documentation provides a good deal of clarity in the functioning of the startup.
- Physical and virtual debit cards are available for every user. The process of activating this debit card is fairly simple and quick. Cash withdrawal from Allpoint ATM networks is free of transaction charges. These cards can be used by Mercury users from any part of the world and guarantee protection against unsolicited activities. Up to 50 such cards are eligible for Mercury users, enabling them to keep track of individual transactions with each card.
- Mercury grants API access to every user, and not just to those eligible for Tea Room services. API allows customization and automation of accounts by allowing users to create transfer rules, or even set up bulk payments.
- Mercury banking facilitates the easy operation of the two-way cash flow on which the market rests. This provides a major boost to the businesses, as Mercury accounts can be opened sooner than with other banks.
- Mercury banking has been specially designed for startups, thereby providing suitable access to banking for organizations that face a lack of options for their finances.
- Mercury's banking facility runs through Evolve Bank and Trust. The regulations of Mercury Bank are thus monitored by another body. As such, Mercury does not support sole proprietors or trusts, and Mercury Banking services can be used by only those companies that are based in the U.S.
- Mercury does not allow cash deposits and is digitally oriented. This could be a drawback - keeping cybercrimes in mind, and the additional layers of security that are needed to protect fraudulent activities online.
- Check deposits are not supported for all accounts. They are available to accounts with established funding and transaction history only. This consumes the time that was saved in initially opening the account. The initial days of operation are crucial for a startup, and having an established transaction history might not be achieved sooner.
- Savings accounts with Mercury Business Bank offer a low rate of interest return. This does not work well for startups because immediate and constant money flow is of paramount importance to them.
- The option of upgrading to the Tea Room account then becomes inevitable. Only businesses that hold a balance of $250,000 or more in their bank account are eligible for this feature.
- According to the Federal Reserve regulation following the 2008 economic crisis, only six transfers can be made from the savings account. This limits the money movement even more.
It is important to consider that Mercury Bank is in the initial stages of its launch. This could mean a conflict with the crucial initial days of functioning in recently launched startups, where they might have to wait for an upgrade in banking services which Mercury Banking is expected to offer in the near future. However, with its simple account opening processes, it is attracting clients from around the world because it does not require a physical presence and can be accessed by any company operating in the U.S.
Is Mercury Bank safe?
When it comes to safety for hard-earned money, everyone looks for a secure method of handling finances. The safety measures designed at Mercury Bank are as follows:
- Heavy encryption of every page on the Mercury website: Mercury Banking prioritizes safety by ensuring heavy encryption of every webpage. This keeps personal information and data safe.
- Logging into your Mercury account requires two-factor authentication, with time-sensitive codes. These codes are never sent via any insecure medium, like a text message. This is a measure put in place to prevent hacking.
- To keep the money of their clientele safe from hackers, Mercury hires a third party on an annual basis to perform penetration testing. This keeps the system updated against any possible fraud. The hiring of a third party also guarantees an effective check for the minute loopholes that may have been overlooked.
- Mercury never stores debit card numbers. Even stored passwords with Mercury are encoded with a bcrypt algorithm for advanced security.
- Mercury Bank is insured by the Federal Deposit Insurance Corporation (FDIC), an independent agency of the U.S. government. This ensures recovery of funds up to $250,000, thereby relieving users of worrying about their money being in the wrong hands.
- Mercury uses Plaid (a product used for linking a company's digital bank account to other digital or mobile accounts held by financial institutions) like other established companies, such as Venmo and American Express. In doing so, it has followed established procedures and successful working examples to gain trust in terms of safety.
Learn more with us
- Opening a Business Bank Account | AbstractOps
- The Best Bank for a Startup | AbstractOps
- The Best Bank for a Startup | AbstractOps
Access our Knowledge Base for Startups.
We can help!
At AbstractOps, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most—your business.
We can help you with deciding whether or not to get started with Mercury at your startup. Learn more.
Like our content?
Subscribe to our blog to stay updated on new posts. Our blog covers advice, inspiration, and practical guides for early-stage founders to navigate through their start-up journeys.
Note: Our content is for general information purposes only. AbstractOps does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.