Merchant Bankers – The Elite of Criminal Organisations

It’s been well documented in the media lately how banks are causing many business to go bust and generally making SME life hell, the there’s a group of ninja bankers that seem to have almost invisibly slided by without barely any notice hidden behind confusing legal documents and the assumption that “thats just how it works” and leaving bodies of dead SME’s in their wake..

Yesterday the latest start up in my portfolio of businesses which sells Satellite Dishes was suddenly struck with a potentially fatal illness, someone had been sucking the life juice from her for several days and unfortunately like many diseases in was in an a very problematic stage before we noticed anything. The Merchant bankers, Elavon, had decided they would keep all the money from the sales. Thats right they just decided, no warning hell they didnt even tell us after they did it. It was kept a secret from us. As it happens I am in weekly contact with our rep there regarding our next start up, but no apparently them stealing money from us wasn’t worth a mention. Seriously they didn’t notify us in anyway at all, they just helped themselves to an increasingly sizable chunk of money.

Now having been screwed by AIB Merchants several years in the past who tried their own little version of the kiss of death by asking us to spend €20k+ to fly in an onsite PCI auditors to Ireland and later asking me to send them the meaning of PCI DSS as they didn’t really know what it meant. I had already spent sleepless nights reading the rules of the financial regulator (when that doens’t put you to sleep you know things are bad!) so this morning I was straight on the the financial ombudsman.

The problem is that like myself most SME owners don’t have time to learn off every aspect of law and standards as to do so would take tens of thousands of years. Therefore we assume that the bankers decisions are probably correct and it rarely occurs to us that they could be making up the rules as we go.

Another great example from of a business whos Merchant bankers recently tried to force in early grave. A merchants decided they’d decrease their “risk” by taking €100,000 from an SME in the form of a “deposit” to continue doing business with them. This sort of money to many SME’s means closure there is not other alternative. Apparently they took the money without permission and gave the alternative that the business could get the money back by closing their account – IE cutting off their income stream, so suicide or be killed your call!

At the moment getting a new merchant account has never been more difficult. Even with my track record for successful launches I found it difficult so one can image how nearly impossible it would be for a first time Entrepreneur starting out on a shoe string budget to gain the ability to get paid for their business. Grounds under which applicants will be refused a merchant account would be things like using a residential address for registering their company or being involved in any aspect of an industry such as the lucrative wedding industry. It’s ok for our government officials to have a home office but if you want to try and start your own business god forbid you can’t afford rent for an office – even if you don’t need one! By this logic I would never have been granted my first merchant account, nor would Richard Branson for that matter.

This needs to stop, governments need to assign a specific overseer of this cloak and dagger section of the banking industry and give businesses in Ireland a fighting chance. If they want Irish businesses to export – Let them sell to our neighbors up north in the format they want – debit card, don’t insist businesses open an office in the UK there before we can compete for sales on an equal footing!!! In this day of e-commerce and high tech business that they are apparently supporting how about helping the SME sector which is where the real bulk of the export potential clearly is! It’s the small fixes would have the biggest impact!

I find it so Ironic that there really is no real competition in the merchant banking industry but their close partner companies Card Processors Such as Worldnet TPS and Realex are one of the most innovative sectors with the best customer service available.

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