If you’ve ever tried to start a company, the greatest hurdle is usually money. Where to get the money? How to handle it? How to transfer funds? Banks do their best to streamline this process for the modern company, but are held back by outdated techniques and policies. And then there are the fees.
Startups are like mushrooms, they can blow up overnight. Suddenly, a company can grow from a ten man team to a hundred in less than 6 months. Scaling everything is a major issue in these times and a company’s success depends on how well it can grow without any hitch. There are many things that can go wrong. But Mercury Bank for startups makes sure that with one factor won’t fail you: banking.
Banking is easily the most annoying part of setting up a company. The paperwork is long and tedious. Filling in form after form while a bank employee tries to explain a non-transparent process. After everything is completed, there is the exorbitant fees. This is especially for international transactions. And startups today are international. Mercury founders were in the same boat. They built Mercury to address these problems.
Mercury bank of USA is built specifically with tech startups in mind. It provides banking that scales with your company. Mercury bank is an up-and-comer backed by serious names. Their investors include Adreesen Horowitz, L2 Ventures, Svangel, Quiet Ventures and even individual investors from YCombinator, Instacart, AngelList, Airtable among others.
So let’s see what the Mercury Bank has to offer?
What is Mercury Bank exactly?
Mercury is a bank for startups that provides –
- A checking account
- A savings bank account with 1-2% earnings
- Debit card
- ACH payments
- Check payments
- Domestic and International wire transfers
- Helpful tools and features to track your money
- FDIC insured deposits
How much does Mercury Bank cost?
What’s the damage to your wallet? Nothing! Mercury Bank is free.
- No minimum balance
- No opening account fees
- No monthly fees
You only pay for wire transfers, and even that has a flat fee of $5 domestically (in the US) and $35 internationally.
Do they accept all types of companies?
Mercury has some restrictions when it comes to the type of industries that they will support. If you are one of the following businesses, I’m afraid you can’t apply for an account.
- Money services business
- Adult entertainment
- Marijuana Industries
- Internet gambling
This is nothing personal. Companies like these deal with cash and are not suited to this type of business process. Mercury works best for Tech companies.
What documents are required?
There is only one condition to apply for this bank account. You will be required to have a company registered in the US with a federal EIN (Employer Identification Number). Along with that you will need to present your company’s articles of incorporation and a picture of your government ID (a passport or driver’s license should do).
While this may sound like a difficult task for someone outside the US, it is rather easy to do. You can setup a US company remotely with just few hundred dollars. If you plan to raise funding Delaware is the state you register. If you do not have plan to raise third party funding I recommend registering in Wyoming. If you need help, feel free to contact me.
Earlier, while setting up a business was easy, opening a bank account proved to be extremely complicated involving further registration and increased fees. Mercury Bank takes away this complication, allowing you to work, function and transact as a US based company.
If you’re worried that the Mercury Bank won’t like this, they have made their position quite clear. In their words, “We are proud to support US companies founded by people from across the globe.”
How good are the security features?
This is a very valid question today. Everyone claims to be secure but a rash of malware making the rounds have cast doubt on security claims. One cannot be too careful these days, especially if monetary transactions are involved. Mercury Bank protects against internet-based threats with the following technologies
- HTTPS/HSTS on all pages
This feature makes sure that any communication (logins, form filling, etc.) cannot be seen during the transit between your browser and the server. It is resilient against a large number of attacks.
- Third Party Pentesting Every Year
Security experts try to break into the systems to find vulnerabilities. If any breaches are found, they are quickly patched
- Hashed Passwords
Passwords are stored in a hashed form using the Bcrypt algorithm. Hashes work by converting your passwords into a jumble of words and numbers that cannot be converted back into the original password. It also sprinkles random characters in random places in the hash. This is called salting. Bcrypt is safer and more efficient than the current mainstream cryptographic algorithms. In short, even Mercury Bank cannot see your password.
- Time-based OTP’s
Two factor authentication is enabled by default. You will need to use an app like google authenticator that generates One-Time-Passwords that last for a few seconds. Authentication is never sent over insecure SMS.
- Database Encryption
Security is tightened with encrypted databases. Sensitive information undergoes further encryption. They also never store your debit card number.
Where is my money?
An important question in these situations is “Where are the funds stored?” Mercury Bank with FDIC-insured banks like BBVA compass and Evolve Banks & Trust to store your deposits. So your funds will be stored in the US. For more information on this go to mercury.co/legal.
Plaid? What’s Plaid?
Plaid is a service that allows a user to connect securely to bank accounts. Mercury Bank uses plaid to connect any other accounts to your Mercury Bank account.
Can I send checks to Mercury Bank?
You can send checks through your Mercury bank dashboard. They are completely free!
Do I get a Mercury Bank Debit Card?
Yes you get a mercury bank debit card free of cost. However this debit card will be shipped only within US. You can always use a mail forwarding service to get it shipped internationally.
What about cash? Can I deposit cash?
They don’t currently support cash deposits as they are more focused on the electronic monetary transactions.
Moreover if you are a tech business, you would rarely need cash deposits and withdrawals.
What about wire transfers?
These are the only services that will cost you. But it is a flat $5 wire transfers within the US and $20 for wire transfers internationally.
Silicon Valley Bank I have used charges $25 for international wire transfers, so this amount is slightly higher. You can always use third party services like Zoom or Transferwise to get better rates.
What’s Mercury Tea Room?
This is an advantage or privilege club of Mercury. This is where companies and individuals can come together to discuss ideas, businesses and deals. Everyone knows that networking is the most important part of any business. Mercury Tea Room gives companies a virtual place to connect with other customers.
Mercury has a culture of serving each other tea in their office and thought it’d be nice if they could share that with the companies they work with. Mercury Tea Room is a metaphorical way of accomplishing that. The goal is to help every startup into the Mercury Tea Room and serve a cup of tea, along with other great perks.
How does one get into the Mercury Tea Room?
Either hold a balance of more than $250,000 in your Mercury checking account, or get invited in by a Tea Room member.
What do I get in Mercury Tea Room?
Mercury Tea Room customers earn 1.75% on deposits in their savings account. As the name suggests, they also get free tea every once in a while.
They also have partner rewards for things like bookkeeping, servers, and 409 as for Tea Room customers. If you’d like to know more about the above items or need help finding other providers for your business, get in touch at help@mercury.co.
History of Mercury Startup Bank
Mercury was founded by Immad Akhund, Max Tagher, and Jason Zhang. The three previously worked together at Heyzap, which sold for $45 million in 2016. Mercury has a small team of dedicated employees.
Mercury is Akhund’s third startup, and it was inspired by the frustration he and his founders encountered firsthand with previous business banks.
From a blog post announcing the release of Mercury, Immad writes –
I founded three startups in the 13 years prior to starting Mercury, and the banks I used executed these functions in pretty haphazard fashion. I ended up having to figure out a lot of it myself through a mix of spreadsheets and patched-together processes. I had to call in to send a wire and gather my co-founders at a branch for a couple hours to open an account. Getting a savings account with any interest, if it was possible at all, would usually take extensive back and forth negotiation and result in earning fractions of a percentage point. And I couldn’t rely on the banks to get any clarity into company finances; usually I’d be pulling up spreadsheets or throwing together an ugly admin page.
The last thing I wanted to do as a founder was log in to my old bank or interact with it in any way. We hope to turn that on its head and make logging into your bank the first thing you want to do every morning.
Mercury raised a seed round of $6 million from Andreessen Horowitz in August 2017 and has been quietly building the product since then. Rivals include Silicon Valley Bank and Wells Fargo.
More than 3 million businesses are created annually in the United States, and banking those businesses is a $400 billion industry. But existing banks have little incentive to innovate when competition is low and the industry is ruled by a small number of major players, Akhund said.
Launch day April 18th 2019
“We’re excited to launch Mercury out of private alpha today. Our vision is to deliver a great bank to startups that helps them succeed.”
Mercury bank for startups as a product has three main components:
User Interface: Startups need to be able to access and do things with the money they have, ideally with some level of efficiency.
The most important question was how to make a great UI. They came up with things like a three-click send money flow, fully-indexed transactions that are searchable and filterable, and routing and account number displayed in a logical location. This also extends to having quick, competent customer support and providing great APIs to let customers build things on top of their Mercury account.
Financial Services: Startups usually have raised money or are making money. They should have transparent and responsible ways to make smart decisions with their capital.
To begin with, access to savings accounts that earn either 1 or 2% on deposits to everyone that signs up. Down the line, they hope to be providing further ways to maximize how much a customer makes on deposits (“treasury management”) and startup-friendly loans.
Company Insight: Banks have all the data on what’s happening in your company. Companies should be able to access that data and see their financial health from a central HUD.Right now, they have basic analytics tools. The short term roadmap includes expanding these and also integrating across the customers’ financial stack (e.g. Stripe, Square, Gusto) so you can visualize what’s happening with your company with one click.
How to get an US Bank account remotely?
Click on signup on the Mercury.com website.
Fill in your Company account and bank details
Your account will be ready to use in matter of days.
Conclusion
Mercury is truly a bank for startups. It prioritizes the efficiency of the startup rather than the bureaucracy of a bank. It takes less than 10 minutes to sign up for an account and 2 hours to get activated. Here is a banking product that moves at the same pace as the startup.
By streamlining the banking process into a viable product, Mercury has achieved a balance between efficiency and beauty. The main goal was to make people want to log into their bank accounts every morning. I would say that they have achieved this spectacularly!
Are you a startup looking for a good bank to fund operations? Mercury bank provides you an instant bank account in the US! Get onboard now.
If you are looking to remotely setup a US company, you can avail my consultation services.
Will it work with Stripe?
Yes. You can setup the stripe payout with Mercury bank.
In Dashboard -> Settings you will see Bank accounts details. You can enter the Mercury bank account here to receive your payouts.
Funciona con paypal?
Yes you can use this bank account with PayPal.
How to deposit money on my Mercury bank account after the opening, Internationally???
Hi Sanjay,
The best option is to get customer payments into mercury bank account.
If you doing your own transfer, use international wire from any bank.
Hello, Appreciated if anyone can send me an invitation for to open an account.
Hi Victor,
Anyone can signup for Mercury Bank Account. There is no invitation needed.
How long does it take for a business account to be opened? I did the online application today and got a notice saying they would get back to me by Jan 23rd. Does it take that long?
Typically account opening is completed in a day or two. May be they have backlog from Christmas holidays.
Can i pay to walmart through its debit card.
Yes Muhammad Malik.
You can pay at any store(including Walmart) using the mercury bank debit card.
Can I link it with my PayPal and my PayPal will be USA PayPal instead of international PayPal?
Can I use the debit card to shop via online us retailers because most of them, they accept cards issued on USA?
Is that safe or are they going to shutdown any time and lost money that will be there?
Hi Amr,
Yes, you can use it with Paypal. However PayPal does not provide option to change country. You will have to signup for a new Paypal account with US address, phone number etc.
You can use the mercury bank debit card to shop online and it will treated same as other US bank cards.
They just got started and founder has a very good credibility. Your money is also insured as per US government rules. I don’t think you need to worry about they shutting down 🙂
Hello Sandeep,
Your article has explained everything that I needed to know about Mercury bank. Thank you for taking your time to come up with this.
Hi Sandeep,
Thanks for the info.
Do you know if the Mercury debit card can be used internationally, or only in the US?
Hey Mark,
Mercury debit card is powered by Visa. It can be used internationally, wherever visa is accepted.
Hello Friend, i’m interested in this bank account but i’m from Venezuela and now i’m living in Chile and i don’t know how to setup a US company remotely, can you recommend me any service that can help me with this? or can you help me?
Thanks for the info
Hi Johan,
I recommend you to mail Mercury bank support asking if they will allow you to open account. If they reply positively you can register a company.
Stripe Atlas is mostly used by international founders for incorporating US company remotely – https://www.stripe.com/atlas
You can also mail them asking first about bank account.
Hello Sandeep,
Which address will be used in your Debit Card billing address? Your home country’s or US mailing address?
And how do you manage Taxes? Can you tell us about US substantial presence test
Regards,
Hi JB,
The address you provide for the company will be used for debit card. I used Delaware address by VirtualPostMail. Later they forwarded it to home country.
I use Pilot for bookkeeping and GreenBackBusiness services for tax filing. Check this tax obligations page by Stripe for details – https://stripe.com/docs/atlas/tax-obligations
You can use a co like OneDayCorp I just used them to setup my Delaware LLC that will be used with Mercury Bank account.
Please do your own due diligence.
Thanks for sharing, Rakesh.
How much did it cost? Considering cost is similar to Stripe Atlas what were the reasons to choose them over Atlas?
I opened a Mercury account based on the recommendation, however they charge hefty amount on sending money internationally.
A wire transfer of $1000 will cost you $62 until it reaches your bank account. $20 by Mercury and $42 by their correspondent bank. I did a transfer to ICICI bank and it cost me $62 in total before it hit my account.
They are not clear themselves about the wire transfer charges, I think it’s a good solution but not reliable at the moment.
The support takes ages to reply.
Hey Neeraj,
Mercury founder explicitly stated that there are no intermediatery fees in this tweet to me – https://twitter.com/immad/status/1199814911703969792
You can probably tweet to him on the same thread or write to support with link/screenshot of the tweet.
Stripe Atlas
Yes, you can signup for mercury bank if you have incorporated through Stripe Atlas.
Hello Friends,
Formation of LLC and opening bank account in the US prior written permission from RBI is a serious violation of FEMA. Resident Individuals, companies should take prior permission else face huge penalties, ED notices and much more.
Most of the CAs in india violate FEMA due to lack of knowledge.
Hi Vineet,
Setting up of US entity can be done under automatic route of RBI for most cases. There is no pre-approval required. More information is available at https://m.rbi.org.in/Scripts/FAQView.aspx?Id=32
However every ODI needs to be reported through designated AD bank. Equity money needs to transferred through AD bank and proof in terms of share certificate has to be submitted. There is also annual compliance requirement of FLA(can be filed online at http://flair.rbi.org.in) and APR(annual performance report).
I will try to write detailed post on these as well.
Detailed post on filing RBI Foreign Liabilities & Assets (FLA) return is now live at https://sandeephegde.com/blog/rbi-fla-reporting-flair/
Hi Sandeep,
Thanks for this information.
I setup LLC in Delaware as it is popular destination for tech startups. Later I found that Wyoming is also a good state to setup LLC.
However, could you let me know the reason why stripe Atlas only incorporates in Delaware and no other state?
Thanks to special provisions by IRS that sole member LLC which is US- Foreign owned disregarded entity has no tax obligations in USA provided they submit form 1120 and form 5472 before 15 of April every year. Also,, foreign sole member LLCs should not employ and have assets to get benefited from this tax liabilities in USA under the above mentioned criteria in order to get tax exemption in USA but needs to pay taxes in India as the income gets generated here.
However, this is not applicable for corporations.
So my question to you is why does stripe Atlas not include ITIN in the initial company setup? as founders of corporations needs to pay US taxes. And to file tax returns in USA you need an ITIN.
Hi Vineet,
Delaware is the most popular destination for incorporation and it’s probably easier for Stripe atlas to just have one state for incorporation. I cannot answer why Stripe is not doing certain things.
Having said that, Incorporating a US entity and opening a bank account remotely was a big deal few years ago. Stripe Payment gateway needed US incorporation and US bank account, which was taken care by Stripe Atlas. There are plenty of other companies that offer book keeping and tax filing services.
Further if you are a solo founder from India, the easiest option is proprietorship. You can file you individual tax under section 44AD calculating income at 6% percent of total turnover on digital payments upto INR 2 crore. There is no requirement of book keeping or audits.
Can I get credit card from Mercury for my newly formed LLC?
Hi Izzatullo,
Mercury bank currently provides only debit card. You can apply for credit card from Brex.
Hi! thank you for this detailed explanation. I live out of the US and was wondering can I open a company in Delaware, sign up for Mercury and connect it to Stripe on my ecommerce website. I will not sign up for Stripe Atlas. Will this work? Thank you
Yes, Sue.
Delaware or for that matter most states in US allow non-residents to incorporate companies. Once the company is incorporated you can open mercury bank account remotely. You will also be able to signup for stripe with EIN of US entity and connect Mercury Bank Account.
It’s good to see Imad is from 3rd world country, Pakistan and he might feel for internet entrepreneurs from such countries but do you know what a worse experience I had with Mercury bank and it’s the support team? the support team has no phone number to call they only available for email chat. since my balance got negative because facebook charged offline transaction without having enough balance and that wasn’t my mistake mercury let them charged it and that’s not my mistake since then Mercury become evil for me they declined my multiple transfers which I made to make my balance positive then again somehow I managed to make my balance positive then someone form support emailed me asking for 8-10 additional information which I provided each and everything and they said I can no longer use my mercury bank acc because they have issues with validating my US operations, seriously? your bank says you guys welcome non-resident US LLC owner with US COMPANY AND EIN but now they asked me questions 10 times more than PayPal and blocked me just like PayPal after holding my account for 3 weeks. every Non-resident US company owner should be beware with them because they might suspend anytime they want because they have the power to do that. I asked a lot of questions to Imad on twitter before I opened Mercury bank but now ended up having worse experience ever I had with any financial institution. because of mercury, I had to lose so much opportunity and I even gave this account to many companies where I work so and which I might get payment after a few months so it’s really frustrating. PRETTY WORSE SERVICE AND EXPERIENCE HERE AND I ALWAYS FELT THEY WANTED TO BLOCK ME BECAUSE THEY TOOK THIS PERSONALLY.
I am open for debate with anyone from Mercury regarding my mercury bank account. anyone here?
Pros: GOOD UI
Cons: Live chat never replies, worse support experience. they hold your money like PayPal, THEY BLOCK YOUR ACCOUNT WITHOUT REASON just because they want to. error on the transaction.
Hi Basanti,
I don’t think there is anything personal here. Government would have lot of regulations on the banking sector and certain type of businesses. Could be the same reason why Paypal also blocked your account. But I think they should let you know the reason they blocked your account.
Please try twitting to Immad and ask for the reason they blocked your mercury account.
Hi! I need the document to approve address on paypal, I have US LLC and I need bank statement from bank. Do you know there is address on Mercury bank statement?
LLC in Wyoming – Mercury don’t accept – you will receive “REJECT ANSWER” and all. Nothing information or more you don’t receive.
But from Delaware LLC – Mercury accept application simple and quick.
Wyoming LLC would be legally eligible entity. I don’t think there is an outright rejection but it could be based on nature of business.
Hey you’ll I have signed up for a Mercury bank account for my company. On March 26 they will email me about my account. Let’s see.
Many people believe that they get advantages by opening an account outside the country, but indeed it is a solution that has advantages and disadvantages. It is, therefore, necessary to carefully evaluate how to act and weigh different situations, starting from the country were to open the online checking account since not all of them are that convenient. The opening of an online account allows us to access a series of advantages that traditional banking does not offer in many cases or, at least, not under the same conditions. The suggestion to find the best foreign online bank account is to rely on the web to make preventive comparisons, by visiting the most significant number of banks’ websites to get an idea of the offer. However I believe if someone willing to open a online bank account he/she can check the article [link redacted]
Hola esta cuentas de mercury bank funcionan con zelle?
Hello, do you know if Mercury Bank cooperates with Brex so it would be possible to get the Brex Credit Card since Mercury Bank does not provide credit cards yet?
Hi Kamil,
You should be able to use Mercury Bank account with Brex.
You might also want to check “Brex Cash” Account.
Hello, does this mercury bank account work with zelle?
Sandeep my son has an account in mercury.he has a startup.he was supposed to receive a big payment from a company.the company has already sent it,for which they have given us the details.that was 5 days back.somehow the payment has yet to come in my son’s account.they have said that they are facing processing problems and have changed the processor.but I doubt them.will my son lose his hard earned money?they say it will take 5 more days.should we seek legal help?please help.
Hi Yogesh,
Was it an international wire transfer? International wires typically take several days to hit the account. You might also want to cross check that the sender has used correct details. If the transaction fails, money goes back to the sender.
I would say it is too early to seek legal help. Mercury support team (help@mercury.com) has always been helpful. If you have their response over email that should be a good written record for you.
Is this personal account or a company account?
Hi Ae,
Mercury provides company accounts only. You need to have LLC or C corp incorporated in USA.
Hi Neeraj,
Can you kindly help me. I need few details. you can contact me @ wwwsoldiers@outlook.com
Hi Jay,
Please post with details/questions.
If you want to talk over phone, you can schedule a call at https://sandeephegde.com/consulting/
Hi
I guess it’s one of scam as you can easily find lots of negative feedback on trustpilot and even I had same experience they will not allow you to take out huge money from their bank and just toake some interest they will suspend your account and return your money in cheque in 60 days.
I strongly disagree that it’s bank for startups.
Even account opening took 10 days as average.
Mat be through stripe Atlas they might be taking less time.
Please go through trustpilot review and you will get genuiy customers feedback.
Save your self ?
You probably did not provide the necessary documents. I have a wyoming LLC took about 3 verification and 20 days to get my account approved.
I own an LLC in Florida. They refused my application. However, I provided all the documents, and the right information. Someone would know why and how to remedy it.
Hi, I am from bangladesh. i already confirmed a company formation LLC. I know my bank account will be opened from mercury. i was looking Some offer from the page they want credit card to verify address, even your bank is not giving credit card. being a non-us business man how can i get a credit card from usa. if yes, yes their any credit limit also?
my another question is: my plan is wholesale of ready made clothing. i want to take payment in my mercury bank account through debit card and credit card internationally. can i setup merchant account in your bank with my company account?
Hi, how did you solve your problem? We are currently trying to open an account in Mercury.
Hi Sandeep,
Can the Mercury Debit Card receive instant payouts from Stripe?
If not, do you know of any alternative for non-us residents?
Thank you!
Hi Man Hua,
Yes, Mercury Debit Card can receive instant payouts from Stripe.
Mercury banking services is provided by Evolve Bank & Trust. Stipe has officially mentioned Evolve Bank & Trust in the list of banks that support instant payouts – https://stripe.com/docs/payouts/instant-payouts-banks
Hello Sandeep,
Is it possible to write a blog on all legal compliances to follow for an Indian if he forms an LLC in the US please? I’m fed up while searching for the information online..! One of my CAs is not aware anything about compliances in this scenario.
Thanks in advance bro
Hi Veeresh,
Thanks for the suggestion. I will try to write about it.