Thankfully, we are in 2011. We are in an internet age, where businesses can be started with minimal capital from your bedroom with just a laptop and internet connection. If you happen to start your new internet startup in the UK though, you may find yourself at a severe disadvantage.
I'm not talking about a lack of available skills, ideas or reliable internet connections, we have those. Once again I am talking about the banks...
We're about to launch the new Meetupcall website, and one of the things we intend to provide is something the is requested at least once a week, if not more, by our customers. The ability to sign up and pay for our services by credit card.
It didn't take us two years to figure out our customers would want to pay by credit card, we knew that when we started back in 2009. It did however take us two years to get accepted for a credit card merchant account. Apparently taking payments over the internet and recurring billing is a big risk to the banks and one they are not prepared to take.
This is a problem. Pretty much all new software and services will be delivered via the cloud on a subscription basis, and most will be paid for by a credit card. It's a massive market and area of future growth ideal for a 'knowledge based' economy like ours, but if UK startups and developers are unable to bill online for their applications or services then we will miss out on this opportunity. While UK entrepreneurs struggle to get something as seemingly simple as a credit card merchant account our counterparts in the US (where it is easy to get a merchant account) and Europe will flourish.
Internet based services are the current big market for entrepeneurs, and if startups cannot get approval to take credit cards or even get to speak directly to somebody who can make a decision, then we are seriously handi-capping ourselves for the future.
I think the long and short of it is that big banks in the UK do not care about small businesses. Big banks do not make big money from small businesses so at the moment they are not even wasting the time entertaining them. The banks have got the economy into this situation and now they are seriously hindering the people who can get us out.