Offshore Merchant Account
Offshore high-risk merchant accounts are a great way to accept payments from international buyers. They provide the opportunity for business owners to lower their risk and exposure by allowing them to process transactions in different currencies.
Let’s walk through what offshore merchant accounts are, how they work, who needs one, and some of the advantages that you can experience with these types of accounts.
Offshore merchant accounts are very similar to offshore payment gateways and offshore high risk payment gateways.
Offshore Merchant Account Overview
- What is an offshore merchant account?
- How do you get an offshore merchant account?
- Who can have an offshore merchant account?
- Why would you need an offshore merchant account?
- What are the benefits of having an offshore merchant account?
- What are the risks of having an offshore merchant account?
- How much does it cost to set up and maintain an offshore merchant account?
- Will your personal information be safe with an offshore merchant account?
- Is there anything else you should know about setting up an offshore merchant account?
- Can you cancel your offshore merchant account at any time if needed without penalties or fees for doing so?
What’s Required to Get an Offshore Merchant Account?
In order to begin accepting payments, get started today by filling out Bankcard’s simple online application.
To swiftly move the process along, you’ll need to provide the following documents:
- A valid, government-issued ID, such as a driver’s license
- A voided check
- Three months of the most recent bank statements
- Three months of the most recent processing statements, if applicable
- A SSN (Social Security Number) and/or EIN (Employer Identification Number)
- Chargebacks must be under 2%
- A secure, fully operational website. In most cases, it’s ok if the website hasn’t been launched yet as long as there is a working site in a dev environment.
We know that finding the perfect offshore merchant account can be difficult. If you’ve ever had a high-risk business and tried to get approved for an international or offshore credit card processing service before, then chances are your application was denied at least once (or more).
It doesn’t matter whether it’s been because of location challenges or risk factors such as country restrictions on foreign currency transactions; we understand what these risks mean for a business like yours.
This is why our team has created simple, easy-to-manage offshore merchant account solutions tailored to fit each company’s needs.
Why Do Merchants Need Offshore Credit Card Processing?
Who would have thought that processing international transactions could be so tricky?
Some of the most common reasons for needing an offshore account:
- Wanting to accept payments in the local currency
- Having offices in multiple countries and needing separate merchant accounts for each location
- Being considered too risky by a traditional high-risk credit card processor.
But before we get into all those details, let’s take time out from our research and discuss what advantages and disadvantages come with these types of high-risk merchant accounts.
An offshore merchant account is a solution for those internet-based companies that deal in global business transactions. To capitalize on all the opportunities afforded by its positionings, such as tax reduction strategies and banking services abroad, an international company should seek to do business with accounts located internationally; many countries have laws that offer these sorts of companies more regulatory benefits than domestic banks.
The time it takes to open a merchant account for an internet-based business can be nerve-wracking. To do this, you must first provide extensive documents and have had past transactions with the bank in question; otherwise, they are less likely to approve your application. This is especially true if your company falls into a high-risk category because banks are conservative by nature and require that you produce more paperwork before approving your business.
Offshore Merchant Account Vs. Domestic Merchant Account
The major difference between an offshore merchant account and a domestic merchant account is simple. An acquiring bank that issues offshore accounts resides in offshore countries, while the banks issuing domestic accounts reside within your home country’s borders. For instance, if you are living in New York but want to set up an online store for international customers – whether based on location or language preference – then you would need to choose between applying with one of our qualifying acquiring banks located outside of America (Mauritius) or using one from inside the United States (New Jersey).
There are many factors that will determine what route best suits your needs: geographical proximity, the risk level of your business, banking regulations across different jurisdictions around the world, even currency exchange rates can be taken into consideration.
Offshore Merchant Account Benefits
If you’re an international merchant, it can be beneficial to have a local bank in the market where your customer base is located. This will allow you to accept payments directly without having any currency conversions that could take away from earnings while reducing tax liability and minimizing the risk of fraud on customers’ credit cards.
International banks tend to allow higher processing volumes than their US counterparts. This is because they have more customers and can process a larger amount of transactions for each customer’s card at one time.
Different regions of the world have different cultural standards regarding what products are appropriate for sale, so diversification of merchant accounts can ensure that you’re not reliant on one country’s culture or values.
Offshore merchant accounts are perfect for processing payments for merchants who can’t get a domestic merchant account due to the nature of their business.
The banking industry is regulated differently in different countries, which creates a favorable climate for banks and processors to work with high-risk businesses. As a result, there is more opportunity for high-risk companies to secure overseas banking.
It’s important to note that offshore merchant accounts have a wide range of applications. For instance, online businesses such as adult entertainment and casinos are likely the best candidates for this type of account.
The following example discusses how opening an offshore merchant account can be beneficial in certain aspects:
How to Qualify for an Offshore Merchant Account
Depending on what type of business you have, it may be essential to make sure your merchant account is an offshore merchant account. For example, if your company has an eCommerce component or accepts payments from outside the United States and Europe (especially in Germany), this category would apply.
However, not all merchants fall into these categories because even a small one could need such options for their own unique purposes, like accepting credit card transactions from customers overseas who live within other countries requiring higher fraud protection measures than those currently offered by traditional domestic banks today.