What Is An Offshore Merchant Account: The Definition
What is an offshore merchant account? It is a type of bank account for e-merchants established in a non-resident country. It allows the merchant to process payments through their website and allows other transaction processes.
The Basis Of An Offshore Merchant Account
Many internet based businesses, especially those in the high risk category face obstacles in opening merchant accounts especially through banks and domestic account providers.
Local banks are usually conservative and require merchants to furnish a number of documents and present a past credit history of transactions. This makes the merchant account procedure to be time-consuming and at times futile.
For such online firms, it is feasible to opt for an offshore merchant account.
Local merchant account providers may not allow a high volume of sales and if merchants are aiming to increase their sales projections steadily they should opt for an offshore merchant account.
An offshore merchant account will be discrete in its dealing and allows funds to be transferred anywhere.
Offshore merchant accounts also provide tax as they will be based in countries where there are no tax liabilities.
Online businesses that are likely to benefit the most by opening an offshore merchant account include adult entertainment, Internet drugstores, casinos, sportsbooks, electronic cash, imitation products, tobacco items, travel-based, and biotechnology.
Ordinary payment processing is complicated. But finding good offshore, international, or high-risk payment solutions can be a real nightmare. If you fall into one of these categories, you’ve likely had your merchant account applications denied at least a few times. Even worse, perhaps you’ve had your processing service terminated and your money withheld from you for months. We understand your struggle. We’ve seen hundreds of businesses go through the exact same thing, and we’re here to help you find the perfect offshore merchant account for your high-risk business.
While many offshore merchant account providers also specialize in high-risk accounts more generally, not all high-risk processors work with international merchants or provide offshore accounts for domestic merchants. Many high-risk specialists only work with US-based businesses, and only provide accounts through US-based banks and processors. Before you apply for an offshore account, you’ll want to confirm that the company you’re considering works with businesses located in your country. This information might be spelled out explicitly on the provider’s website, or you might have to talk to their sales staff to get a confirmation.
Providers that specialize in setting up offshore merchant accounts can usually get you an account in just about any country around the world, though obviously, there are exceptions. As a US-based merchant, don’t expect to set up your offshore account in a place like Afghanistan or North Korea. It’s simply not going to happen. With the exception of countries limited by political considerations or a high level of instability, however, the possibilities are wide open.
High-risk merchant accounts are notorious for including higher processing rates and account fees, and offshore accounts can be even worse. Providers know you’re particularly desperate and some, but not all, will take advantage of your situation by charging you as much as they think they can get away with. We recommend that you shop around and compare multiple quotes when looking for an offshore account. Don’t accept the first offer from a bank or processor just because they’re the first one that hasn’t rejected your application due to the nature of your business.
Having a hard-to-place business doesn’t mean you have to run your company through Bitcoin. You can accept credit card payments just like any other business by finding a payment processor that will set you up with the right acquiring banks. At the same time, you need to be fully aware that, for a US-based business, signing up for an offshore merchant account is a risky endeavor. You’ll want to be very cautious and carefully research any provider you consider, even the ones we’ve recommended above. Take extra care to protect your sensitive personal financial data and be sure your account includes additional fraud prevention features. You might also want to consider registering your business in the country where your merchant account is located – just in case. Having a merchant account in Panama might sound very tempting if you’ve been repeatedly turned down by domestic providers, but it will be very expensive to have to travel there in person if you later run into legal troubles with your account provider.