Being informed that you will have to “resort” to offshore credit card processing doesn’t have to come across as if it were a death sentence. Many business types, mostly the type considered high risk by local banks such as IT Tech support, nutraceutical, and travel, will find it hard to get approved for a domestic merchant account. Many others, such as, adult sector businesses, online gaming and gambling and MLM will simply themselves with no choice but to go offshore. But for the majority of these businesses, and many other businesses who aren’t forced to, offshore processing could actually be a benefit for their business models.
Domestic banks tend to have a lot more regulations than their foreign counterparts in other countries. They are not only watching their own bottom line, weighing risk but also plagued with monitoring public perception making sure their reputation is inline with their target market. Which is everybody.
Sure there are some downsides to an offshore merchant account for your payment processing needs. The types of things that are often lamented about in articles about the pains of payments processing for high risk business. It can be quite difficult to find a reliable and honest processor to represent your business. Offshore merchant accounts do come with higher costs than domestic processing. Costs can typically about 4-10% depending on business type and prior processing history. Most offshore merchant accounts do not offer daily payouts and merchant funds are instead wired weekly. These are just some of the common traits of processing offshore that make merchants concerned with the option of an offshore merchant accounts.
But, when you consider the benefits that can be realized when you take your credit card processing offshore you may just find that they outweigh the downsides. And, of course, when you choose to set up your offshore merchant account with a reputable Merchant Service Provider (like Bankcard Brokers) that makes it their mission to make sure you always have fair and transparent services you won’t have to feel like you have get stuck with the bad just to accept payments for your business.
Some business types will frankly only benefit from some of the specific characteristics that come along with processing outside of the U.S. Here we are going to talk about 7 reasons offshore processing might actually be good for your business.
- Offshore banks have more lenient underwriting.
They are not confined by investors, possible “brand damage”, perceived risk and federal restrictions in the same ways that our domestic banking partners are. This allows them to offer merchant accounts to more business types than domestic banks.
- Offshore banks often have much higher processing (if not unlimited) processing caps.
For many businesses with particularly large transaction sizes or rapidly growing sales volume this is good. Oftentimes, domestic banks will put a cap on the amount a business is allowed to process in a given transaction forcing the business to wait until they can have the cap lifted or call and ask for a special exception every time they need to complete a transaction that is above their cap. Also, startups with projections of high sales are often capped at a low amount limiting the amount of sales they can conduct until they have gained some processing history. The The lack of these low caps can have a huge impact on the success of certain businesses.
- Offshore banks will work with TMF (terminated merchant files) & businesses with higher than 1% Charge-Back ratios.
Domestic banks will require merchant account owners to keep their credit card chargebacks below 1% of their processed transactions. For certain businesses this is just difficult to maintain simply due to the nature of the business. Offshore banks will tend to be a bit more lenient with chargeback ratios and will give merchants who have unfortunately landed themselves on the list for terminated merchants a second chance. In the states, most banks will not work with a merchant once they are on the TMF.
- Open your doors to the world – increase sales.
This one goes hand in hand with reason 5 and 6. Having an offshore merchant account means that you are able to sell your products world wide, increasing your global reach and ultimately increasing your sales volume.
- Multi Currency and Multi Lingual support.
With the World Wide Web right at our fingertips there is no reason why you shouldn’t want to get your products or services into the hands of whoever needs them. But, Often domestic banks will not permit sales across borders, or choose to support gateways that can perform dynamic currency conversion. All of which are absolutely necessary for you to succeed in expanding your market to other countries
- Tax advantages with the use of an offshore account.
There can be large tax advantages that may be realized by processing your payments with an offshore bank. Because we do not claim to be tax accounts, you will always be advised to check with your CPA for information on the ifs and hows of any tax implications with an offshore merchant account.
- Oftentimes offshore banks will assist or handle your overseas business registration.
There is certain benefit to a little hand holding when it comes to certain tasks. Registering your business in a foreign country is definitely one of them. This benefit will allow you to rest assured that no mistakes have been made and that your business is up and ready to process payments without a hitch.
So whether you operate the type of business model that domestic banks are too fearful to work with or you would like to take your business global while reaping the benefits of fewer trading restrictions and generally avoiding all the red tape involved domestic rules and regulations, an offshore merchant account may just benefit your business model more than it hinders it.
Bankcard Brokers is a leader in servicing the high risk industry with their merchant account needs. Because we specialize in high risk payment processing we know offshore merchant account limitations and benefits better than most MSP’s. Our team of ETA Certified Payments Professionals are highly educated in the payments realm holding the only certification that is offered in the industry. Because of this we are dedicated to bringing our clients the absolute most credible, transparent, and dependable merchant solutions. Becoming your lifelong trusted resource for merchant services is our main goal at Bankcard Brokers. We pride ourselves on providing world class customer service not commonplace in the industry. We strive to create a winning business relationship by providing our clients with a secure and reliable payment processing system that is curated with their success in mind. Give us a call today and experience the Bankcard Brokers difference!