This is a business post by Alexandra.
In the world of digitalization, it has become vital for every seller, particularly online ones, to offer credit and debit card services. It gives comfort and speed to the consumers. However, providing this service brings risks. So what is the solution?
The easiest solution to this is to go for a merchant account. Various services help merchants avail themselves of the facility of credit and debit cards. One of those services is offshore credit card processing. The question is why it is vital to open an offshore credit card processing account.
Learn what offshore payment processing is and the reasons to open one such account.
What is Offshore Payment Processing?
Offshore payment processing makes it easier and accessible for e-commerce sites to accept debit and credit card payments from some significant card companies, such as MasterCard and visa.
It provides several benefits to the account owner. Some of them are mentioned below.
- Possible Tax Benefits
- An Offshore bank usually offers leniency.
- Provides High volume solutions
- It gives access to new, emerging markets.
- It offers easy and quick company registration.
Reasons to Get an Offshore Merchant Account
Are you an old player in the industry, so you are not thinking of an offshore account? You might be wrong. No matter in which industry you are functioning or how old your business is, offshore credit card processing will give you benefits in various ways.
Here are the top four reasons to open an offshore merchant account.
- If You Get Involved in a High-Risk Business
You might have heard everywhere that you should get an offshore business account if your business involves high risk. However, the question is which type of business is considered as high-risk ones.
If your business is a start-up or a young one, you might require an offshore merchant account. Also, if your business poses certain risks, such as excessive chargebacks or poor business credit, you should get such an account.
Here is a list of businesses that usually involves high risk.
- Online gaming and sports betting
- Ticketing services and travel agencies
- Cannabis-related products, such as CBD and its psychotic counterpart THC)
- Nootropic and nutraceutical supplements
- Any weapon or weapon part, such as ammo, knives, stun guns, guns, butts, magazines, and triggers.
- SEO Services
- Check cashing services
- Collectible coins, currency, and autographed
- Tech support for any industry
- Loan merchants and online lending
- Debt collectors/collection agencies
- Adult entertainment includes adult telephone conversations, companion or escort services, adult toys, and matchmaking services.
- Hypnotists or self-hypnosis services
- Continuity based subscription or billing
- Astrology, horoscope, psychic services, and fortune tellers
- Credit protection, counseling, and debt repair services
- International shipping, export/import, and cargo
- Financial consulting, loan modification, and finance brokers services
- Sweepstakes or lotteries
- Medical care program
- Merchants on terminated merchant file list or MATCH
- Music, movies, or software downloads or software uploads
- Multi-level marketing
If your business does not fall in these categories, you can go for other ways to check whether it is a high-risk one or not. The table below will help you with it.
|Factors||High-Risk Ones||Low-Risk Ones|
|Average monthly sales volume||Over $20,000||Less than $20,000|
|Average credit card transaction||Over $500||Less than $500|
|Offer recurring (subscription) payments||Yes||No|
|Placed on the MATCH list or history of excessive chargebacks||Yes||No|
|Consumers in high-risk countries, such as Japan, US, Australia, EU, and Canada||Yes||No|
These factors will help you decide your category, and you can accordingly plan for a merchant account.
- If You Want to Safeguard Your Assets
Did you know America comes under the top 5 for both lawsuits and lawyers per capita? It means that carrying a business in the United States comes with certain inevitable risks. It is unfortunate but true. Many consumers are looking to earn quick bucks without caring what it costs for anyone else.
Imagine a situation where someone hits you with a lawsuit. The court’s decision came in your favor, but in the journey, you lost a lot of time and money. Most big companies can afford such losses but not the small ones. They cannot lose their vital and limited assets in a court case.
So, if they have an offshore merchant account, it becomes challenging for others to put a case on you. However, if someone files a case against you, a merchant account allows you to continue your business as usual while paying the legal fees. That means that the risk of lawsuits on you automatically decreases.
Investing your assets in distinct fields is always a good strategy, regardless of the industry you are operating in. Since America has been known for its frivolous and legitimate lawsuits for a long time, there is a high chance that you also become a part of it. In such a situation, your finances take a long time to come to an end.
Also, as a merchant, there is a continuous risk of encountering bank issues, whether because of excessive chargebacks or other areas. In any situation, the bank might freeze your processing capabilities. In such cases, an offshore merchant account can save you.
- If you Want a Non-United States Banking Solution
Many Americans believe that the American banking system always does right. It can do no wrong. However, the 2007-2009 recession opened the eyes of many such believers. In those times, overseas accounts saved many businesses and their assets.
It is an unavoidable fact that many of the safest banks in the world are outside of the US. Having an offshore merchant account ensures that your resources are independent of domestic instabilities. It also ensures that some world-class institutions maintain your account.
These are the top four reasons people prefer an offshore merchant account.
There are plenty of reasons that might attract you to an offshore merchant account. Some of these reasons are visible, while others are hidden. It is always better to contact a service provider who can analyze your business and suggest whether your business needs an offshore account or not.