Offshore High-Risk Merchant Account Providers: Why You Need One
A high-risk merchant account is a way that merchants can process credit cards online so they can accept payments. There are many providers of offshore high-risk merchant accounts. The difference between a high-risk merchant account and an offshore high-risk merchant account depends on the provider.
If you choose to get an offshore high-risk merchant account, you will need to know how to find a reliable provider that is the ideal option for your business.
What Is The Difference Between A Normal High-Risk Merchant Account And A Offshore High-Risk Merchant Account?
There are a few specific differences between a regular high-risk merchant account and an offshore high-risk merchant account.
Domestic vs Foreign
The most apparent difference between these high-risk merchant accounts is where your business is incorporated. A high-risk merchant account is based in your home country, but an offshore high-risk merchant account can be based anywhere in the world. High-risk merchant accounts are subject to United States laws and regulations, and offshore high-risk merchant accounts are not.
A high-risk merchant account typically has lower processing fees than an offshore high-risk merchant account. An offshore high-risk merchant account can have higher fees for a couple of reasons:
- High-risk nature
- Possibility of processing foreign currencies
Typically a high-risk merchant account application takes longer to process than an offshore high-risk merchant account. Domestic banks tend to do more due diligence for a high-risk merchant account than an offshore high-risk merchant account. Offshore high-risk merchant accounts aren’t subject to these regulations but are dependent on the requirements of the individual country in which you are applying.
Why You May Need A Offshore High-Risk Merchant Account Provider
Offshore banks can offer higher approval rates, and offshore payment processing can be needed for several reasons, but most commonly, a merchant is unable to attain approval in the United States due to the industry they are in. Industries that can benefit from an offshore high-risk merchant account provider include:
- Accounting or bookkeeping
- Background check companies
- CBD and hemp sellers
- Collection agencies
- Credit repair companies
- Electronic cigarettes
- Coupon membership club
- Furniture Companies
- Government grants
- Hair restoration
- Magazine subscriptions
- Online auctions
- Payday loan companies
- Tobacco retailers
- Travel agents
- Skincare product companies
- Weapons sellers
- Web hosting
- Adult Industry
- Pharmaceutical companies
- Credit card services
Besides having a business in these industries or any other high-risk business, there are other reasons your business may benefit from an offshore high-risk merchant account provider, including those who aren’t approved for typical banking due to their business’s credit history. Banks in the United States can decline a high-risk merchant account application for other reasons, including:
- The company has no credit or poor credit history.
- A business owner with a negative credit history
- A high chargeback ratio
- The owner of the company resides in a foreign country, or isn’t a US citizen
- Transactions are done internationally or with foreign currency
- The business has irregular sales patterns
- Transactions occur in a high volume or high dollar amount
What Are The Benefits Of Using An Offshore High-Risk Merchant Account Provider?
Offshore high-risk merchant account providers offer a variety of benefits for your business, including:
- Providing Access To Markets Worldwide: Offshore merchant account providers offer businesses the ability to access worldwide marketplaces and help them to develop a reputation as a trustworthy global business.
- Multi-Currency Support: Offshore high-risk merchant account providers also offer multi-currency support, allowing a business to accept payment in several different currencies worldwide.
- Prevent Blocked Transactions: Working with an offshore high-risk merchant account provider can prevent lost business through blocked transactions. Traditional banks often flag transactions from foreign countries with high rates of fraud and block the transaction. In most cases, offshore high-risk merchant account providers offer currency conversion services that convert foreign funds to local currency to prevent blocking transactions.
- Ideal For A High-Risk Merchant: With a traditional account, an application from a high-risk merchant will often be rejected, so it isn’t easy to run their business. Partnering with an offshore high-risk merchant account provider that specializes in these types of accounts can keep your business up and running.
- Lenient Restrictions: Offshore high-risk merchant account providers offer lenient restrictions to help high-risk businesses. They have a more relaxed legal and banking framework for simplified business operations that can reduce costs.
- Tax Rates: Having an offshore high-risk merchant account provider could benefit your tax rate. Tax rates are dependent on the country in which your account resides. Each country has its own tax laws.
- Payment Processing Flexibility: An offshore merchant account provider can give your business flexibility with payment processing. They allow you to accept international payments in various methods, including local methods, debit cards, ACH, e-check and more.
- Privacy: Offshore high-risk merchant account providers offer more privacy than domestic providers because they aren’t subject to the same regulations.
- Deposit: No upfront deposits except for extremely high-risk offshore businesses.
- Volume: Offshore high-risk account providers are liberal with business volume limits and generous volume caps for offshore businesses that process high volumes of payments regularly.
Features To Look For In An Offshore High-Risk Merchant Account
There are several features to look for in an offshore high-risk merchant account, including:
- Processing Hardware: Such as POS systems and credit card terminals
- Payment Gateway: A strong payment gateway with an online account dashboard
- Virtual Terminal: A virtual terminal for mail-order and telephone-order businesses
- Processing System: A smartphone or tablet mobile processing system.
- Multi-Currency Options: The ability to process multiple currencies to prevent spending on currency conversion.
- Currency Conversion Service: Most offshore high-risk merchant account providers have built-in currency conversion services.
- Anti-Fraud: Offshore high-risk merchant account providers offer a higher degree of anti-fraud protection because of the increased risk of fraud.
How To Choose The Best Offshore High-Risk Merchant Account Provider
While most offshore merchant account providers specialize in high-risk accounts, not all high-risk payment processors work with offshore merchants. Before applying for an offshore high-risk merchant account, ensure that the provider you are considering can work with a business located in your country.
Providers that specialize in offshore high-risk merchant accounts can typically get you an account around the world with a few exceptions, such as Afghanistan and North Korea. These countries are limited due to political reasons and instability.
Look for an offshore account provider with a currency conversion service, strong anti-fraud security, and a secure payment gateway. To choose the best offshore high-risk merchant account provider for you, follow these tips:
- Ensure your account includes fraud prevention to protect your financial data
- Consider registering your business in the country where your account is located or choosing a provider where your business is located.
- Compare multiple providers and choose the one that offers the best prices and terms.
- Closely review all contracts before signing up for a specific provider.
Tips For Applying For An Offshore High-Risk Merchant Account
When applying for an offshore high-risk merchant account provider, you will need to have the proper documents in order. The requirements will vary depending on the provider and the country, but here are some basic things you need to apply.
- A copy of your driver’s license or passport
- Three months of bank statements for your business
- Six months of payment processing statements
- Business documents such as your Articles Of Incorporation
- A void check from your bank from which processing will occur
Typically, allow 7 to 14 business days for your offshore high-risk merchant account to be approved.
Offshore high-risk merchant accounts can be an excellent solution for businesses that were denied for a typical merchant account, have had their account canceled by a domestic bank, or process a large volume of sales in a foreign currency monthly.
Pairing with an offshore high-risk merchant account provider can provide you with an account to perform business. Ensure that the provider you choose provides adequate security protection against fraud, offers you the best terms, and ensures that you review all the terms before signing for your account.
Doing your research and partnering with the best offshore high-risk merchant account provider for you can keep your business running smoothly.