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Offshore High-Risk Merchant Account Transaction Volumes

When considering an offshore merchant account, there are a few factors to evaluate. There are also certain features that must be included to offer your services. 

Before diving too deep into research, it goes without saying that you must seek a provider that at least offers first-rate customer service and exceptional value compared to other competitors.

Why Do You Need An Offshore High-Risk Merchant Account?

If you happen to run a business that generates a considerable amount of transactions on foreign soil, you will need to ensure that you receive your payments in the local currency.

You may even run a business that is considered “so high-risk” that securing a high-risk merchant account in your home country would be impossible. 

Offshore merchant accounts address these issues and so much more. Having an offshore merchant account that includes an acquiring bank in the same market you do business in is highly beneficial. It facilitates the acceptance of the currency your customer base uses and it benefits your business when it comes to filing your taxes.

Another great advantage of having an offshore high-risk merchant account is that international banks are more willing to allow a higher processing volume than US banks. 

Having a diversified number of merchant accounts also protects your business by not putting all your eggs in one basket. You do not want to rely on a single merchant account to process all of your transactions. This is especially true in certain countries where cultural mores might prohibit the selling of your products.

Another plus to pursuing an offshore high-risk merchant account is that banking regulations are a bit laxer in other countries. Banks and processors are generally more open and willing to work with high-risk merchants. 

Minimum Transaction Volumes

One aspect of offshore high-risk merchant accounts that merchants must be aware of is meeting the monthly transaction volumes every month. This can vary significantly, based on the provider. 

Basically, your business must generate a minimum amount of transactions. It also requires you to pay a minimum amount of monthly processing fees. If your business meets this requirement, there is no need to pay anything beyond that.

By obliging businesses to generate a minimum amount of revenue for the provider every month, it eliminates the potential to incur a loss on your account. 

If you do happen to fall short of this minimum transaction volume, you will be subject to pay the difference between the minimum and the actual processing fees. 

Furthermore, each merchant account provider has its own method of calculating your processing charges to gauge whether or not you have reached your minimum. Many providers don’t attach any additional fees to make this determination. 

Generally, the only amounts that count towards meeting your minimum will be processing charges. These are paid directly to your provider. 

Larger, more established businesses will not need to be concerned with this monthly minimum. Their monthly volumes will surely surpass the minimum requirements. 

However, small, newly-opened businesses should be concerned as meeting these monthly minimums could prove more difficult and can ultimately impact their cash flow.

A new business struggling to launch will face more difficulty in paying these additional penalties for failing to process enough. 

Monthly Minimums Growing More Unpopular With Merchants

Merchants have opposed the monthly minimum. And they are beginning to push back. At least, via negotiation. Many providers are catching on and are allowing merchants to negotiate to reduce the monthly minimum. Some offer waivers for this expense.

The growing unpopularity of these monthly minimums has urged providers to drop this requirement altogether. 

Merchants should first read their contract carefully to ensure this has been adopted by the provider. If they really want to work with your business, they might be willing to drop this policy if you ask.