What do we understand by the term offshore merchant account?
An offshore merchant account is a kind of bank account that has been designed keeping in mind the requirements of e-merchants doing business in a foreign country through the internet. The merchants are given a platform for processing payments smoothly through their own websites. Other transaction processes can also be completed with the help of an offshore merchant account.
How you can be benefited from an offshore merchant account?
In case of high-risk businesses, offshore merchant accounts are considered ideal solutions for payment. The advantage of this is that offshore banks are more liberal in their transactions with businesses with lesser supposed tax benefits and less trading restrictions. Thus, offshore merchant accounts get approvals at a quicker rate.
Offshore merchant accounts are the most favorable options available to a merchant for growth, especially in high-risk online businesses. There are several interesting attractions. For example, the monthly volume and the potential of process huge ticket items are unlimited. The offshore merchant accounts have the ability to accommodate all kinds of e-commerce businesses.
How can you avail an offshore merchant account?
If you are interested in setting up an offshore internet business on your own, these are the things that you require in the beginning. The first that is essential is a corporation. You also need to have a bank account and a medium through which transactions via credit card can be processed into your bank account. Apply Now with MyPayment Guru to get offshore merchant account without any hassle.
High risk offshore merchant account
The chargeback rates of certain business models and industries are high. So, the credit card processors regard such industries and businesses as “high risk”. Anyone, involved in these trades, has to pay much more for processing of credit cards. Let us have a look at some of the high-risk industries.
- Travel- One of the highest risks is involved in the travel industry. This is because transactions for vacation packages and airline tickets involve huge sums of money and therefore, fraud allegations are common.
- Adult- The chargeback rates of pornographic websites are high. Large processors try to avoid being associated with this industry.
- Pharmacy- The providers of offshore merchant accounts consider internet pharmacy in foreign countries a high-risk business.
- Gambling- The risk factor in the gambling industry is considered to be the highest of all, owing to the legal issues faced by this industry.
Prices for offshore merchant accounts and reserves
A normal offshore merchant pays 6% or 4% for processing transactions and the rolling reserve that the merchant has for 60 days is 20%. From high-risk merchant accounts, the expected rate of payment is somewhere between 5% and 10%. Also, the rolling reserve is higher for them. For a startup offshore merchant account, negotiating these reserves and fees may not be possible. But, if the transaction volume brought by you is large and if your account is clean for a year, you can surely negotiate with providers for paying less.