Why High Risk Merchants should apply for an Offshore Merchant Account?
An offshore merchant account is a type of merchant account where the account holder is a non-resident of the country where the account is managed. Offshore merchant accounts allow businesses to accept multi-currency card payments online and are easy to set up at the same time being cost effective.
Before you sign up for an offshore merchant account, do a comprehensive research on the various offshore merchant account providers. Look into the legislation aspect of businesses in the jurisdiction of the provider so that you know your business will be protected if any legal problems arise.
Some banks refuse to have anything to do with offshore providers so it is a good practice to let them know beforehand of your plans to open an offshore merchant account. It’s also a good idea to open a separate bank account for your offshore merchant account provider to deposit your cleared funds into. You should also set withdrawal limits on this account and monitor it closely.
There are various reasons why an offshore merchant account might be an attractive option for your business. Here are some of them:
- Running a business with high probability of chargebacks or a risky business model might curtail the chances of you getting approved for a merchant account. For high risk merchant account solutions, an offshore account offers greater possibility of getting approved by the merchant processors.
- Having a poor credit history, merchant service providers in your locality may not be much forthcoming in offering you a high risk merchant account. Most merchant account providers have stringent rules when it comes to processing and approving applications for merchant accounts. Most businesses with a poor credit history or financial records will get turned down by domestic providers.
- Different countries have different taxation system. Many large online businesses sign up for offshore merchant accounts in countries where they can pay low or even no taxes.
