The ability to accept credit cards is an important factor for many businesses, but particularly those operating on the Internet. However, if a company operates in a high risk market then it’s often not possible for the company to find a standard credit card processor (including processors such as Paypal). In these cases, a possible solution if for the company to consider a “
”. Read on to find out more about how offshore merchant accounts work, as well as their pros and cons.
How Does Offshore Payment Processing Work
Let’s face it – banks tend to be conservative about the types of companies they want to work with. They like to work with companies that are minimal risk and so it’s often difficult to qualify for a merchant account with a standard processor. This is where offshore merchant accounts can be a better fit by allowing companies to get around the requirements of a more conservative processor. Opening a high risk merchant account is relatively straightforward with the proper documentation. Payments can be transferred to an offshore bank or a local bank depending upon the structure of your company.
What is Considered High Risk
There are certain businesses that are usually classified as high risk. Many banks avoid working with these types of businesses due to potential for charge backs or the potential for a negative association. A few examples of high risk businesses are: adult entertainment websites, online casinos, online pharmacies, and even the online sale of tobacco related products. An offshore merchant account can be a good fit for these types of businesses.
What to Consider
These are just a considerations that should be taken into account when searching for a high risk merchant processor:
- Are there any application fees?
- Is there a montly sales minimum?
- Do you need to provide any processing history?
- Is the processor in a jurisdiction that offers favorable tax advantages?
- Is the company a fly by night operation?
Final Note
If you have a high risk business, then an offshore merchant account could be an excellent solution to consider. Just be sure to look carefully at the options available and be sure about the processor, as well as the country they are located in. Also, if you haven’t set up your offshore company yet, then it’s the perfect time to make sure that your merchant account works with your offshore corporation for the best advantages. Remember, the most important factors are to make sure your ability to receive your customer’s payments is not jeopardized and that you save taxes if possible.
Don’t hesitate to contact us at Miami Offshore Services if you have any questions about how a high risk merchant account might work for you.
