An offshore payment processing service or an offshore merchant account delivers a cost-efficient and reliable solution for online payment processing of businesses.
It holds the key to reaching new markets and allowing your business to expand so you can enjoy a larger growth in your business and bigger profits.
What is a Merchant Account Payment Gateway Exactly?
A merchant account is another kind of bank account. It allows your business to accept and process credit or debit card transactions in real-time with the help of an online payment gateway.
In simpler terms, think of it as an online case register or a virtual credit card terminal for your business’ website and works the same as the one you find the traditional stores.
This payment gateway can be incorporated into almost every virtual shopping basket and website. And with the help of a virtual shopping cart, customers can choose anything they wish to purchase. After shopping, they can continue to check out and will show the total sum (including shipping and tax) and gathers the shipping and billing details from the customer.
From here on in, there are 3 steps on how a payment gateway performs whenever a customer makes a purchase.
The payment gateway will acquire the transaction made via credit or debit card. Your payment gateway will have to confirm whether the card can be acknowledged or not. Then, it creates a secure connection between your credit card processor, your customer and your company.
Thanks to this procedure, transactions are processed efficiently and quickly. On average, the time it takes to complete this process lasts only a couple of seconds.
Settling happens at the end of the day. Your online payment gateway combines all transactions and forwards these data to your bank in a single group. The goal here is so you can get your funds.
Every transaction in a payment gateway is recorded. This is a helpful process, allowing you to track and even download all business transactions.
Why Offshore Merchant Accounts?
Acquiring an ordinary merchant account can already be complicated. Now, finding a good offshore or international merchant account can be a real nightmare.
But they also offer amazing benefits for your business. By processing payments internationally, offshore merchant accounts have become one of the best opportunities for business to expand. Here are some of the advantages of acquiring an offshore merchant account.
- Lenient Offshore Bank Offer
Not all companies that choose an offshore merchant account service are labeled high-risk. However, more businesses that fall under the high-risk category look at international banks for a reliable payment processing service for one good reason— international banks are sometimes more liberal than the domestic banks.
This means that more international banks are willing to accept industries from gaming and online gambling, adult entertainment and contents, online dating and so much more.
- Possible Tax Benefits
Investing in countries such as Gibraltar, Ireland or Malta are great alternatives for processing payment internationally. All 3 countries are reasonably low-tax nations but highly reputable and reliable.
- Access To New Markets
With an offshore payment processing service, an online merchant from the US, for instance, can open his doors to the whole world. You can sell your products and services from anywhere in the world and your payment gateway can support multiple currencies. This ensures that your business is not only limited to the country you reside in but to a whole new market worldwide.
- High Volume
International or offshore banks are also liberal with businesses in terms of volume limits. Offshore banks typically do not put any limit on the number of transactions that you can process a month. This allows your business to optimize gains and reach its full potential.
Thus, merchants with pharmaceutical, nutraceutical or multilevel marketing businesses don’t have to worry about capped transaction volumes.
- Easy registrations
Through a partner like iPayTotal, you can have easy company registrations in countries such as Europe in order to assist businesses in expanding and growing their marketplace.
Registering a business from another country can be quite difficult, however, iPayTotal can provide all necessities including the necessary staff, suitable office locations, bank accounts, and shareholders.
The Problems With Offshore Merchant Accounts
You should know that although an offshore merchant account offers you great benefits, internationally accepting credit or debit card payment transactions can also present some serious risks to your business as well.
- Limited Legal Solutions
The ability to pursue a legal solution against a foreign processor or bank can be severely limited or sometimes even nonexistent. Therefore, you need to consider registering your business legally in the country where your merchant account will be located.
However, even with the legal standing in the country, you need to be aware that it can be extremely expensive and inconvenient to pursue legal action outside your own country.
- Fraud and Identity Theft
Not only that, but there is also an increased risk that you can become a victim of identity theft or fraud. Foreign banks collect the same personal data about your business and you as the owner, but they do not always make a good effort in protecting it.
Thus, you will want to keep particularly keen on your business account, merchant account or any personal accounts about which you have released information in order to get approved for an international merchant account.
- Higher Fees
A high-risk merchant account is also notorious for having higher account fees and processing fees. And an offshore merchant account can be even worse. International merchant account providers know that you are particularly desperate. And some will take advantage of you and your situation by charging you as much as they can get away with.
To avoid such situations, you need to shop around and compare multiple pricing and quotes from banks and providers when looking for an offshore merchant account. Never accept the very first order from a processor or banks just because they are the first ones that as not rejected your merchant account application because of the status of your business.
Take note that most providers offering offshore or international merchant account usually fail or downplay to mention these risk factors. Thus, it is up to you to look out for your own. Make sure that you do your own thorough research, compare multiple pricing offers and review all contract documents before signing up for an account.
Why Do You Need To Choose The Right Payment Processor For an Offshore Merchant Account
The main reason why you need to start off with the right offshore merchant account provider is to avoid the chances of your payment gateway and account being terminated.
Banks can close an offshore merchant account and hold funds without notices. This means that you will have no way of selling your services and products to your clients and stop your business cash flow completely. Not only that, all funds that you earned from your services and products could be withheld by the acquiring banks for months.
However, when you partner with the right offshore merchant account provider, you also increase the chances of prolonging the lifespan of your merchant account.
Understand that the bank’s due-perseverance or underwriting doesn’t end after your account has been opened. And that there’s a continuous risk monitoring related to all international merchant accounts.
Things To Consider When Choosing The Best Offshore Merchant Account
Although most international merchant account providers specialize in working with high-risk merchants, not all high-risk merchant account providers offer international merchant accounts to domestic merchants or work with international merchants.
So before you apply for an international merchant account, you will need to confirm that the provider you are considering works with businesses that are located in your own country. This info should be seen explicitly on the website of the merchant account provider or you can talk with their sales staff in order to confirm.
An international merchant account provider that specializes in setting up an international payment processing service can usually set up your merchant account in almost every country in the world, however, there are some exceptions.
For instance, for US-based merchants, do not expect to set up an international merchant account in countries such as North Korean and Afghanistan. It is simply not going to happen. However, with the exception of nations limited by a high level of instability or political consideration, the possibilities are wide open.
In general, you need to set up an account in the country where you assume to do a significant amount of business. If your business is going to operate exclusively in the US, on the other hand, an offshore account can serve as a last resort for obtaining a merchant account if you simply can’t get approval for a domestic high-risk merchant account
As mentioned before, banking rules and regulations are more relaxed in particular countries and some banks and processors are more willing to work even with businesses that fall under the high-risk category.
Offshore Merchant Accounts: Special Features To Look For
You will want an offshore merchant account that has the same features and services as a traditional merchant account.
This should include a robust payment gateway for online merchants and processing hardware like POS systems and credit or debit card terminals for the retail merchants
You also need an online account dashboard that allows you to monitor your transactions and sales in real-time. Depending on your business’ needs, a tablet- or smartphone-based mobile processing system should also be important.
Almost all providers provide some kind of mobile processing system either through a partnership with 3rd party providers or as a proprietary product.
In addition to these basic account features, there are multiple special features that an offshore merchant account may or may not include. How crucial these features are to your business depends on how you intend to use the account.
- Currency Conversion Services
Having an international account will require you to convert the money into your own local currency. Most international account providers offer a built-in currency conversion service which allows you to convert international funds when it is time to transfer it to your business account.
Although these services may offer a lower conversion fee than a bank can charge you, you still need to look for the best deal available.
- Multi-Currency Support
If you are going to do business internationally, then it only makes sense that you will want your customers to pay in their local currency. And a multi-currency international merchant account allows you to maintain balanced in several currencies, saving you money in the conversion costs.
- Advanced Anti-Fraud Features
An international merchant account is involved in a higher risk of fraud that the traditional merchant accounts. Thus, you will need to have many extra services in order to avoid it as possible.
Most international merchant account providers provide a number of enhanced and advanced anti-fraud features as a general part of their merchant service. Such features detect any suspicious activity automatically and stopping fraudulent activities before it affects your business.
Get Started On Your Offshore Credit Card Processing With iPayTotal
iPayTotal is one of the leading providers of offshore payment processing for all high-risk and low-risk merchants. Our reliable international merchant accounts offer long-term who wished to accept and process credit or debit cards internationally.
Applying for an international merchant account with iPayTotal is a simple 3-step process:
- Fill in our online application form.
- Sign and submit your application digitally.
- Submit all supporting documentation electronically.
Once you have submitted your application, our expert underwriters will review your eligibility and verify the information you provided.
In order to increase your chances of approval, ensure that you keep your bill payments up to date, your account balances high and provide an accurate and honest answer on your application.
iPayTotal will provide a response in just 24 hours. Once approved, a secure payment gateway for your online business will be up and running in just 48 hours. You will have access to all features of international merchant accounts including fraud and chargeback prevention tools.