A common misconception in payment processing is that an offshore merchant account for credit card processing is necessary if your high risk industry touches upon any or all of the following issues:
- Legal (such as medical marijuana)
- Reputational (payday lending or adult content)
- Health (e-cigarettes or tobacco)
Hence, when we receive merchant account inquiries that may have any of the aforementioned issues, we do our collective best to adhere to their needs and preferences. Most often we can furnish the merchant with a domestic merchant account – which is often surprising to some merchants. There are times, however, when an offshore merchant account is the only feasible option for their industry.
Accepting foreign transactions
Understandably, most e-commerce merchants want their doors open to the world, 24 hours a day, seven days a week. It’s not as easy as it sounds, especially for merchants seeking a domestic merchant account.
If a U.S. merchant wanted to obtain a merchant account from a U.S. bank, but wanted to attract consumers from Europe, the merchant could only accept a certain small percentage of transactions from Europe agreeable by the acquiring bank. If the merchant’s European transactions were expected to be any higher, s/he would likely have to get an offshore merchant account for credit card processing.
“Whenever there are foreign transactions, a merchant has to be approved to accept them,” said Wendy Jacques, Sales Manager at Instabill. “Not all banks are set up to accept foreign currencies.”
100% U.S. Citizen Ownership
Let’s consider a scenario:
Three college buddies – two from the U.S. and one from the U.K. – develop a startup business in which they’re selling t-shirts online out of their dormitory. The two U.S. students, born and raised in the states, have social security numbers. The U.K. student is attending college in the U.S. on a student visa and has an EIN number. Since they’re selling mainly to U.S. consumers, they prefer a domestic merchant account.
Since all three are designated owners, and only two have social security numbers, they must obtain an offshore merchant account for credit card processing.
“We see this all the time,” said Ms. Jacques. “This is the No. 1 reason why we take a business offshore. If you’re not a U.S. citizen with a social security number, you won’t get a U.S. merchant account.”
Nearing (and exceeding) volume caps
Here is where an offshore merchant account for credit card processing can save a business.
You’re a U.S. merchant consistently nearing your monthly volume limits set by your domestic acquiring bank – a limit that you simply cannot exceed. You attempt to approach your acquiring bank about extending your cap limit or about opening a second merchant account, but are denied. You need a solution quickly, before your business surpasses its volume cap. What are your options?
When we receive inquiries from high volume merchants, we almost always suggest an offshore merchant account, most which offer generous volume caps (often none).
“A U.S. merchant account will always give a maximum volume allowance,” Ms. Jacques noted. “If you go exceed that allowance, the bank can hold anything over the volume limit until the end of the merchant account contract.”
An offshore merchant account for credit card processing: we likely have your solution
We’ve long said that acquiring banks are like fingerprints – each have unique standards and ‘personalities,’ so to speak. Each might offer payment processing solutions for this industry, but not for similar industries, with no explanation.
Since 2001, Instabill’s forte is providing high risk merchants an offshore merchant account for credit card processing, thus we know which acquiring banks are the best for which merchants and industries. Speak with one of our merchant account experts by calling 1-800-530-2444 direct today.
Chances are we have a solution for you.