We often receive quizzical looks and a series of questions when we advise a merchant to take their business to one of our offshore banking partners for credit card processing rather than one of our partners here in the U.S.
There is a sense of hesitation at first, maybe a loss of familiarity, and we understand why. And almost always, the questions follow:
Why won’t a U.S. bank take my business?
Is this going to cost me more?
What’s the difference between offshore banking and domestic banking?
Three Reasons Our Offshore Banking Partners Accept Businesses Domestic Banks Won’t
- More liberal: This fact is consistent with, for example, European culture. It is more liberal, more accepting of certain industries, lifestyles and viewpoints, much more so than the U.S. The same is true with high risk businesses. For example, online gambling and sports betting are enormous industries in Europe, but remain illegal by U.S. federal law (some states allow it).
- Processing Volume Minimums: International acquiring banks allow for generous volume caps, but will impose a minimum amount that a merchant must process each month. This leads well into reason No. 3.
- Offshore banking structured differently than domestic banking: While U.S. banks usually have daily payouts, offshore acquiring banks offer weekly payouts. Weekly payouts allow offshore banks more time to decide whether to hold a merchant’s funds if s/he is not meeting the minimum processing volume to which they agreed.
If the merchant is unable to do so, the bank will likely hold the merchant’s funds.
“Because we operate in the high risk space, we probably send about 60 percent of our merchants to offshore acquiring banks,” said Wendy Jacques, Sales Manager at Instabill. “There are a lot of factors we take into consideration when we decide to match a business with one of our offshore or domestic banking partners, such as the country in which the business is registered, whether or not the merchant has a social security number, and of course, chargeback and refund levels.”
Benefits of Offshore Banking
Other than acceptance and generous volume caps, processing payments with offshore banks has many other benefits such as processing payments in more currencies and possible tax breaks.
Because we have so many domestic, international and offshore banking partners worldwide, Instabill can get merchants the payment processing solutions they need for high risk and hard-to-place industries.
Get started with a conversation with a live merchant account manager at 1-800-318-2713 or by clicking the live chat button below.