Offshore Credit Card Processing Benefits

Most credit card processing companies classify online businesses as “high risk”, since the potential for credit card fraud is higher than in-person transactions.  Operating a business online requires you have the ability to accept credit card payments from your customers, and unfortunately, some US businesses find it difficult to get a traditional merchant account due to their personal credit histories or the nature of their business being “high risk”.

Using US-based Processors

With a business based in the United States, you’re governed by the laws of the US as far as credit card processing is concerned.  If you use offshore credit card processing, the laws and limitations are lifted, you’re not considered a high-risk company, and you could benefit from a number of other advantages over using domestic companies.  When you begin to consider offshore companies, you have a wider selection of banking and financial institutions from which to use to process credit cards from antiscians.

Benefits: Offshore Credit Card Processing

Some of the advantages gained from processing credit cards with companies located outside the United States include:

  • Ability to accept a larger range of credit cards, including foreign forms of credit: when you can accept foreign credit, you immediately give your company access to a world-wide, global market.  While people in the United States have the most material belongings, they only make up a fraction of the total world’s population – and limiting your business to only United States consumers means you are missing out on many other potential sales.
  • Fraud protection offered by the provider.  Just as there are different laws regarding how a transaction is handled, fraud management is vital to ensure your transactions are secure and your business is protected from fraudulent transactions and the chargebacks that may result from disputed transactions.  An international processor will have the experience and expertise to handle these unique situations that come with accepting payments from around the world.
  • Able to help you stay within the bounds of international privacy laws.  Each country that you do business with may have varying laws regulating how private information is handled.  If you are unfamiliar with these laws as a business owner, your credit card processor can ensure your transactions are handled correctly and that your business is protected.
  • No transaction minimums or maximums to maintain
  • Possible tax-reduced transactions
  • No large set up fees, application fees or deposits.  Most off-shore credit card processing accounts can be set up with minimal investment.
  • Accept credit cards in multiple currencies and convert them to your own currency. Offshore providers can accept payments in global currencies and have them converted to your own when depositing into your account.

If you have found it difficult to get a credit card processing account with a domestic company, you may look to offshore companies.  Before selecting an offshore provider, make sure to compare their features and benefits, and let them know you’re doing so.  Many times, offshore banks will compete for your business by trying to offer a better deal than the competition.

Considerations: Using Offshore Processing Companies

As with any decision, there are potential disadvantages or circumstances to consider carefully before making your choice.  If you decide to move your credit card processing business to an offshore provider, you’ll want to consider the following:

  • Offshore banks may not be FDIC insured: other countries may have different types of insurance protection for your money.  Make sure you do some research into how your funds are protected if the bank is robbed or goes bankrupt before choosing a provider.
  • Check customer privacy laws: make sure the laws governing the banking industry where you are considering an offshore credit card processing account requires that your customer’s financial data is kept private.

Photo via Katey Nicosia

Posted on Wednesday, September 29th, 2010