There are a variety of international merchant accounts available, but evaluating whether they are a good fit for your business and which account is the most suitable can prove to be a daunting task. In this article, we will outline some of the main features of a good offshore merchant account, and de-mystify some of the key terms.
Each business is unique
While most businesses will need to have domestic bank accounts in their own country, those that trade with customers in different locations around the world will also need flexibility to make and receive payments in a variety of currencies. Similarly, businesses in some industries prefer to process payments offshore for a variety of reasons, especially those handling high volumes of payments on a regular basis, or whose business falls into a high risk category.
When are offshore merchant accounts a good option?
One of the most common reasons businesses use offshore accounts in addition to domestic payment handling is to reduce processing risks. By setting up offshore merchant accounts, businesses are able to balance payment loads, while managing and reconciling them through a single dashboard.
For firms operating in businesses generally classified as high risk by onshore banks, international merchant accounts also offer more flexibility and likelihood of acceptance. These categories include gambling, certain financial services, and certain health and wellness products.
The benefits of offshore merchant accounts
In addition to the obvious benefits for certain types of business, merchant accounts can also significantly reduce expenses, and ensure continuity of payment processing. A well-structured diversification of merchant accounts is also a straightforward way of reducing risks normally associated with payment processing.
Here’s five top reasons to consider an international or European merchant account for your business.
- High volume and high-risk merchants are much more likely to get accepted
- More flexibility on chargebacks – this is especially useful if your business is in an industry where this is a relatively common occurrence
- Greater transactional processing volumes help facilitate your business growth
- Facilitate payments in multiple currencies – this is especially useful for international ecommerce companies looking to attract customers from every country
- Reduce international forex fees and traditional bank charges
While these factors may sound simple, it is surprising how restricting domestic accounts can be for international or high risk businesses. From imposing limits on payment volumes that can be accepted, to excessive fees for making international payments, domestic accounts can quickly become unworkable and restricting for many businesses.
Give yourself the flexibility
Adding international merchant accounts to your banking architecture is a quick and simple method to give your business the additional processing power it needs.
Offshore accounts offer much higher limits on monthly processing volumes, meaning your business can focus on expansion instead of concerning itself with adhering to limits imposed by banks.
One of the most effective strategies for organizing your banking network is to combine domestic and offshore accounts. This kind of setup provides the best of both worlds, and through utilizing banks in key regions to align with your customer base, your business can benefit from reducing (or even eliminating) cross-border transaction fees, and reduce the risks and processing times normally associated with foreign currency transactions. Furthermore, this kind of arrangement gives you the competitive advantage of accessing lower intra-regional banking rates, and depending on the nature of your business and its stage of growth, these savings can either be passed on to your customers, or provide a boost for your bottom line.
Find out more
You can read more about our international and offshore merchant accounts, and apply online now via this link.