Offshore Merchant Account
Tax liability is one of the major concerns of any business, whether that is brick and mortar or through the web. Some businesses look for ways to move their assets to an offshore location while others are creating a new way of doing business with the use of the World Wide Web, and thus they need a secure, simple, reliable way to accept credit card payments. Though must have heard of offshore accounts, many businesses are reluctant to give an offshore account some thought, usually because they are unaware of how easy it is and how helpful it can be.
Internet merchant accounts are not a new concept to most retail and industrial business owners. Simply put, merchant accounts allow for businesses to accept credit card payments without the use of third part processor, which has many advantages of its own. However, upon considering an offshore merchant account, most business owners and managers have little if any experience and are not fully aware of the differences and advantages.
If you have spent any time at all examining the online credit card charging business, you will know that it has quickly become very large and very competitive in the US. Part of the reason for this drastic increase has been the lowering of charges for credit card processing. What was once a 7% charge on average has become more like 3%. This is all great, but US (domestic) merchant accounts still need much improvement in order to truly accommodate the small business owner. Application requirements and deposit requirements still burden many business owners seeking a merchant account in the United States. Some banks that offer merchant services require things like a two year business history, monthly holds to cover credit card charges, and security deposits of $2K or more depending on the predicted average charge amount. What makes doing business even more difficult with domestic merchant accounts is the level of paranoia that banks and other financial institutions have about money laundering, identity theft, and fraud. Many businesses have experienced a hold or complete closure of their merchant account due to a spike in their sales that is suspected of fraud, and this is the worst time a small business can experience such a difficulty. For many of these businesses, and large transaction may mark the their leap to a new level of business, and having to settle banking issues with a new client is the last thing that will help satisfy the customer.
For this reason, it is not uncommon for businesses to look beyond domestic soil for a credit card processor that understands their needs and their problems. Due to the flourish of global communication with things like the internet and cell phones, it is now easier than ever to people to do business with people that are on separate continents. Business can now shop for the best merchant account services throughout the world and decide on an offshore account that has the rates and services they need. Unlike the United States, many offshore merchant account providers have far fewer security regulations that may result in the holding or locking down of funds. These atmospheres are usually far more helpful to small businesses that cannot afford to have half of their revenue tied up in a security investigation.
The one draw back to some offshore merchant account providers is the actual processing fees. Because the extremely intense merchant account competition has not reached every country, some countries may still require higher fees for processing transactions.
About the author:
Jennifer Loganathan is the President and CEO of Stradafee Limited an international merchant service provider. Stradafee is a retail and an electronic payments company specializing in global eCommerce and Internet merchant accounts. Merchant accounts make it possible for businesses to provide credit card processing for card present and card-not-present transactions. For more information on credit card processing visit http://www.stradafee.com
