Reasons High Risk Merchants Chose Offshore Credit Card Processing
High risk merchants establish offshore merchant accounts for five primary reasons: industry type; processing volumes; tax considerations; diversification; and targeted markets.
Certain high risk merchants cannot qualify for US merchant accounts due to the products or services being sold. For instance Forex trading platforms, online gambling / sportbooks; adult entertainment; and nutraceuticals often use offshore merchant accounts. High risk merchants in many industries discover offshore merchant accounts have more liberal underwriting along with friendlier jurisdictions than the US.
International banks allow higher processing volumes than do US banks. Once approved, offshore merchant accounts ensure high volume processing capacity. There are rarely caps on volumes, which is particularly useful for fast growing, high risk merchants.
Some companies establish merchant accounts offshore for tax purposes or to access business incentives offered in certain countries. Others establish offshore credit card processing to take advantage of different regulatory environments. Check with your business advisors to determine if offshore payment gateways are recommended for your company.
Diversification of acquiring banks is another reason businesses process payments offshore. For example, different parts of the world have political or cultural standards, which are more accepting of certain products or services than others. Diversification of merchant accounts offshore mitigates processing risk while protecting business operations.
Targeted markets are another reason for credit card processing offshore. Card acceptance rates are much higher for cards when processing through an acquiring bank located in the regions where the buyer is located.