High risk offshore merchant accounts are known to be those that pose a high risk to the business they are trying to make successful. It makes it difficult for banks and other financial institutions to work with them due to their stringent requirements.
However, some big-stake merchandisers have managed to secure trader accounts.
And that too when they were considered risky by many financial institutions due to their minimal reporting requirements. Or because of other reasons such as multi-currency processing, etc.
So, undoubtedly, there must be pros that make such firms opt for these arrangements. What are those pros? Let’s discuss the fascinating five of them today. Here we begin-
What is a high-risk merchant account?
If you have a high-risk merchant account, your business has a higher stake in chargebacks. Chargebacks are when customers dispute transactions with their credit card companies and get their money back. The reason is there is no other way for the customer to tell if they got scammed. So, the bank will try and keep the money from them until they can prove otherwise.
Big-stake merchandisers include businesses that sell adult content, tobacco products, firearms, and services to people in certain countries (like Cuba) where there may be less stringent regulations on these types of businesses than elsewhere around the world.
These services typically have higher transaction fees, monthly account fees, and other restrictions based on what kind of product(s) or service(s) your business provides. It means there’s always something new coming down the pipeline.
How does a business get deemed as a high-risk business?
Some businesses get considered high-risk because they have a higher chance of fraud, chargebacks, and other problems. For example, online gambling and tobacco sales are two industries that often fall into this category.
If your business falls under this category, it may be time to look into having a merchant service with an offshore provider. There are many options there for you to choose from when searching for an offshore merchant service provider. Some of these include PayPal Merchant Services (which has been around since 1998), 2Checkout (founded in 1999), and eWay (founded in 1999).
The Alluring Pros of Having a High-Risk Merchant Account-
Isn’t getting to know the pros of such crucial things our favorite part? So, let’s understand five of them here-
- Better security-
When you open a high-risk offshore merchandiser account, it’s crucial to know that the bank is holding your money in an entirely safe place. It is different from most other trader accounts, which get held by banks in their home country. A high-risk offshore merchandiser service means their money will get kept at an offshore bank (we’re talking about as far away from home as possible). So they can secure your information safe from thieves and hackers.
High-risk merchandiser services can get held by banks in any country. But they’re generally safer if they get kept by an offshore bank. It means that your money will remain in an account at a financial institution outside the country of your business. Offshore banks are known for their security and privacy. So this is a promising way to protect yourself from potential hackers.
- Minimal reporting-
The most important thing to remember about high-risk merchant accounts is that they get set up by companies that specialize in offshore banking. It means that your merchant service provider gets located in a country that’s more friendly to high-risk businesses, which means less compliance and reporting requirements.
In addition, there are several other benefits associated with using an offshore merchant service provider:
- Less time spent on reporting means more time spent on growing your business.
- Everything is easier to get done because you don’t have any daily logins or passwords to remember (or write down).
- Your merchant account provider has more experience working with businesses like yours since they’ve been handling these categories of accounts for years now.
You can also expect better rates and fees and also more flexibility when it comes to pricing.
It means that you’ll have a much easier time keeping your costs low so that you’re not losing money on every transaction.
Offshore merchant accounts are also a great option if you’re looking to expand your business into multiple countries. They’re often more flexible regarding international payments and can help you set up the most suitable service for each country you’re doing business.
- Fast approval-
You can expect to get approval for a high-risk offshore merchant account within a few hours. It is particularly true if you’re using any specific program which allows the service provider to process applications faster than other providers.
Once your application gets approved, the service provider starts the funding process immediately and gets your funds deposited in your bank account within about 1-3 business days. Once all of this has happened, it’s time for the service provider to take care of some crucial details on their end: chargeback management and customer support. With chargeback management (fraud protection), they can keep track of charges made against your business. And at the same time, they also provide support so that any disputes can get resolved quickly and easily, no matter who makes them!
- Less difficult terms-
Such service providers hold less tricky terms. For example-
- No monthly minimums, annual fees, or set-up fees.
- It requires no PCI compliance fees and rolling reserve requirements (if you use a third-party processor).
- Chargebacks are less likely to be issued on your behalf, as well.
- You can cancel at any time without penalty or hidden fees.
- Multi-currency processing-
Multi-currency processing is a feature that allows you to accept payments in multiple currencies, convert currencies automatically and set up multi-currency pricing. Multi-currency processing is ideal for businesses that want to accept international payments from their customers but need more resources or expertise required for the job. It’s also an effective way of tracking revenue from different parts of the world by using different rates per currency.
Thankfully, with the assistance of these service providers and the account itself, you can make the best of this multi-currency processing feature. And that too very efficiently.
So, these are the five pros of high-risk merchant accounts. There may be other benefits also, but these are the most important ones for your business. This type of merchant account is suitable for companies that deal in high volumes of transactions and want to process them more quickly than usual merchant accounts do. So, if your firm falls under such a category, you should consult a service provider to avail of this service and get these benefits