An “offshore” merchant account may seem like something out of a James Bond movie, but it is a much more realistic notion in reality. You can check out high-risk merchant account reviews to gain a deeper understanding.
What is an offshore High-Risk Merchant Account?
An offshore account for your business is a payment processing service located outside the United States’ jurisdiction.
An “offshore” merchant account may seem like something farfetched. However, it has many practical benefits. Many payment providers offer such solutions. Most businesses prefer these types of solutions over the traditional options. The best part is that the entire process is straightforward. You will not face any difficulty in setting up your accounts. Your business can be up and running in a matter of weeks. This mechanism may even be more efficient to set up when compared to the traditional solutions.
Offshore high-risk merchant account providers may assist your company in various ways, regardless of your history in the business. Take a look at the seven reasons why you may want to open one:
You are a “high-risk” company
One example of a high-risk industry is online casinos.
If you are a high-risk merchant, one of the main reasons you may require an offshore account is that you are a high-risk merchant. In other words, you are a small firm or a startup, or you constitute a risk to banks in some other way (i.e., poor business credit, excessive chargebacks, etc.).
The following are some of the high-risk industries:
- Online gambling and sports betting
- Ticketing Services & Travel Agencies
- Cannabidiol, the non-psychoactive cousin of Cannabis and related products
- Supplements containing nutraceuticals and nootropics
- Tech Support for Guns, Firearms, and Ammunition (for any business)
- Loan merchants & online lending
- Debt Collectors | Collection Agencies
- Adult Oriented Entertainment (Porn, Escort Services, etc.)
- Many others (including other industries on the fringes of legality or get regularly abused by customers or politicians).
If your company is high-risk, you probably have problems finding banks willing to accept consumer transactions.
Being supported by at least one respected bank is critical for long-term success, and there are many of them to choose from outside of the United States — areas with possibly more lenient acceptance rules. This characteristic alone makes offshore high-risk merchant account providers valuable for many firms.
1. Safeguard your assets and business
Offshore assets are generally more secure than onshore ones, even if they are not always under padlock.
Another reason you may want to create an offshore merchant account is to safeguard your finances. It isn’t ideal, but some customers are interested in making fast money, regardless of who pays. Both attorneys and lawsuits per capita are in the top five globally in the US, implying that owning a company has some inherent risks.
Consider being served with a lawsuit: even if the ensuing court fight goes in your favor, dealing with it costs time and money. Smaller businesses can not afford to waste their limited resources on legal issues.
Creating an offshore merchant account makes it far more difficult for others to sue you, lowering your risk of spurious claims. If a dispute ends in court, having a diversified portfolio of merchant accounts, including one with an offshore bank, enables you to pay legal expenses while keeping your company going.
2. Diversification
What is the total number of bank accounts you have?
Diversifying your assets is a beneficial business option, regardless of whatever sector you operate within. As previously said, the United States is notorious for its many invalid and frivolous cases. If you are the target of one, your money may deplete for months, if not years.
Furthermore, as a merchant, there is always the possibility of running into financial issues. While you deal with your other banking issues, an offshore merchant account can keep the lights on. They might freeze your processing capabilities, whether numerous chargebacks or other matters cause them.
3. You want a banking solution not based in the United States.
Switzerland is fantastic for banking but does not overlook the rest of the EU.
Although many individuals assume the American financial sector can do no wrong, as the 2007-2009 crisis proved, this is certainly not the case. Having access to abroad accounts may assist in safeguarding your firm and its assets in the case of a downturn in the American economy.
Not to add that many of the world’s safest banks are present outside of the United States. Opening an offshore merchant account adds to your peace of mind by ensuring that your assets are protected from domestic volatility and handled by world-class organizations.
4. Gaining access to new and developing markets
An e-commerce merchant in the United States, for example, may open its doors to the rest of the globe with an offshore merchant account. A report stated that 1/3 of e-commerce firms in the United States want to register their businesses in Europe.
5. Quick company registrations
These solutions can help e-commerce enterprises grow their marketplace by providing easy company registrations in Europe via a partner. It might be tough to register a company in another nation. These companies can supply everything you need, including an appropriate office site, qualified personnel, a European bank account, and shareholders. You will not have to undertake any physical responsibility.
6. Offshore banks provide tax relief and leniency.
Not all firms that select offshore payment processing are high-risk. Still, many, many high-risk enterprises do so for a good reason: offshore banks are significantly more liberal than domestic banks, accepting sectors like adult content, online gambling and gaming, dating, and many more. The disadvantage is that offshore merchant accounts are often more costly than domestic merchant accounts (contingent on the bank with which a merchant has a partnership). Investing in nations like Ireland, Gibraltar, and Malta is a great way to handle payments overseas. All three are low-tax nations with a good reputation.
High volume solutions– Like the previous point, international and offshore banks are more lenient with business volume constraints. Due to the large volume caps, merchants in the nutraceutical, pharmaceutical, and multilevel marketing industries often seek offshore or foreign payment processing solutions.
Conclusion
There are several reasons you would want to create an offshore merchant account. There are several more advantages to establishing one. Such as safeguarding your firm in the case of a lawsuit and being able to release cash to staff during stormy legal or financial times, in addition to the more apparent instances (being high-risk/diversifying your account portfolio). While many company owners seem to be wary of creating an offshore account, it may be the best business choice you make.
