Key Advantages Of An Offshore Merchant Account
By Jennifer L Loganathan

An offshore merchant account can be your only choice if you re in the high volume high risk business, and a domestic provider is either not accepting you for merchant account services, or is asking for a huge security deposit or cash bond. However, with the advancements in both regulatory environments as well as technology with offshore merchant account destinations, it does not have to be looked at as a last resort, but rather a convenient and beneficial choice.

In most cases, a domestic merchant account will be the most convenient option, as the e-tailer will not have to spend too much time setting up offshore, and will be familiar with the laws of the land in which it operates. Going offshore means setting up a business entity in another land, involving both time and money, more so than in the case of a domestic provider. However, with the tremendous growth of the offshore segment, Setting up a merchant account offshore can be much simpler and convenient with the right merchant account provider. If your business is categorized as high risk or it lacks a track record or has a bad credit history, an offshore merchant account is ideal, as screening processes are much less stringent offshore. Although set up, maintenance and processing fees can be higher offshore, going outside domestic borders can open up a global network of banks and processors to choose from, enabling the e-tailer to choose from a wide variety of deals in terms of fees and charges, as well as security and technology. Hence, the e-tailer has a much high probability of finding the most compatible partner for its sales volume as well as nature of business.

Offshore merchant accounts can offer substantial benefits for an e-tailer including:

1. Taxation benefits: Being set up offshore in specific tax havens can substantially reduce tax liabilities. Many countries have tax treaties in place with other less developed nations that enable business to reduce not just total tax liability but also taxes on individual transactions, which can add a significant chunk to the retailer s bottom line.

2. No processing limits: Going offshore can be an excellent option for high risk high volume businesses, as they will not be limited by a ceiling on the volume of transactions, which may be imposed by a domestic bank, due to their relatively lower risk profile.

3. Multi-currency acceptance: Offshore merchant account providers can make it simpler to accept payments in multiple currencies as well as receiving remittances in multiple currencies. This can be beneficial for e-tailers who receive a significant amount of inward remittances in foreign currencies, and can use the offshore account to insulate the effect of currency fluctuations.

4. Excellent security: For many offshore destinations such as Bermuda, the merchant account and credit card processing are mainstays of the entire economy, and are hence investing heavily in providing dedicated special economic zones with infrastructure specially designed for this industry. Hence, the retailer can benefit from state of the art technology and security, which indeed is being used even by many domestically located banks to outsource their credit card processing needs.

5. 24/7 live: With an offshore merchant account, the provider can offer 24/7 services to remain online and function for any time zone, thereby providing greater access to a global market. In addition, the anytime available customer services can be critical to a successful sale when an order comes in that needs to be verified in real time. Believe it or not, the latest innovation in the industry seems to be zero fee merchant accounts, which are similar to some third party credit card processing options. With these accounts, there are no set up or maintenance fees the provider charges a percentage of each transaction instead. However, all offers apart, the offshore merchant account must be chosen with care, and set up through an established provider such as Stradafee. It may prove to be the best choice for any type of retail business.

Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is an electronic payments company as well as an eCommerce and Internet merchant account provider. Merchant accounts make it possible for businesses to provide online credit card processing For more information on credit card processing visit http://www.stradafee.com

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