Merchant Articles

Offshore Merchant Accounts- Offshore merchant accounts are becoming more popular as people try to find ways to save money. In this offshore merchant accounts review, Business Merchant Account will offer you some insight on offshore merchant accounts.

So just what are offshore merchant accounts? Offshore merchant accounts are merchant accounts where the merchant account is set up in a different country from where the business takes place at. Hypothetically, if Business Merchant Account was registered in the United States to do business, but we had an merchant account based out of Jamaica, that merchant account would be an offshore merchant account.

Who uses offshore merchant accounts? Offshore merchant accounts are used by both legit businesses and not so legit businesses. To start with, Business Merchant Account will discuss the not so legit businesses. These types of businesses can vary but all have one common theme…to hide their money in offshore banking accounts. By doing this these companies pay less tax. Beware though that this is very stupid and you will be prosecuted heavily upon being caught. The risk is not worth it. There are some legit businesses that have to use offshore merchant accounts. Those businesses include the following: adult entertainment, Internet drugstores, casinos, sportsbooks, electronic cash, imitation products, tobacco items, travel-based and bio-technology. Those types of businesses are very high risk and have a very hard time securing traditional merchant accounts. They face these challenges because of their high sales volume which in turns results in a high number of chargebacks, the associated risk in terms of fraud, and poor credit history. Offshore merchant account banks are more willing to provide a merchant account to these businesses because they themselves are willing to take a gamble to make some extra money.

What are the advantages of offshore merchant accounts? Three are a few advantages of offshore merchant accounts and Business Merchant Account has listed them:

• Tax break- Because you are running your merchant account out of foreign territories you have the chance of lowering your taxes. This will work out only if the country that you have your offshore merchant account in has lower taxes than your homeland.
• Expand clientele base- You are no longer stuck to doing business in one country. With the use of an offshore merchant account you can now sell your products all over the world!
• More banking opportunities- Because you are not restricted to one area, you can shop around and get the best banking deal that you can. The best offshore banking deals might not be in your homeland so running an offshore merchant account will allow you to use the best banks!
• Accept multiple currencies- With an offshore merchant account you are able to accept all types of currencies thus increasing your revenue and clientele base!

What are the disadvantages of offshore merchant accounts? There are definitely disadvantages to offshore merchant accounts. Those are:

• Higher merchant fees- When you have an offshore merchant account you can expect to have higher merchant fees. The higher merchant fees are tied to the next two disadvantages of offshore merchant accounts.
• High risk- That’s right, offshore merchant accounts serve some of the highest risk businesses there is. A lot of these businesses are not practicing legally so the merchant account providers are often held responsible. As a result the providers are often shut down without notice.
• Slow application process- No matter what any offshore merchant account provider says, the application process takes some time. All you have to think about is the fact that you are dealing with another person in another country that is probably far from you. Getting the necessary documents to them can take some time.

Business Merchant Account hopes this article on offshore merchant accounts helps you in the next time you are choosing a merchant account.

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