It is true that some offshore merchant account providers cater specific high-risk industry but it’s not the case with all other offshore merchant account providers. Let us first understand what an offshore merchant account is.
It is like any other account but is with a bank outside merchant’s home country. This type of account enables a merchant to accept payment online by accepting credit card. It is not restricted to any industry type, but is available for merchants across all the industrial categorization and can get this account opened to reap its benefits. This type of account is more beneficial for merchant’s expanded their business beyond geographical boundaries i.e. multinational merchants.
Multinational merchants mean that the merchant sells a product to domestic as well as international customer and deliver real-time credit card processing in a local currency of customer. For safe and secure credit card processing these merchants should work with local bank of other countries. To achieve these objectives, an offshore account is the best alternative.
Are offshore account high risk?
An offshore merchant account does not translate to high risk but depending upon the geographical location of business some merchants may refer to these accounts as offshore in a certain jurisdiction whereas others might consider it onshore. It is advisable to work with reliable international merchant account provider as it delivers security to every credit card processing and this will help merchant as well as provide various opportunities to grow business financially as well as geographically.
Generally, an offshore merchant account is high risk as it caters businesses at risk for fraud and bankruptcy. These businesses are:
Better refund frequency
High sales volume
High chargeback ratio
Poor credit history
Company registration address is available in an offshore environment.
Most of the businesses need to take a risk without affecting their financial credibility in order to increase sales or for growth, this kind of flexibility provided to the merchant by High risk offshore merchant accounts. Domestic financial institutes find it risky to deal with such situation. Hence, they avoid giving approval for a merchant account to high-risk businesses.