High risk offshore merchant accounts

High risk offshore merchant accounts

Merchant accounts are those accounts used by the people involved in doing business, be it an online store, online services and entertainment or any other business dealing with day to day transactions in form of cash, check or credit card billing.

The hullabaloo surrounding offshore merchant accounts is due to its flexibility wherein a person can sell his merchandise to someone on the other side of the planet without much fuss. The taxation rules and other international business transaction guidelines are levied in the merchant’s and the buyer’s respective countries.

But, as they say, “all good things in the world come with a price tag”, the offshore merchant account providers charge astronomical sums of money for the services they cater to. The providers lay in front of the merchant, a host of charges and fees like installation fees, transaction fees, charge back fees, discount rate, and minimum monthly fees and so on. The reason behind charging such high rates is due to the high risk involved in maintaining and restricting the merchant accounts within the boundaries of legal use.

In spite of the heavy price tag, the offshore merchant accounts remain one of the most sought after by the people dealing with adult entertainment, travel, pharmacy, online casinos/gaming merchants, telemarketing merchants, tobacco and cigarettes, replica products, online auctions & debt services, E-wallet & E-cash, ISP & hosting services, online dating services etc. This is because, the merchant account provider has to deal with innumerable businesses, running into large volumes of sales, and hence, the businesses happen to be risk prone due to incidents like charge back and other fraud threats.

Another reason for the demand to acquire high risk merchant accounts is because the high risk vendors are not allowed to have a standard merchant account by almost all of the merchant account providers.

There are number of offshore as well as international merchant account providers dealing in the high risk account sector and therefore it is advised to the vendor to do a complete study of the market and chose the right agency which suits the set criteria. The criteria for selecting a good high risk merchant account provider should include the following factors.

1. Provide multiple payment options and be prepared for any adversaries.

2. Provide unreachable protection and anti fraud schemes.

3.Reasonable setup and recurring fees. Protection measures.

4.Approval time and setup speed.

5.Well-organised international high risk merchant services.

Some of the general reasons for not providing the vendor with a high risk merchant account by the merchant account provider are the following:

1. If the business is unregistered as per the law.

2. If the vendor is declared fraudulent or bankrupt by the merchant account providers.

3. If the credit history of the merchant is disappointing.

4. If the merchant runs a business that has high scope of risk in it like gaming, downloadable soft wares etc.

5. If the merchant deals with large volumes of sales and many transactions, the probability of fraud in such situations increases and the merchant is tagged "high risk".

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DSS Boxes is author of this article on high risk merchant accounts. Find more information about offshore merchant accounts here.

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