Offshore Account

An offshore account (offshore merchant account) is defined as a type of merchant account that is held in a different country.
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Offshore Account

An offshore account is a type of merchant account that is held in another country. 

Offshore payment processing services may be needed for a number of reasons, including: 

  • A business may be extremely high risk, making it impossible to secure merchant services in their own country. 
  • The business may have offices in more than one country and they need separate merchant accounts for each one. 
  • A business may need to accept payments in another country’s currency. 

Advantages of Offshore Merchant Accounts

Offshore merchant accounts offer several benefits for businesses that need them, including: 

  • Receiving certain tax benefits. 
  • Accepting payments in customers’ currency.
  • The possibility of higher payment processing volumes. 
  • Helping with load balancing and protecting the business’ ability to process payments. 
  • More relaxed banking regulations. 

There are some businesses in the United States that may not be able to get merchant accounts because of the nature of their products. Cannabis dispensaries are a perfect example. 

These businesses are not able to process credit and debit card payments in the United States because of Federal laws. However, some may be able to with the right offshore merchant account. 

Disadvantages of Offshore Accounts

There are also some disadvantages that you should be aware of if you are considering an offshore account. 

  • If something goes wrong, you may not be able to pursue legal action if you’re working with an offshore merchant account provider. 
  • Foreign financial institutions have access to all of the same information that is available to these entities in the United States. But they are not always as careful about fraud. 
  • Offshore accounts typically charge high fees for their services simply because they can. 

Tips for Offshore Accounts

If you believe that you need an offshore account to process payments, here are a few tips to keep in mind as you apply. 

  • Shop around. Not all offshore merchant account providers charge excessive fees for their services. 
  • Look for the best anti-fraud protection you can find. 
  • You may want to register your business in the country you plan to have your merchant account in. 
  • Look over your contract carefully and ask questions before you sign it. 
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