Without being able to accept payments efficiently, you lose a large amount of business.  Did you know that consumers will spend an average of 20% more when not having to pay with cash?  By offering the option to accept credit card payments, you open your customers up to more impulse purchases – which is good for you.

Some of the reasons you may want to choose an offshore merchant account provider as opposed to a US bank include owning a high-risk business, poor credit, or needing to process global payments.  Finding the right provider can help you grow your business.

Offshore merchant account providers are more lenient with the credit approval process.  As the US banks experience problems with clients with poor credit, it is getting more difficult than ever to get approved, and if you are, often the merchant account fees are ridiculous.

Many domestic providers have stringent requirements for providing credit card processing services.  If your business falls into one of the high-risk categories – adult products, phone orders, or marketing products, to name a few, you may have already discovered the difficulty in getting a domestic account.   Often high risk businesses are required to pay a high “deposit” and may have funds withheld in case of charge-backs. Offshore providers will often take more high-risk clients because the competition is not as steep.  Expect to pay premium prices, but the return for your business will be worth it.

Offshore providers are more flexible when your sales increase.  Many domestic providers will close accounts for “suspicious activity” if sales increase exponentially over a short period of time.  This is due to the American paranoia of money laundering.

When marketing on the internet, your product becomes internationally available.  Having an offshore merchant account provider will make it possible for you to accept payments from global sources.  Being able to expand your market to an international audience means there is no limits to your growth potential.

Having an offshore merchant account will also put you in a favorable position tax wise, since you will be in a “virtual jurisdiction”.  Research this fully before making your decision.

When looking for the right offshore merchant provider, keep in mind that many people unfortunately try to scam people through this outlet.  Make sure that you are getting a reputable provider with an established history and a person you can talk to.  Once you have found the right one, it’s time to get started.

By spending a little time doing the legwork, you can make sure that your business will be able to operate fully on the web to an international clientele by finding an offshore merchant account.  Who knows how far your business can go?

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SET UP FEE

This is the initial fee that the company will charge you to activate an account.  This generally starts at about $200, but can quickly inflate depending on the type of plan you are choosing.  Important questions to consider in the set up fee are first of all, is it a one time fee, or a recurring annual fee?  This will make a big impact twelve months from now when it is time to renew.

Associated fees with the set up may be an application fee (to process the application), an annual membership, and possibly a gateway access fee.  Find out if your provider can save you this fee if you combine services with them.

TRANSACTION FEE

When processing a card, the merchant account providers use a computer system to complete the sale.  Whether your customer is using a debit or credit card, expect to be charged a transaction fee.  This may be a percentage of the sale, or a flat fee.  The flat fees are generally between twenty to fifty cents each transaction.  Determine your average sale to find out the least expensive transaction sale charges.  If your sales are going to be well over $100 each, it may be less expensive to pay a flat fee.

DISCOUNT RATES

This rate is the portion of the sale charged for processing.  This is generally around 2+ % for online transactions, for a total of about 3% of the sale going towards fees from sales.  While this may seem frustrating to factor all these fees into your sales, think about how much higher sales will be!  Selling online makes accepting credit card payments essential.

SETTLEMENT FEE

This fee is between ten to fifteen dollars a month.  The merchant account provider will provide a statement of all transactions, listing the money earned from credit card transactions.  This will include sales and charge-backs.  Charge-backs are directly related to merchant account risk.  Consider the electronic/paperless version to potentially waive this fee.

MINIMUM MONTHLY FEE

The credit card company wants to know that you are going to be sure they are earning money every month, so there may be a stipulation that you must have a minimum number of charge transactions every month.  If you don’t meet the minimum number, there will be a fee assessed as well.  Check ahead of time and find out how much you will be paying if you have decreased sales one month.

Merchant account fees are not something that should overwhelm you as the seller.  Having a clear understanding of your merchant account provider’s policies will help you anticipate expenses each month.

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While the old-fashioned manual credit card terminal is an option, using a merchant account provider is a much more efficient way to let you focus on your business.  A merchant account provider is a credit card processing company that links to your business site.  By having a provider, your customers can purchase products with their credit cards through a secure site.

Much like a business account will help you track income and expenses, a merchant account provider will track all of your credit card sales, send a statement, and transfer the funds.  There will be fees associated with this service, but it is well worth it to have a cashier around the clock.

If your business already has a store front and your use merchant account providers for your in-store credit transaction, then see if they can offer you online services.

*** For more information on merchant account services providers, CLICK HERE

When selecting merchant account providers, keep in mind that since these are generally banks, they will have criteria for you to meet before you are extended services.  You may be asked to provide a detailed business plan, account and trading history, as well as a credit check.  Having an established history will make this process a lot quicker, but getting through this process will allow you to get started.

Once you have selected your merchant account provider, you will pay a sign up fee in order to cover the administration cost.  In addition, there will be a fixed monthly or quarterly fee, or a commission on each transaction.

Once your customer has run the credit card, then the merchant provider will transfer funds less the fees to your account if you have a per transaction fee.  These generally run between ten to thirty cents each transaction.

While all the fees may seem to add up, keep in mind that the convenience of these sales make it well worth the cost to make it.  By establishing an online presence in today’s shopping world, your sales may skyrocket more than you can imagine.  This all starts with choosing the right merchant account service provider.

***To learn more about choosing the right merchant account service provider, CLICK HERE!***

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