How is monthly transaction volume calculated for an offshore high-risk merchant account?

If a firm with a higher risk of fraud or chargebacks — or specific other criteria — wishes to accept card payments, an offshore high-risk merchant account is necessary. Some processors, for example, improperly work with particular sectors, such as tobacco and rifle sales. Many processors are suspicious of companies selling globally, using subscription pricing, or not having much cash on hand.

What Does A High-Risk Merchant Account Entail?

A high-risk merchant account is a commercial payment processing account deemed high risk by banks. High-risk enterprises must pay more for merchant services because they are more prone to experience chargebacks.

The bank may set a rolling reserve on your account if a company has a high chargeback risk or a history of chargebacks and refunds. It is the sum of money set aside to cover the likelihood of chargebacks or fraud.

Advantages Of An Offshore Merchant Account

If you are an international merchant, having a local bank in the market where your customer base is can be advantageous. That allows you to accept payments directly without dealing with currency conversions, which reduces tax responsibility and the risk of fraud on clients’ credit cards.

International banks typically allow for higher processing volumes than their equivalents in the United States. That is because they have more consumers and can process a higher number of transactions for each customer’s card simultaneously.

Diversifying your merchant accounts might assist you in avoiding becoming excessively reliant on one country’s culture or ideas.

Offshore merchant accounts are perfect for merchants who are unable to establish a domestic merchant account due to the nature of their business.

Different countries regulate the banking industry differently, creating a favorable environment for banks and processors to operate high-risk enterprises. As a result, high-risk enterprises now have more incredible options to secure international finance.

It is crucial to remember that one can use offshore merchant accounts for different purposes. Adult entertainment and casinos, for example, are likely to be the outstanding prospects for this type of account.

Why Are High-Risk Merchant Services Distinct From Traditional Merchant Accounts?

Naturally, having your company designated as “high-risk” is infuriating. While particular business categories (adult entertainment, gambling, bankruptcy legal firms, and more.) almost invariably receive the label, having low personal credit or a high average ticket sales can also do it.

Don’t be alarmed if a processor rejects your processing application because they consider you a high-risk merchant. Even if the majority doesn’t approve of the industry’s top brands, you can still locate a processor who will deal with you. However, you will be charged higher processing and account fees, and you will nearly always be tied into a long-term contract with an early termination fee. In some situations, you may also require to maintain a rolling reserve.

How Is The Monthly Transaction Volume For Offshore High-Risk Merchant Accounts Calculated?

Naturally, we thought about rates and costs. However, unlike the finest low-risk merchant account providers, high-risk merchant account companies do not publish pricing. That is because these companies work with a diversity of underwriting banks and will assist you in filling out an application to shop around for the cheapest rates. As a result, rates will differ depending on the nature of the firm.

People examined each company’s overall pricing structures and charge transparency. For example, We investigated typical contract length, cancellation fees, rolling reserve policies, and whether qualifying merchants are interchange-plus rates.

In addition to fair and transparent pricing, high-risk merchants require specialized customer service as well as chargeback prevention and protection solutions to watch for fraud or any other activity that could compromise the merchant account.

While many processors claim to specialize in high-risk merchant services, some of those organizations are genuinely quite selective in their approval procedure, will immediately reject applications on the Match list, or deny businesses in specific industries. We emphasized processors who work to place merchants regardless of their background or business type.

Finally, we looked at common payment characteristics such as the types of payments supported by each processor, deposit timeframes, customer service hours, and user ratings.

Minimum Transaction Volume To Open A High-Risk Merchant Account

Merchants use high-risk offshore merchant accounts as the last choice for taking credit cards. Unlike a low-risk processor, an offshore processor understands that some chargebacks are unavoidable, but excessive chargebacks are not accepted.

An offshore underwriter, like a local underwriter, must ensure that their bank will generate enough money on the account to support it; however, their cost structures may be drastically different.

That is, a local processor will gladly write a business even if it just pays $20 per month. In contrast, an offshore processor may frequently impose high monthly minimums or processing volume floors on an account to guarantee that there is enough profit to make the integration profitable and compensate them for the risk and account management that they must perform.

Because an offshore merchant account needs some setup and integration and bank approval for most industries, most offshore merchant account providers demand merchants to process a certain amount each month to keep the account open, which is known as a monthly minimum.

Conclusion

Choosing a credit card processor as a high-risk firm is difficult because there are limited possibilities for high-risk merchant services. It is vital to select a simple supplier to work with and who charges affordable costs.

For example, if you are a high-risk online merchant in Asia, you must look for the top high-risk payment processors for an offshore account in the United States. Credit card processing, chargeback disputes, MOTO processing, internet payment gateways, and merchant cash advances are all handled by reputable processors. They increase sales by guiding you on how to manage chargeback transactions best.

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