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An offshore merchant account ends the days of sulking in misery over denied merchant account applications.

Getting turned down in every application is always kinda hard to take in, especially if you worked really hard for that endeavor. As just in the case of high risk businesses, such as adult, dating service, escort, escort service, telemarketing, travel, high volume, and multilevel marketing, reading the mark , “denied” on the merchant account application is totally unfortunate.

Let’s incorporate the Kübler-Ross model of the five stages of grief to the agony merchants face when their applications are rejected:

Denial – It can’t be happening

After all you’ve been through, making sure that the all the requirements were submitted, together with the original and photocopies, coming in wearing your best suit and even a new haircut, just to impress the financial officer, waiting for like six weeks to get a mere yes or no, you get a denied application. You ask, “this can’t be, I did everything right?”.

Yes you did, it was just not in the right place.

Anger – Why ME? It’s not fair?!

At this stage, you ask yourself, why you were singled out? At this stage, you pin the blame on someone, even on God, business partner, the bank, the bank officer, and yourself. It’ll be relieving to know if you can know the reasons:

documentary deficiencies
grave complaint record filed to the Better Business Bureau (BBB)
ripoff record
misrepresenting certain, if not, all information about yourself and your business

Bargaining – Just let me try it out even for a month or so..

This is a natural emotion, after a rejection, you tend to fight more even though you’re hurting inside. You offer your business or your house or any other property s collateral, all in exchange of another chance.

In most cases, you can’t offer any collateral or insurances if you have been denied. This only happens when it’s a done deal.

Depression – I’m so sad, why bother with anything?

At this point, after exhausting all efforts to reconcile, you tend to love solitude and avoid seeing or talking to other people. Even to the point that you have lost the will to run your business.

Your business is one of the good things you have, why fail in it as well.

Acceptance – It’s going to be OK.

This is the moment where you will have an epiphany that rejections are but a part of life. You have entertained all the feelings that you should, all are natural to experience. You have come to terms that being turned down is not the end, it’s only the beginning.

Blessing in disguise

You have overcome the stages of grief. Time to heal those wounds. Be courageous to go outside the state line, so to speak, have your business stamped with an offshore merchant account.

Applying for an offshore merchant account for your business is easier and faster. They are especially accommodating to business with a high risk nature. But, remember that even if they are less strict, you have to be secure in your application. Make sure that all the requirements are intact, settle any disputes with your costumers and other affiliates. Start clean and fresh with your offshore merchant account.

Get the experience from not just a seller of a high risk offshore merchant account – but a merchant who has been thru all the hoops and has seen everything from “both sides”.

The risks of offshore high risk merchant accounts

Most sellers of such high risk merchant account are delivering low-grade products – or simply take your money and run away (this has happened to me several times in the past). These sellers have never processed 1 single cent themselves from credit cards – and therefore do not know (or care) about the requirements of a merchant. They only know how to sell a useless “solution” that will go down after 1-2 months of use.

These days the scam artist make your account run for 2 months and then suddenly it gets closed – and then you never see the funds from the last 3-5 weeks processing – plus the standard 10% reserve that you normally should get back after 6 months.

A new variation of this scam is that the high volume high risk merchant account processor has very poor reporting system making it difficult or impossible for you to see when and how much you will get paid for which period.

For example a gateway processor that claims to be located in Switzerland (they have no telephone that actually works) and be operated by a Swiss person shows only 7 transactions per page – and has no reporting system whatsoever. This processor claimed that their discount rate was 8% and reserve was 10% – but actually, they kept 53% of all processed amount – and after7-8 weeks the account suddenly closed. This so-called Swiss gate also put a chargeback belonging to a completely different merchant on my account and never removed it even though they promised to do so. Another chargeback I was able to prove that the product was delivered but the chargeback still remained.

Another example was a so-called Chinese gateway processor using a gateway went down (lost their bank connection) also after 6 weeks of processing with them – and never told anything to me – ever – so for 2 weeks all my orders got declined – making my potential customers upset and me very frustrated. Besides the cheating then this gateway is so badly built that you can only use Internet Explorer to access the gateway with and you must disable popup blockers. The DNA-gateway does not permit you to use the mouse for copy/paste of customer info which makes it very slow to use. This doesn’t really matter because they never pay you 1 single cent.

A great way that these sellers also make money is to make up fines from Mastercard or VISA – that supposedly requires 1-4 years litigation. These fines do not exist at all or at a much lower amount – or, are only temporary fines that are refunded to the processor after a short “hold”-period. The processor has already deducted these funds from the merchant – but the merchant never gets these funds again. Ever.

A processor broker/seller having a foreign name – Gany Karim – (this is not his real name – just the name he uses for his customers – so he can not sue me for defamation and supposedly located in Canada sold me those 2 solutions. The total loss was more than 40.000 USD in direct losses – plus I was not able to process for several months waiting for a new solution to be made – which never came. However, all his “fees” that ran into 2.000 USD – including extra fees that were never explained to me – was deducted from my processed funds and funny enough I never saw 1 cent at all.

Before a processor loses his bank connection then the bank has for some time asked the processor to change certain procedures which the processor chooses not to do so. Then the bank closes the processors merchant account and then the processor blames the bank for the problem.

When you ask the processor which bank they use then they will never tell you.

After a couple of years you have forgotten all about it and have moved on – which is what these scam artists hope for.

These processors also have no or very poor customer service (before they close down your account). And after they close down the account – then they have zero customer service and you can not get hold of them at all or not talk to the decision maker.

Other times then the processor sets up another corporation which they process thru. Then in your contract it says that the processor is not liable for losses incurred if your processor is not paid. The funds will then be in the other company (that the processor also owns).

Are there any offshore credit card processors that are not con artists?

Yes, there are some good offshore merchant account processors out there. I use some of them myself for my own websites so I know that they are reliable.

You will get your own MID account and be able to accept VISA, Mastercard, ACH and maybe other cards also (depending upon your business area) – for a small setup fee of $599.

You also get to talk to a real life person – who knows the requirements of a merchant – and uses the very same processor solutions that I sell. So, I practice what I preach so to speak.

Setting up an offshore merchant account not only involves paperwork but also certain fees as well. It would be ideal if there is such a set up that is virtually free, which some merchant account providers do offer. But for offshore merchant accounts, there will always be fees involved.

There are a great deal of hesitation on merchants’ minds to set up offshore, one of the reasons behind the doubts is the notion that there are ”hidden” fees in the contracts for offshore merchant accounts. What happens in this scenario is that you’ll be introduced to a list of rates that you’ll sign up for because you have found them to be reasonable. But once the bill comes in, you’ll see a number of additional fees in small amounts but when added all together have actually eaten a considerable percentage of the amount you need to pay for the month. This can be really frustrating, isn’t it?

So, to assist you in this setback, provided are standard fees that merchant account providers standardly offer in setting up an offshore merchant account:

Application Fee
Setup Fee
Programming Fee
Annual Fee
Monthly Maintenance Fee
Overlimit Fee
Gateway Setup
Transaction Fee
Retail Swipe Software fees
Check-by-phone/fax PC software fee
Web Shopping Cart fee
Discount Rate fee
Address Verification (AVS) Fee
Statement Fee

How you are charged

Application fees are rarely charged nowadays. This is so because of the growing competition among merchant account providers. Zero application fees are the one of the marketing strategies to attract clients. But, just to give you a head start, industry rate for application fees ranges from $75 – $125.

Setup fees are also a thing of the past. Most providers don’t charge this anymore also as a part of the package to keep clients coming in. Industry rate is from $50 – $150.

Programming fees are applied when you want to install a software or terminal. Most providers don’t charge this anymore as programming fees are considered to be part of the set up process. Industry rate is $50 – $95.

Annual fees serves as a membership fee in certain ways. By the book, purpose is for the maintenance of the account. But it’s now also being taken out of the charges as part of attracting potential clients and keep the current ones in the circle. Industry rate is from maximum of $125.

Monthly maintenance fees can be regarded as the other option for annual fee. This is a choice of the merchant account holder if they want to pay the whole dues every year or divide the amount by 12. but in this day and age, monthly maintenance fees are also being taken out to promote client loyalty. Industry rate is up to $10.

Overlimit fees are charged when the account exceeds its limit. The industry rate varies because the overlimit amounts are grouped with the corresponding penalties. But this fee is also not charged anymore as part of efforts to boost client patronage.

Payment gateway setup fee if for the the installation of the payment gateway that is critical to your offshore merchant account. Payment gateway receives the credit card information of the your customers. This is also being taken out of the bill as it is regarded as part of the setup process. Industry rate is $99 – $299

Transaction fees are the fees charged by the processor for every credit card transaction. This is charged even if the transaction was approved or declined. 20 – 30 cents is the charged for every transaction made either by swiping, keying, over the internet or mail-order-telephone-order (MOTO).

Retail swipe software is a credt card processing software solution. This serves as an wireless terminal if you have a PC or a laptop with an internet connection. You can print out receipt real-time from top-of-the-line retail swipe softwares available in the market. For better client patronage, most merchant account providers are also charging zero for this service. Industry rate is $175 – $395.

Check-by-phone/fax PC software fee are charged when payments using a check are made over the phone, or send by fax or electronic check payments. This is still done, but rarely. For better efficiency and security, online credit card transactions are preferred. Plus, currently, there is no charge for this service as well. Just so you know, industry rate is $149 per month.

A web shopping cart fee is for the use and maintenance of your online shopping cart. Of course, when you have an offshore merchant account, you can also enjoy the luxury of selling your products and services online, and with a shopping cart, you have global market. But this fee is also being charged free as well, for better client loyalty.

The discount rate fee is the percentage charged for each transaction that the processing company (merchant account provider) charges to manage the transactions for you, either swiped, over the internet and MOTO.

The Address Verification System is a technology that double-checks the validity of the address that your customers enter for product shipping. What this system does is verify and compare the address keyed in with the address registered in the customer’s credit card issuer. Industry rate is from $5 to $10.

The statement fee is the charge for the production and mailing of your monthly statements. Your monthly bills as an offshore merchant account holder includes all the deposits in the account, total of volume sales, and other charges for the month. Now, this fee is also free of charge for improving customer service. But industry rate is $10- $15 per monthly statement.

What to look forward to

Most of the fees are now taken out to attract prospective offshore merchant clients and for to keep the current ones happy and satisfied. Some even have risk-free trial periods or offer no fees at all at the initial setup, but charge little for the crucial services which is understandable considering that every business, no matter what nature it is, needs financial resources to stay afloat. Taking out some fees is part and parcel of staying in the competitive arena. Just always know your options as an offshore merchant account holder, consult if you can’ fully comprehend, and weigh all the factors. Lastly, there will always be fees, just know which ones are really worth paying for.

It’s true that having an offshore merchant account will expose your business to risks of high volume sales, chargeback refunds, financial fraud and bank processor scams. But such an account is greatly needed if you want to extend your business online and sell items in there. Actually, an offshore merchant account is like a license to sell on the internet.  And after all, business strategies that don’t have risk in them don’t exist.

Simply put, you need an offshore merchant account because it’s only through it that you can process credit card transactions.  But if you want a more versatile tool, you can go for an offshore credit card processing. By having one, merchants like you will be able to accept various types of credit cards as well as accept credit card payments in multiple currencies. Offshore credit card processing is the only offshore transaction that offers zero taxation and protection against currency fluctuations. Merchants will not only get exceptional tax reduction benefits but also the capacity to accept multiple currencies. The other benefits in getting an offshore merchant account include  zero taxation and protection against currency fluctuations. Merchants like you will not only get exceptional tax reduction benefits but also the capacity to “confidently” accept multiple currencies.

To get an offshore merchant account, you have two options. One is to go to the local banks. Natwest, HSBC and Barclays, for example, all offer ePDQ services. You can also transact with companies that solely provide online merchant accounts to businesses globally.