Ordinary payment processing is complicated. But finding good offshore, international, or high-risk payment solutions can be a real nightmare. If you fall into one of these categories, youâve likely had your merchant account applications denied at least a few times. Even worse, perhaps youâve had your processing service terminated and your money withheld from you for months. We understand your struggle. Weâve seen hundreds of businesses go through the exact same thing, and weâre here to help you find the perfect offshore merchant account for your high-risk business.
If youâre just looking for a run-of-the-mill high-risk merchant account for your business, youâll want to check out our article The Best High-Risk Merchant Account Providers. The high-risk category often includes business types that you wouldnât normally associate with the term âhigh-risk,â such as airlines or online furniture sales. While these types of businesses are usually treated as high-risk by banks and processors, they can usually be approved for a domestic merchant account by working with a high-risk specialist.
For our purposes, weâll use the terms offshore merchant account and international merchant account interchangeably, as they mean the same thing. Both terms refer to a merchant account that is underwritten by a bank or processor that is situated in a different country from the one where the business is located. The most common reasons for needing an offshore account include the following:
- You do a significant amount of business in a foreign country and need to accept payments in the local currency.
- Your business has offices in multiple countries, and you need separate merchant accounts for each location.
- Your business is considered to be so risky that you cannot obtain a regular high-risk merchant account in your own country.
Below, weâll discuss the factors to evaluate when considering an offshore merchant account and several special features that youâll want to include in your service. Weâll also profile four offshore merchant account providers that we feel offer superior service and overall value in comparison to their competitors.
Factors To Consider When Selecting An Offshore Merchant Account
While many offshore merchant account providers also specialize in high-risk accounts more generally, not all high-risk processors work with international merchants or provide offshore accounts for domestic merchants. Many high-risk specialists only work with US-based businesses, and only provide accounts through US-based banks and processors. Before you apply for an offshore account, youâll want to confirm that the company youâre considering works with businesses located in your country. This information might be spelled out explicitly on the providerâs website, or you might have to talk to their sales staff to get a confirmation.
Providers that specialize in setting up offshore merchant accounts can usually get you an account in just about any country around the world, though obviously, there are exceptions. As a US-based merchant, donât expect to set up your offshore account in a place like Afghanistan or North Korea. Itâs simply not going to happen. With the exception of countries limited by political considerations or a high level of instability, however, the possibilities are wide open.
In most cases, you should aim to get an account in a country where you expect to do a significant amount of business. On the other hand, if your business is going to operate exclusively in the United States, an offshore account serves mainly as a last resort for getting a merchant account when you simply canât get approved for a domestic high-risk account. Banking regulations are more relaxed in certain other countries, and the willingness on the part of banks and processors to work with high-risk businesses is also more favorable. At the same time, you should be aware that setting up an offshore account under these circumstances, while it might be your only option for accepting credit cards, can present some serious risks to you as well. Your ability to pursue a legal remedy against a foreign bank or processor might be severely limited â or even nonexistent. At a minimum, you should consider legally registering your business in the country where your account will be located. Even with legal standing in the country, however, be aware that it might be extremely inconvenient and expensive to pursue a legal action outside of your own country.
Thereâs also an increased risk that you could become the victim of fraud or identity theft. Banks in other countries collect the same personal data about you and your business that US-based banks do, but they donât always do as good a job of protecting it. Youâll want to keep an especially close eye on your merchant account, your business account, and any personal accounts about which youâve released information to get approved for an offshore merchant account.
High-risk merchant accounts are notorious for including higher processing rates and account fees, and offshore accounts can be even worse. Providers know youâre particularly desperate and some, but not all, will take advantage of your situation by charging you as much as they think they can get away with. We recommend that you shop around and compare multiple quotes when looking for an offshore account. Donât accept the first offer from a bank or processor just because theyâre the first one that hasnât rejected your application due to the nature of your business.
Note that merchant account providers who market offshore accounts often downplay or fail to mention these risk factors, so itâs up to you to look out for yourself. Do your own independent research, compare multiple offers, and thoroughly review all contract documents before you sign up for an account.
Special Features Of Offshore Merchant Accounts
For the most part, youâll want the same services and features for an offshore account that you would want for a traditional merchant account. This includes processing hardware such as credit card terminals and POS systems for retail merchants, and a robust payment gateway for eCommerce merchants. Youâll also want an online account dashboard of some kind that allows you to monitor your sales in real-time. While online account access is now a standard feature in the United States, you might not always find this feature with an offshore account. Mail-order and telephone-order (MOTO) businesses often find a virtual terminal to be the most cost-effective method for inputting transactions. Depending on the needs of your business, a smartphone- or tablet-based mobile processing system might also be important. Almost all providers offer some type of mobile processing system these days, either as a proprietary product or through a partnership with a third-party provider. Be aware that very few mobile processing systems have begun to offer EMV-compatible card readers, and youâll often be stuck with a magstripe-only reader.
In addition to these basic merchant account features, there are several special features that your offshore merchant account might (or might not) include. How important these features are to your business will be determined by how you intend to use your account. Extra features to look for in an offshore merchant account include the following:
- Multi-Currency Support:Â If youâre going to do business in a foreign country, it only makes sense that youâll want your customers to be able to pay in their local currency. Multi-currency accounts allow you to maintain balances in multiple currencies and can save you a ton of money in currency conversion costs.
- Currency Conversion Services:Â Having an offshore account will invariably require you to convert funds into your own local currency at some point. Most offshore account providers include built-in currency conversion services that allow you to convert foreign funds when it comes time to transfer them to your business account. While these services can sometimes offer you much lower conversion fees than what a bank would charge you, it still pays to shop around for the best deal on this service. You might save money by using an international transfer service such as TransferWise or OFX.
- Expanded Anti-Fraud Features:Â Offshore merchant accounts invariably involve a higher degree of risk of fraud than their traditional counterparts, so youâll want as many extra services to avoid it as you can get. Most offshore account providers offer a number of enhanced anti-fraud features as a standard part of their service. These features automatically detect suspicious activity, hopefully stopping any fraudulent activity before it can affect your business. Providers are increasingly turning to artificial intelligence (AI) features to improve their ability to detect potential fraud beyond what would be possible with a traditional algorithm.
With these considerations in mind, letâs take a brief look at four of our overall favorite offshore merchant account providers:
Durango Merchant Services
Durango Merchant Services is a small merchant account provider headquartered in Durango, Colorado. Established in 1999, the company specializes in providing high-risk and offshore merchant accounts to hard-to-place businesses. They work with a wide variety of banks and processors to find a suitable account for almost any business. While they canât place 100% of the merchants who apply to them, their track record is very good, and their sales process is so transparent and honest that weâve even seen praise for the company from merchants whoâve been turned down for an account.
If you need an offshore account, Durango has you covered. Their accounts include multicurrency support as well as enhanced anti-fraud features to keep you protected. They can set up accounts in countries as diverse as Germany, Panama, Spain, and many others.
Durango doesnât try to set you up with expensive leases when it comes to processing equipment. Instead, they offer a variety of terminals for sale right on their website. Options include both wired and wireless models, with some offerings that support NFC payments. They also sell the iPS Mobile Card Terminal, which connects to a smartphone to provide mobile payments capability in conjunction with the iProcess mobile app. If youâre using a virtual terminal, they sell the MagTek DynaMag, a USB-connected magstripe card reader that attaches to your computer. Unfortunately, itâs Windows-only. Durango currently doesnât offer any POS systems for sale.
The company supports eCommerce through its proprietary Durango Pay payment gateway, which integrates with the numerous processors the company uses and includes support for most of the popular online shopping carts. Durangoâs gateway also features an Authorize.Net Emulator, which allows it to interface with any shopping cart that works with Authorize.Net (see our review).
Because Durango works with such a wide variety of third-party processors to set you up with an offshore merchant account, they donât list rates or fees on their website. These will vary tremendously depending on which processor they set you up with. While we normally like to see more transparency from merchant account providers, in this case, itâs understandable. Depending on your qualifications, you can expect either an interchange-plus pricing plan or a tiered one. Merchant accounts through Durango donât seem to have standardized fees. Again, these will depend on the terms that your backend processor imposes.
Durango assigns a dedicated account manager to every one of their merchants, which means youâll be talking to the same person every time you have an issue. While this can sometimes be problematic outside of regular business hours and when your account manager isnât available, overall it provides a much higher level of service than youâll get from a random customer service representative.
- Direct sales of processing equipment
- Reasonable rates and fees based on your business and your backend processor
- Dedicated account manager for customer service and support
- No support for POS systems
- USB card reader not compatible with Mac computers
For more information about Durango Merchant Services,Â read our complete review.
SMB Global is a new high-risk provider that was spun off from one of our favorite providers, Payline DataÂ in 2016. Headquartered in South Jordan, Utah, the company specializes in providing merchant accounts to high-risk and offshore businesses. Using a variety of backend processors, theyâre able to approve a merchant account for almost any high-risk business (including those selling CBD oils). They have an excellent reputation for fair prices and top-notch customer service.
As a newly-established business, SMB Global is still a little rough around the edges, lacking a mobile processing system and credit card terminals for retail merchants. At the same time, they offer a full range of services for eCommerce merchants, including a choice between the NMI Gateway and Authorize.Net.
Because they work with so many banks and processors to get you approved for an account, the company doesnât offer any pricing information. Processing rates, account fees, and contract terms will all vary widely depending on which backend processor is handling your account. While we highly recommend that you request an interchange-plus pricing plan, be prepared to have to accept a tiered plan instead, particularly if you havenât been in business for very long. Likewise, you can also expect to have a standard three-year contract with an automatic renewal clause and an early termination fee if you close your account early. As a high-risk merchant, you should be prepared to have a rolling reserve included in your account agreement.
SMB Global requires a minimum processing volume of $50,000 per month for an offshore merchant account, although they will occasionally waive this requirement if your business has a very strong financial history. Offshore accounts support multi-currency processing, allowing you to avoid cross-border fees. They also feature dynamic currency conversion, letting your customers pay in either their local currency or the currency in which you bill them.
- Offers international merchant accounts to a wide variety of industries
- Reasonable pricing and contract terms
- Excellent customer service
- No mobile app
- No information available about credit card terminals or POS systems
For a more detailed look at SMB Global, be sure to check out our full review.
Host Merchant Services
Host Merchant Services is a relative newcomer to the merchant accounts business, first opening in 2009. The company is headquartered in Newark, Delaware and has a second office in Naples, Florida. While they primarily cater to traditional, low-risk businesses, they can accommodate several categories of high-risk businesses and also offer offshore accounts. Their interchange-plus-only pricing and a full range of products and services make them an excellent choice â if you can get approved. A former web hosting company, HMS is ideally suited for eCommerce merchants. They use TSYS as their primary backend processor, but can also work with several international banks and processors to get you an account.
For retail merchants, HMS offers a variety of Verifone and Equinox (formerly Hypercom) terminals. Terminals are offered for sale, and the company does not lease its equipment. While prices are not disclosed on the HMS website, you should be able to negotiate a very reasonable deal on terminals, especially if you need more than one. If you already have a compatible terminal, theyâll reprogram it for free.
HMS also offers a variety of POS systems that utilize either tablets or touchscreen displays. Choices range from an 8â tablet-based system up to a 17â touchscreen monitor. The companyâs Starter, Plus, TouchStation Plus, and Custom POS options should meet the requirements of just about any business that needs or wants a POS system.
If you need a mobile processing capability for your business, HMS has you covered, offering the ProcessNow mobile payments system via a partnership with TSYS. ProcessNow works with either iOS or Android phones, but the current card reader is magstripe-only and requires a headphone jack to plug into.
As a tech-focused company, eCommerce is HMSâ specialty. The company has recently introduced their proprietary Transaction Express payment gateway, which includes a free virtual terminal. HMS also supports a large number of third-party gateways, including Authorize.Net.
HMS uses interchange-plus pricing exclusively for its low-risk merchants, but you might have to pay tiered rates if you have an offshore account. While they donât disclose their rates on their website, theyâre based primarily on monthly processing volume and are very competitive. Fees are not disclosed either, but include a $24.00 annual fee, a $14.99 monthly account fee (which includes PCI compliance), a variable payment gateway fee ($5.00 per month for Transaction Express, $7.50 per month plus $0.05 per transaction for Authorize.Net) and the usual incidental fees (i.e., chargebacks, voice authorizations, etc.). High-risk and offshore merchants should expect to pay higher fees than these, and possibly additional fees as well. In particular, be prepared to have a rolling reserve included as part of your account.
HMS provides customer service and support via 24/7 telephone and email. Chat is available via the HMS website during regular business hours. They also feature an extensive collection of articles and blog posts on their site for customer education. Support quality appears to be well-above-average, based on the almost complete absence of complaints about it on the BBB and other consumer protection websites. If your business falls into one of the categories of high-risk activities that the company can accommodate, HMS is an excellent choice for an offshore merchant account.
- Full range of products and services for retail and eCommerce businesses
- Exclusive interchange-plus pricing plans (for low-risk businesses)
- Excellent customer service and support
- Rates and fees not disclosed on website
- Can only accommodate a small number of high-risk business categories
- Mobile card reader not EMV-compliant
For more information, see our complete review.
Easy Pay Direct
Easy Pay Direct is headquartered in Austin, Texas and has been in business since 2000. The companyâs primary product is their proprietary EPD Gateway, but they also provide full-service merchant accounts for international, high-risk, and traditional non-high-risk merchants. High-risk merchants will have to pay a premium in terms of processing rates and account fees, whether they’re partnered with a domestic or offshore bank or processor. However, the additional expense is entirely reasonable under the circumstances.
Like most offshore merchant account specialists, Easy Pay Direct works with a variety of banks and processors, both domestic and international, to find one thatâs a match for the needs of your business. Youâll have to pay a $99 account setup fee to get started, but considering the extra effort required to underwrite a high-risk or offshore account, we feel the expense is justified in this case. Processing rates will be under a tiered pricing plan, but you should still have some room to negotiate your rates, especially if you have a high monthly processing volume. Contracts generally follow the industry standard, or a three-year initial term that automatically renews for one-year periods after that. One very positive feature about Easy Pay Directâs contracts is that they do not have an early termination fee, even for high-risk businesses. While this isnât quite the same thing as true month-to-month billing, it does make it much easier to close your account without penalty if you have to.
One helpful feature offered by Easy Pay Direct is called load balancing, where a business can divide its incoming funds among multiple merchant accounts. This is particularly helpful for high-risk businesses that often exceed the monthly processing volume limits imposed by the processor underwriting their account. Just be aware that youâll usually have to pay separate monthly fees for each account, so it might not be cost-effective for some merchants. Also, be aware that you might not need this feature if you opt for an offshore account. Underwriting guidelines in some (but by no means all) foreign countries are more relaxed, and you might not have a monthly processing limit imposed on your account at all.
Although Easy Pay Direct doesnât get as much attention as other, better-known processors, itâs a solid choice for merchants in the high-risk category or those who need an offshore account. We particularly recommend the company for high-risk eCommerce businesses due to the robust feature set of their EPD Gateway.
- Load balancing feature for high-risk merchants
- No equipment leases
- No early termination fee
- $99 account setup fee
- Three-year contract with automatic renewal clause
Check out our full review of Easy Pay Direct for more information.
Having a hard-to-place business doesnât mean you have to run your company through Bitcoin. You can accept credit card payments just like any other business by finding a payment processor that will set you up with the right acquiring banks. At the same time, you need to be fully aware that, for a US-based business, signing up for an offshore merchant account is a risky endeavor. Youâll want to be very cautious and carefully research any provider you consider, even the ones weâve recommended above. Take extra care to protect your sensitive personal financial data and be sure your account includes additional fraud prevention features. You might also want to consider registering your business in the country where your merchant account is located â just in case. Having a merchant account in Panama might sound very tempting if youâve been repeatedly turned down by domestic providers, but it will be very expensive to have to travel there in person if you later run into legal troubles with your account provider.
Of the four offshore merchant account providers weâve reviewed above, Durango Merchant Services is undoubtedly the best all-around provider of the group. They disclose more detailed information about offshore accounts than any of the other providers. SMB Global is also an excellent choice. While the company itself is very new, they have an impressive track record from their days operating as the high-risk division of Payline Data. Finally, both Easy Pay Direct and Host Merchant Services offer a solid line-up of products and services for both eCommerce and retail merchants. If you need an offshore account to break into the world of accepting credit cards, they both have everything you need to get started.
Finally, we canât caution you strongly enough that selecting and setting up an offshore merchant account involves a higher level of risk on your part, and youâll need to be extra cautious in choosing a company to go with. Relaxed underwriting guidelines and a general lack of monthly processing limits make offshore accounts very tempting to merchants whoâve had a hard time getting their business approved for a traditional account, but these advantages come at a price. If anything goes wrong in your relationship with your provider, you might face some real challenges in pursuing a legal remedy. You should also be aware that if this happens, the US-based provider that brokered your account will not be able to help you in most cases.
Do your homework! Research your provider thoroughly and review all contract documents very carefully before signing up. While these steps wonât eliminate the chance of things going sideways somewhere down the road, they will shift the odds considerably in your favor.
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