Top 5 Reasons Why An Offshore Merchant Account
May Be Right For You
by James Allen
Incorporating an offshore merchant account into
your online business is a process anyone who makes income online should
consider. Currently little is known about this niche financial tool within the
USA. The fact is though, not only can offshore merchant accounts be found that
are completely up to par with their domestic counterparts, but they can also
offer a number of benefits that can make their use even more appealing.
Next, we'll explore a few of the advantages of offshore merchant accounts in the
hopes that the information may prove profitable to our fellow internet
marketers.
1. Protecting Your Income
When talking about "going offshore", asset protection and legal tax
reduction are the first things that usually come to mind. Acquiring a merchant
account in an a low or no tax jurisdiction outside of your own borders can help
you accomplish both of these things legally and securely if arranged properly.
Plenty of countries outside of the U.S.A. have an equivalent level of technology
and banking infrastructure. Furthermore though, there are a number of these
countries that are also much more tax friendly and privacy friendly than current
laws allow for American banks to be.
Selling your products, services or subscriptions via an international merchant
account and receiving the payments through an offshore corporation into an
offshore bank account can legally cut down on your tax burden and put more money
in your pockets.
2. New Businesses
For the new online business, procuring a domestic merchant account can often be
difficult. Your chances of being accepted for a domestic merchant account are at
the mercy of many factors, including your credit history, the type of business
you are running, your business plan, funding and more. Furthermore, a domestic
merchant account provider can require a large up-front security deposit if you
are a new business.
On the other hand, many offshore merchant account providers are considerably
more entrepreneur friendly and are much more likely to accept a new business for
a merchant account. On top of this, there are legitimate offshore providers who
will set up your account without requiring a large deposit. Although the
discount rate will invariably be higher, this can still be a better option for
the new business where cash flow is important from the start.
3. Expanding Your Business Globally
Whether you are a new or established online business, expanding your customer
base globally is an excellent way to increase your bottom line. Utilizing an
offshore merchant account can help you achieve this in a couple of ways.
For one, there are plenty of international providers who will allow you to
accept not only Visa and Mastercard, but also credit cards commonly used outside
the U.S. such as JCB, Switch, Maestro and many of the debit cards common in
Europe.
Furthermore, since your offshore merchant account can be integrated with an
offshore banking account, you can accept funds in multiple currencies. Your
customers can be presented with prices in their local currency and pay in their
local currency, making it more convenient for them and therefore, more
profitable for you.
4. "Sin" Businesses
Let's face it, despite the ideal of pure capitalism that America claims to be
all about, the truth is another matter. Just try getting a domestic merchant
account if you are operating an adult website! Banks will claim that high levels
of chargebacks and fraud are the real reason they won't grant merchant accounts
as easily for these types of businesses. Considering their profit potential and
the fact the higher risk accounts can be balanced off with lower risk accounts,
that defense doesn't quite hold up.
Fortunately, for those who have seen where the big money lies in online business
- online gambling and online pharmacies for example, there are plenty of
countries that aren't run by a "moral majority" that will be more than
happy to consider almost any type of business for a merchant account.
5. Other Considerations
As you can see, there are many reasons to look into setting up an offshore
merchant account. You can find an offshore merchant account to suit almost any
situation, be it integrating it into your online shopping cart, accepting
payments for recurring subscriptions or making sales of downloadable products.
Many offer easy online access and administration too.
Keep in mind though, discount rates tend to be higher for offshore merchant
accounts - upwards of 6% as opposed to 2-3% domestically. Also, depending on the
type of business and other factors, the hold back amount may be higher. Both of
these factors are small prices to pay considering the benefits though.
When comparing offshore merchant account providers, be sure to take these points
into consideration. Ask plenty of questions and make certain to get
recommendations from current customers. Do your due dilligence and always
consult your lawyer or financial advisor before taking any action.
Contrary to what you might have come to believe (much to the benefit of domestic
banks), there are plenty of legitimate providers of offshore merchant accounts.
Coupled with the multitude of profitable and protective benefits that many
offer, all internet marketers and online business people would be well advised
to explore this financial tool further.
About the Author:
James Allen is the editor of (www.GatesToWealth.com)
which introduces offshore banking and other tools of offshore asset protection
to internet marketers and online businesses. To learn more and to subscribe to
'Mind the Beach' - the newsletter of offshore living and lifestyles, swing on
by: http://www.gatestowealth.com
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