In recent times, the number of people dependent on online shopping has increased. So there is also a rise in sellers listing their products online to reach a broader consumer base. However, if you do not have a credit card processor, you might face issues with credit card payment.

To avoid such issues and reach a global market, merchants go for offshore merchant processing. But is it useful? Does it reflect the value of the popularity it gets? You will understand all these through this article.

What is Offshore Merchant Processing

To understand the meaning, let us break it into two parts. First is Offshore, defined as a location beyond your own country. When it comes to business or banking, the term offshore means a location outside the location of your company’s headquarter.

The second term, processing, particularly payment processing, is a transaction that enables merchants to accept digital payments, debit cards, and credit cards from their consumers.

So, offshore merchant processing is for merchants who have their merchant account in a different country from their company’s headquarters. The payment processing allows such merchants to smoothly manage their payment from a different location, regardless of their business type.

Broadly two types of businesses prefer offshore payment processing. You will read about it in the next section.

Businesses that Prefer Offshore Merchant Services

Although any business can avail of the offshore merchant payment processing service, mostly merchants falling under high risk prefer it.

  • High-risk Merchants

A business exposed to fraudulent transactions falls under the high-risk category. Banks classify some businesses as high-risk as they might come with continuous chargebacks, refunds, and frauds.

Other factors that put a business in the high-risk category are non-compliance with safety regulations, lousy credit card scores, and high sales volume. Banks often charge extra fees or limit them from future transactions.

Some people have this perception that all high-risk businesses are illegal. However, the truth is several legal businesses also fall at high risk. Blockchain, cryptocurrency, travel, nutraceuticals, tobacco, online pharmacies, finance, health, weapons, adult-oriented services, or gambling are some businesses that fall under the high-risk category.

  • E-commerce Industries

The E-commerce industries form a significant part of the high-risk business. E-commerce is beyond the limits of political boundaries. Thus, the business requires payment processing to overcome the challenges of international transactions.

The wide range of benefits provided by Offshore payment processing is the rean behind its popularity.

Reasons why Offshore Payment Processing is gaining popularity

Having a merchant account in a different country provides several benefits. It offers you tax advantages and saves you from currency fluctuations. Here is a list of benefits a business gets from offshore merchant processing.

  • You Can Accept Multi-currency

Sometimes consumers avoid a product because they fail to understand the amount in their currency. It directly impacts your consumer reach. You can avoid this problem of cart abandonment through an offshore merchant service. It will allow you to accept currencies of different countries and give consumers the convenience of knowing the price in their preferred currency.

  • It Provides Security

Online businesses, particularly high-risk ones, are always at risk of fraud. To avoid such issues, Offshore payment processors provide security against frauds and do all kind of fraud management. They take various measures, such as screening systems, address verification systems, and fraud management, to protect merchants from excessive chargebacks and frauds.

  • It Helps Business Save Money

An offshore processor not only helps businesses to increase their consumer base and profit, but it also helps them save money. It saves the operational and processing costs of business. Besides, having a processor also reduces tax and lowers foreign exchange rates. Thus, saving money in every way.

  • It Gives a Solution to High Volume Sales

Offshore payment processors are liberal. They usually do not have a volume cap. Thus, most businesses with fluctuating volume caps, such as pharmaceutical, nutraceutical, or multi level marketing, prefer payment processors.

  • It Gives You Access to New Emerging Market

When a particular company opens its business in another country, it has a broader reach. They learn about the potential market they might not get in their own country. Since transactions become more accessible with a payment processor, they can explore different countries without worrying.

So, these are some of the many benefits of availing an offshore payment processing.

Pick the Best Offshore Payment Processor

To ensure that you get the benefits of offshore merchant processing, make sure you wisely choose your service provider. Here are some tips to help you.

  • Look For a Reputed One

The best way is to pick a service provider with a successful track record in an industry similar to yours, mainly if you are a high-risk merchant. You can read the reviews of their service on their site. If a friend recommended a particular service provider, ask them about the service they provide and the price they cost. Settle for a company only after extensively researching it.

  • Avoid any Extra Charge

Undoubtedly, a high-risk merchant pays more than a low-risk one for the same service. But some service providers might charge inflated fees or extra charges that you can avoid.

  • Stay Honest

While selecting a service provider, put all the essential details about the operation of your business, nature, and other details. Do not try to hide something or give incorrect information to your provider. Once you honestly put everything, understand how they can help you. If the partnership works, you can choose them as your service provider.

  • Check for Their Testimonials

Another way to understand whether a particular processor could fulfill your needs or not is to check the clients’ testimonials. You can find testimonials on the official site of a service provider. If the testimonials are satisfying, you might move forwards with the company.

So, these are some things you should do before opting for an offshore payment processor.


Offshore payment processing allows you to mold according to the needs of consumers. Nowadays, a significant number of consumers choose credit payments instead of cash. Besides, for a global reach, you have to accept international currencies. A payment processor solves almost all of these issues. Thus, the demand for such services is increasing among the masses.