Who Needs Offshore Payment Gateways and Why?

With the business realm evolving at a higher rate than anticipated, e-commerce has started to dominate the scene. With its evident and expansive growth, it can be difficult to keep track of the most fundamental aspects of maintaining a business, more importantly, the profit.

With the passage of time, the use of cash is declining. This especially comes into focus when you consider Americans have 511.4 million credit cards, and the number of people going digital is only going to rise. This has forced most companies to go digital with credit and debit card payments. Almost every business has now become fully digital.

In these times, high-risk businesses might need to branch out and find safe payment gateways worth their time. For that, merchants need a deeper understanding of what these payment gateways can do for them and how much of a difference they can make.

What Are Offshore Payment Gateways?

A payment gateway is an online payments’ service that can be used by e-commerce websites to carry out monetary transactions. An offshore payment gateway facilitates card payments and transactions from countries outside of the registration of a company. But a pothole most merchants find themselves in is the question of safety.

As simple as it may sound, new concepts take time and resistance before being fully functional.

Payment gateways are there to ensure safe transactions. These payment gateways greatly help in tax savings and help the owner stay anonymous. They are mostly used by businesses that are considered high-risk by banks.

High-risk and Low-risk Businesses

While onshore payment gateways greatly aid businesses that are classified as low-risk, there is a misconception about how both these kinds of businesses operate. People often think low-risk businesses to be legal, and hearing high-risk instantly brings the word ‘illegal’ into their minds. But that’s not always the case.

High-risk businesses get that name from the high number of credit card frauds and chargebacks. Once a business has been pushed into the high-risk bracket, it is almost impossible for them to find a merchant account. Some high-risk industries include –

• Kratom – Kratom is a fairly new but widely popular product that is said to alleviate body pain, stress, and symptoms of depression. But the efficacy of the product continues to stay in question due to the minimal research backing up its claims. This is why acquiring banks and payment processors flag it as high-risk.

• Adult Entertainment – There can be many reasons why banks turn down the adult industry merchants. A large volume of transactions, subscription-based services, or simply the controversy surrounding the content of adult websites. 

• Tobacco – The health risks that come with tobacco carry a bad name, along with the increased chargebacks because of online shopping. Together, these reasons make it hard for tobacco merchants to get hold of accounts, and if they do, the fees can be unsparing.

• Pharma – Pharmaceutical trade in the UK and US is expensive, and it’s more beneficial for them to be based offshore. This marks the business to be high-risk despite being one of the most successful businesses in the world.

• Online Poker – Also known as the gaming business, online poker is mostly based offshore and has many money laundering and fraud instances. Payment processors try to avoid them as best they can, leaving them stranded.

So what kind of businesses need offshore payment gateways? For the most part, high-risk companies can include a plethora of businesses like cigarettes, casinos, online marketing, etc. But some low-risk companies dabble in it as well. Once you have your needs figured out, you can come to understand what a solid offshore payment gateway can do for your company.

Importance of Offshore Payment Gateways

The biggest reason why high-risk merchants opt for offshore payment gateways is that they can’t don’t get accepted by onshore payment processors for designated reasons. Rejection from most payment processing banks can be deterring, but high-risk businesses deserve to make a profit too.

Whether you are a pharma merchant or someone with a poker business, one of the first advantages is the rise in revenue and sales. Your money will start pouring in at decent intervals. You will get timely payouts, and the online processing will be quick.

They have less paperwork and often assign an agent to give you digital reports to help you keep track of the inflow of your money.

Good processing companies will make sure to give you a seamless experience and keep you protected from fraud and chargebacks. It’s important to consider the 2.2 million fraud reports that show up in the 2021 statistics. Choosing the right gateway might help you seal yourself against signature forging or hacking.

While the advantages pack up, it’s also important to remember that it’s not cheap by any means. Your per transaction fee can be anywhere between 4-10%.

Takeaway

While it can be a tricky business to find the right solutions for your company, doing your research will pay off. With the pull faced by all businesses due to the pandemic, smaller businesses struggle the most. Especially the small high-risk businesses. A provider that considers the current landscape while keeping the aged one in mind is the most ideal one. There is no shortage of good companies willing to help you and your business grow. Getting control of the money you earn can just be one step away.