Offshore Merchant Account – Documentation, Procedure & Advantages

Usually, e-commerce businesses placed in non-resident nations are the ones that go for an Offshore Merchant Account (OMA). It enables the business to accept payments via their website as well as other payment systems.

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offshore merchant account

Offshore merchant accounts are proven to be the best way to take funds from foreign buyers, as they help the firm owners to bring down their exposure and risk by letting them carry out process transactions in several currencies.

So, through this article, we will understand more in-depth about,  what is meant by an offshore merchant account, the documents required for it, applying for an offshore merchant account, qualifying for it, and many more topics revolving around it.

What Is An Offshore Merchant Account?

An offshore merchant account is one where the acquiring bank or offshore payment processor is situated elsewhere than the main office of the company.

For instance, if a US company opens a European account for payment processing, the European account would be considered offshore for the US company.

International merchant accounts and offshore merchant accounts are comparable. The primary distinction is that US acquiring banks typically classify merchants looking for offshore merchant accounts as high risk. While high-risk and ordinary merchants who wish to benefit from the explosive expansion of international e-commerce use international merchant accounts.

These accounts also offer tax benefits because they are located in countries with no tax obligations. Adult amusement, Online drugstores, casino games, sportsbooks, electronic money, imitation goods, cigarette products, travel-based, and pharmaceuticals are positioned to gain the most from establishing an OMA, offshore merchant account.

How to Qualify For An Offshore Merchant Account?

Based on the nature of your offshore company, it might be critical to ensure that your already existing merchant account is an OMA. This section would be applicable, for instance, if your organization includes a digital commerce element or takes payments from any nation like the U.S.A, Germany, or Europe.

Nevertheless, not all sellers fall into such classifications as even small merchants may require such choices for their distinctive reasons, like receiving credit card payments from clients living overseas who require greater fraud safety measures than the ones currently provided by traditional local financial institutions.


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Documents Required For Offshore Merchant Account

To continue with the process of forming an offshore merchant account, here are the papers that you would need:

  • A canceled check
  • An authorized, government-issued identification document, like a DL, driver’s license
  • If relevant, 3 months of the latest transaction statements
  • 3 months’ worth of financial records
  • Chargebacks should be less than 2%.
  • An SSN, Social Security Number, and/or an EIN, Employer Identification Number

A safe and fully functional site. In most circumstances, it is acceptable if the site has not yet been released as far as there’s a functioning website in a development platform.

We understand how tough it may be to locate the best OMA. If you’re someone who has run a high-risk company and attempted to get accepted for an overseas or foreign credit card transaction service, odds are you’ve been rejected in the first go.  

Applying For Your Offshore Merchant Account

There is no cost or obligation to apply for an overseas merchant account. However, you must provide an application and register with the necessary paperwork. For an OMA, the minimum monthly transaction should be $50,000. Furthermore, a professional account manager will assist you throughout the application procedure.

Your goal here would be to gain approval as soon as possible and at a lower cost. Furthermore, if you have a decent contrac, your request for an OMA will be approved within 6-8 working days. Furthermore, from this point, the entire registration file is obtained.

Offshore Credit Card Processing - Definition & Importance

A simple way to define an offshore credit card is by knowing that it’s a credit card that’s filed by an overseas financial institution that could be present anywhere in the world, but nowhere in your residential country. Similarly, offshore credit card processing is a kind of merchant account service that’s provided by an overseas firm that lets the consumers take up services and then pay the amount using a credit card. This type of payment is safe and secure.

The role of an OMA is to take forward the transactions that your firm gets from abroad. It rapidly raises your business’s scope to grow with the addition of credit card processing. How? As you can start taking payments from international ends safely. This also helps the customers by letting them pay you easily and you can also accept the payment without facing obstacles.

But why is Offshore Credit Card Processing important? Here are some reasons why:

New technology

It is usually recommended that one should always embrace new technologies and learn to use them along with the present method to offer the best service using both, the old as well as the new payment method.

Seamless experience

The developers of this type of payment method are rigorously working to make things smooth for their users, and also are keeping up with the changing modes of transaction.

Ease of payment

Clients prefer to pay with credit cards, particularly in cafes, shops, and retail outlets that need network operators to accommodate a mode of payment for their consumers. Customers can also make purchases using their credit cards as well as other digital payment methods.

Overseas credit card systems allowed merchants to take electronic payments in many currencies. Because of this payment mode, there is no bother of transaction discrepancies across international borders. It also takes credit cards that aren’t as prevalent or famous, which expands the company’s reach across international borders.

These services must be available online, or over the phone for the companies’ or network operators’ consideration. It is also critical for the business to select a payment platform that offers secure transactions via secured portals and credit card handlers.

Multi-Currency Payment Processing

This type of payment processing is done when a firm takes credit card payments from clients in international currencies. So, if your firm charges clients in multiple currencies, you’re a part of multi-currency processing. It involves a complicated setup of several billing foreign currencies.

For instance, you can charge consumers in CAD, EUR, USD, AUD, NZD, and GBP, which would let you attract consumers in all the main countries with English as their first language.

The benefits of multi-currency payment processing fall into these categories:

  1. Commercial (low price)
  2. Administrative (lessens consumer complaints)
  3. Marketing (increase sales)

Let’s look at the benefits of all three categories, one by one.

Marketing Benefits:

To convert a potential client into an actual paid client one must create trust, eliminate any and all kinds of fears a potential client has, and provide a good reason why should he/she engage with you.

Converting potential clients into sales brings a lot of challenges. Not just on the currency front, but on other challenges as well. But once you overcome those, it’s all worth it in the end.

Administrative Benefit:

Presently there are several administrative challenges, and each of these challenges is separate for every firm. There are several instances where multi-currency processing has proved to be beneficial administratively.

When you have the capability to work in international currencies, you get strategic benefits that are separate for every business. You will have to explore and find out how can these benefits help your business is growing.

Commercial Benefit:

In the commercial field, there are a lot of cost benefits with multi-currency processing. Especially when a firm has applied payment processing with a like-to-like agreement.

It is to be noted that it’s not always easy to attain cost efficiency as a good level of savings needs a well-framed corporate structure. But once that is achieved, your business would be booming with commercial benefits.

Terms & Conditions For Offshore Merchant Accounts

Charges for OMAs differ based on where the acquisition bank is situated. Most offshore banks provide competitive prices, especially to large-volume, high-risk businesses. Settlement timeframes for overseas credit card transactions are determined by the number of transactions processed.

Everyday settlements are available for large businesses, whereas small offshore commercial accounts may collect monthly or a few settlements each week. The exchange rate varies from one country to the next.

For instance, European exchange prices are cheaper than those in the United States, and charges in Europe are comparable to those in the United States.

The OMAs are known to save you cash on transactions when you got clients present in the same location as your acquiring bank. For example, when an OMA is in Europe, your Europe processing will be low in cost when compared to a transaction through a bank in the US.

The main point of consideration for an offshore transaction is card declines. Based on the financial institution, cards are seen as an aid to take forward cross-border processes. This can lead to an increase in the card decline percentage. It all comes down to the laws of the nation where the acquiring bank is situated.


Advantages Of Offshore Merchant Account

Advantages Of Offshore Merchant Account

Here are some of the advantages of opening an offshore merchant account:

Multi-Channel Transactions

It enables you to take online payments through several channels. You can also receive funds via portable apps. Alternatively, you can handle bulk orders using batch submissions.

Increase Your Banking Network

Merger or acquisition financial institutions are located in different areas. Furthermore, overseas merchant accounts reduce transaction risk.

Anti-Fraud Mechanisms

Rules and features that can be customized will assist you in recognizing good bids. And rejecting bad ones. With such features, you’ll be safe from all kinds of fraudulent situations.

International Money Handling

This is the quickest approach to boost sales. Since it accepts over 50 different currencies. It also accepts payments in a variety of currencies.

Payment Mode Certified to PCI-DSS Level 1

It meets or surpasses the most demanding payment processing security standards. Furthermore, Level 1 security will safeguard your company and its consumers.

Options for Recurring Billing

Consumers will find it easier to continue buying with limitless recurring payment schemes.

High-Risk Transaction Experts

Businesses with a high level of risk are encouraged to apply.


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Setting up offshore merchant services gives high-risk business owners a secure means of accepting payments. Additionally, you might benefit from exclusive credit access to safeguard the company’s liquidity. Additionally, there are no volume restrictions on offshore merchant accounts.

If you want to have a seamless and easy process of opening an offshore merchant account, it is advisable to get in touch with our professional experts from OnDemand International, to understand more about the process of setting up an offshore account.


There are several benefits of OMAs. Some of them are, low cost, best for anti-fraud, increase banking network, making it easy to handle foreign currency, etc.

A credit card payment processing has now become the most common mode of payment because of its ease of use, safety, and because of streamlined experience, and offers.

  • You may present pricing in the buyer’s currency.
  • You can also obtain processing payouts in any big international currency.
  • Enhance buyer confidence.
  • Customers prefer to pay in their own money.
  • Retains customers’ attention.

You must present identification documents and other proof of identity in order to open an account with an offshore bank.

In conclusion, keeping money in an offshore bank account is neither unlawful nor exempt from taxes.