Merchant Account Offshore to Protect High-Risk Processing

 Could your business survive in the market if your merchant account was suddenly canceled? What are your backup plans to protect your business against losing high-risk processing capabilities?

Diversification of high-risk processing is a simple strategy that can help you safeguard your business interests. Businesses in high-risk processing categories must establish multiple accounts, including a merchant account offshore, to protect their business operations against fraud or charge-backs. Establishing a merchant account offshore in several jurisdictions is vital for assuring the continuing viability of your business.

There are many instances of businesses losing payment processing accounts. Money that is urgently required for running the business is being held by the processing bank. The bank will hold the money for up to 180 days, as a protective measure against any possible charge-backs. The money will be kept in protection even if the merchant has never had a charge-back in the past dealings.

Without a backup with a merchant account offshore, companies may have no option left but to close their business.

Single High-Risk Processing Account is Dangerous to Merchants

Companies with good payment processing reputations may think that a bank will keep on processing their payments as long as their business account is in good standing. The merchant is surprised and dismayed when the bank suddenly decides to stop high-risk processing.

The most common reason for the cancellation of a merchant processing account is when the account is not managed properly by the merchant. The merchant may have an unusually high number of charge-backs, refunds or consumer dissatisfaction instances. These things force the bank to either cancel the account straightaway or put high-risk processing 

restrictions or reserves on the merchant account. The ability to quickly switch the payment processing to a merchant account offshore is crucial for a business' continued functioning.

Even in the cases when the merchant has no charge-backs, his account may be canceled by the bank. For instance, if a merchant experiences rapid growth in processing volumes he might be notified that his account is going to be canceled by the bank.

Even companies that are not in the high-risk processing category face this problem at times. For instance, common sense indicates that banks would be happy with fast growth as it brings them more business. But in reality, the opposite is true. Businesses that show fast growth can easily find themselves getting classified as high-risk processing account simply because they are expanding too fast. High volumes of processing can often lead to account cancellation or imposition of large reserves.

Businesses frequently get a very little warning when their high-risk processing account is about to be canceled. If a merchant is lucky, the bank will offer him 30-day notice before account cancellation. More commonly, a merchant realizes that his account has been canceled when the settlements stop happening on time. The reality behind this is that the bank is trying to keep as much money as possible from the merchant in anticipation of closing the account.

Another common instance is when the bank suddenly changes the underwriting policies and stops accepting high-risk processing merchant types. A bank might be sold or merged with another financial institution leading to a change in policies. Merchants can be put on notice that processing for their account will stop within 30 days.

Sometimes entire industries are outlawed by the government of a particular country and without a merchant account offshore, a business can go bust.

Merchant Account Offshore Ensure Business Continuity

Do merchants sometimes wonder why they should establish a merchant account offshore when they can get another account in the same country? The answer is as simple as the old adage "Do not put all your eggs in one basket."

With the changing political and economic conditions the world over, a merchant account offshore diversifies the high-risk payment processing. A merchant account offshore is your ace in the hole to make sure that your business is protected all the time.

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