Offshore merchant accounts are different than high risk merchant accounts. The rates are typically %2-%4 higher than what you can get in the states. The main reason is overseas banks aren’t as competitive as they are in the U.S. Just because a company is offshore doesn’t mean they should pay sky high fees and rates though. It all boils down to the company, the product, and the monthly volume. All these factors determine what kind of bargaining power you have to get low rates. Also things like where a company is incorporated, it’s processing history, and chargeback rate will remain a factor.

Offshore business owners shopping for a merchant account should always consult with a merchant account executive underwriter and not just a simple agent who works for one bank. These are agents who work with dozens of banks and have a much broader knowledge of the International processing market. Also, for offshore merchants there are ways to get the rock bottom U.S. rates as well. The main criteria for this is that you sell to U.S. customers and have a low chargeback rate (all mainstream processors require that).

Getting a favorable rate on an offshore merchant account is like anything else negotiated in the business world. If you have high volume (a few hubdred thousand a month or better), low chargebacks (less than %2), the product is considered mainstream, and you have things like incorporation and a good processing history, it all works in your favor.

There is one thing most people don’t know about offshore merchant accounts though. Simply going to a bank yourself will never get the lowest rates. You might think it would, but the banks themselves don’t compete very much with retail customers. They know the average customer walking in the door doesn’t know how low they can go, and they don’t typically know which bank offers the best deal for their type of business. It’s like going in for a loan, you’ll get thier set rate, compared to shopping around like at Lending Tree to get the best one. This is what a merchant account underwriter does on your behalf. Also, when a bank gets approached by an underwriter, they know that person knows a lot of banks and is shopping around, so they waive fees and lower rates to get the business.

The final piece to the puzzle of low offshore merchant account rates is the underwriter themself. I recommend MST (800-715-8053) because of thie ethics and that they know more about international merchant banking than anyone I know.You could end up spending a fortune on merchant fees if you don’t find an underwriter who’s not greedy, and really on your side.