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Essential to anyone accepting credit card payments, particularly on the Web, Merchant accounts can be expensive. They're not very cost effective to maintain, attracting high set-up fees and deposits as they do. But you can always open an offshore merchant account, it's less expensive and the customer service good. Merchant accounts are accounts that are set up to process credit card transactions. These accounts are places where money you make from taking credit cards is deposited. You can transfer this money to your regular business account, or you can leave it in the account and use the account to purchase business supplies. While it would be nice to think that you could do business without accepting credit cards, the fact is that most people prefer to pay with credit or debit card. Accepting these methods of payment ensure that you will have a broader customer base. When you think of an offshore account, you probably conjure up images of something dark and unlawful. The fact is that off shore merchant accounts in the Caribbean, Latin American and Europe are legal. They offer the same services as their counterparts onshore, but at a cheaper cost. You can realize instant cost savings using offshore merchant accounts. While up-front deposits are a perquisite for all merchant accounts, the offshore ones require smaller deposits up-front. This works to your advantage, freeing up funds to employ in your business. In a merchant account, a certain percentage of the money in the account is kept aside for charge backs in case a customer returns an item and wants his/her money back. Offshore accounts generally reserve a smaller percentage of your money for this purpose than onshore accounts. It is common practice to pay transaction-handling fees as a percentage of the transaction amount. But offshore merchant accounts charge more than on-shore ones. But offshore accounts still work out more cost-effective, due the savings you make in other areas. The biggest reason that many business owners, including small business owners, choose off shore accounts involves the tax benefits. It is possible to claim a portion of the income as foreign income. You still have to pay taxes on it, but the taxes are lower than domestic income. Before using an off shore account for tax benefit, however, be sure to consult your accountant or a tax attorney. You do not want to do something illegal by mistake. With global technology advancing at such a rapid pace, there is no reason why you should limit yourself to what is available on shore. Telecommunications allow you to instantly access your account from anywhere in the world. The Internet allows you to accept credit card payments online any time of the day or night, without you physically present. An off shore merchant account is simply another tool to help 0you maximize your profits.
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Vlad Ehrsam is the chief writer for, and editor of Full Info on Business, there's a wealth of knowledge on the website, plus their free newsletter is well worth signing up for too. This and other unique content business articles are available with free reprint rights.
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