The internet has become a travel partner for many businesses, allowing them to cross international borders to sell goods and services. But while it is now possible for an entrepreneur to sell goods from Chicago to a customer in London, the logistics involved are complex – particularly with regard to payment.
Hence, a means had to be devised to allow payment processing providers to authorize payments in multiple currencies. This is the idea behind international payment processing services, which help businesses in the United States to sell to a global market.
PaymentUSA’s global payment processing solutions offer packages for companies that sell to markets abroad. Our years of practical experience in providing services and international high-risk merchant accounts make us a reliable partner for your company. In this post, we’ll look at what an international merchant account is and whether your company could benefit from using one.
An international merchant account allows businesses to confirm and process payments via the internet in multiple currencies across hundreds of countries. A great example of this is a US-based website selling to a client in the UK who pays in pounds. The company receives payments in dollars after its payment processor has successfully converted the client’s payment.
International merchant accounts are recommended for businesses seeking to go global or that work in an industry that banking institutions consider high-risk. They are also useful for merchants with short commercial credit histories who rely on a reputable service to cover their payment processing structures.
An international merchant account also covers businesses at risk of fraud or chargebacks such as those that sell worldwide, are based on a subscription model, or do not have much cash in the bank.
With an international merchant account, selling items across borders and taking payments in different currencies is easy. These solutions offer more value for your business than you can possibly imagine.
It is common to hear businesses that operate internationally referred to as high-risk. However, there is no framework to determine the factors that make a business “high-risk.” Instead, a payment processor, payment service provider, or bank sets its own guidelines for classifying a company.
Most payment processing firms designate some industries as high-risk, while others accept most application types. You will always be asked to detail precisely the industry your business is in when filing for international merchant services.
Although these businesses are considered high-risk, top platforms like PaymentUSA have been instrumental in helping enterprises process payments across borders. The global e-commerce market is growing rapidly and stood at $4.8 trillion in 2021.
Why do you need online payments solutions?
Most international payment processing services provide a cross-border service that covers payments in different forms. These services also cover the conversion of currencies, saving you the stress of receiving payment in hard currency.
Here are the features you will find with international merchant services:
While transactions are processed in a foreign currency, a good international merchant account automatically converts the payments to USD. There’s no need for manual conversion.
Foreign customers can easily see your price in their own currencies, which helps them to make informed decisions when moving to the checkout section. This is a great way to provide a rich customer experience for your clients.
Business owners with a foreign merchant account do not need to open an offshore bank account. All transactions are automatically converted to dollars and paid directly into your domestic account.
Business owners with a foreign merchant account do not need to open an offshore bank account. All transactions are automatically converted to dollars and paid directly into your domestic account.
For businesses with an international online merchant account, settlement is on a regular schedule. You don’t have to wait long before your bank account is credited, helping to improve your cash flow.
International merchant services include robust customer support. Business and technical help are available at all times. This forms a sound basis for processing transactions and resolving queries faced by your foreign customers.
Payment processing for international transactions should be via the same channels you use for your regular merchant account. A simple transaction process for your customers reduces the stress of using additional tools to process payments, which could also attract charges.
An international merchant account allows customers to get swift payment approvals on your platform. This is yet another way to offer a high-quality customer experience and build loyalty among your client base.
How International Merchant Accounts Differ from Regular Merchant Accounts
A regular merchant account comes with certain privileges for you as a business owner. It serves local payment options, offering you a way to accept payments within the United States. On the other hand, the global payments merchant account caters to a broader customer base, ensuring your business gets the right support for international transactions.
Since a high-risk international merchant account falls into this category, let’s look at how an international merchant account differs from the local option.
A standard merchant account takes minutes to file and is usually approved quickly. With an international merchant account, customers might have to wait days to get a response to their applications. Such international high-risk merchant accounts applications need to be specific in the type of products and services offered. This often includes bank statements, and a personal credit score assessment.
As you might expect, the processing charges for a traditional merchant account are lower than a high-risk international merchant account. Usually, the processing fees for a standard merchant account are charged at 0.3%, including interchange fees. High risk account fees go as high as 1.5% minus the interchange rate.
You should remember that these charges vary from company to company and should form a part of the features you check when searching for an ideal international merchant account for your business.
When a payment processor considers applications for a standard merchant account, it often requires a compulsory cash deposit as a hedge. These cash reserve conditions take different forms that you can choose from:
The payment processing partner sets a percentage (which could be high as 10%) for every transaction completed, which will be credited to your account later. For instance, a contract agreement could span six months from January. By July, the amount will be credited to your business account with the charges deducted.
You agree with the payment processor on a certain percentage to be held back from each completed transaction. This capped reserve will not be updated once a predetermined threshold has been reached, but will remain untouched until it is needed.
You send a determined amount to the payment processor, which becomes a cash reserve. If there is no fund for an upfront reserve, all transactions will be held until the agreed amount is completed.
Because an international merchant account is considered high-risk, there is a volume limit set that can’t be exceeded. Once the cap is reached, your account cannot process further transactions in dollars or other currencies. Most payment processing companies do this in compliance with financial regulations.
Here’s a general look at how payment processors make decisions about foreign merchant accounts.
The application starts with a simple conversation about what the entrepreneur needs. In particular, with understanding what the business offers and the industry it is in. It is a way to classify the type of risk the business carries. Several factors are involved, and the better the business details are known, the better the assistance the payment processor can offer.
A high-risk international merchant account does not rely on a short-term plan. It is generally a long-term partnership. Because payment processors are taking on a significant risk (since there is a chance that merchants may be unable to cover chargebacks), the agreement to be signed must have relevant clauses to protect themselves and you as a partner. Most payment processors use a determined algorithm tool to assess applications and determine the risk.
Diverse payment options like credit and debit cards are increasing in popularity every day, and getting a foreign merchant account is beneficial to your company and you as a business owner.
A significant issue most businesses face is being limited to a local market. This is not because there is no interest from foreign customers, but because of a lack of adequate tools to attend to them.
One of the significant benefits of operating a global merchant account is the absence of hidden fees. Many companies that handle a large number of payments suffer from hidden charges eating into their revenue.
A common cause is that these fees are not revealed until an incoming wire transfer is almost completed. Without clarity about the charges, it’s hard for businesses to know what they will be charged. International merchant accounts help to skip these substantial bank charges or pay a smaller percentage, which helps to reduce the cost of running a business.
Since international merchant services are designed to cater to businesses taking foreign payments, top payment processors and providers like PaymentUSA work hard to reduce the flat fees paid during deposits into your account. Hence, you no longer need to pay to receive monies into your account.
No matter your business’s industry, high risk is expected because of the chances of being conned by cybercriminals posing as clients. Online fraud is a pressing issue that has continued to affect businesses operating in the United States, regardless of the scale of their operations. Issues like unauthorized payments and chargebacks are common and can have harmful effects on your business’s growth.
This is one of the unique abilities that international merchant services tackle with foreign merchant accounts. Many international high-risk merchant accounts come with modern tools that can easily detect and prevent fraud. They go beyond accepting credit and debit card payments and can quickly notice bounced checks and other suspicious activities.
And because reputable international merchant solutions like the one provided by PaymentUSA feature a database, you can easily win cases of chargebacks by fraudulent customers. Most importantly, your company’s credit score and your personal account remain intact.
If you’re looking to expand your business beyond the borders of the United States, an international merchant account with top solutions should be a high priority.
World economic conditions and foreign exchange rates are unstable, especially for high-risk businesses. As a business owner, these common issues will generally be felt more keenly than by the customer.
With an international merchant account from a reputable global payment processing solutions provider, foreign rates are fixed for extended periods and will always be on display. This allows your customers to plan and budget for your product without being caught off-guard by new rates or fluctuating figures.
When your business starts accepting international payments, one of our clients’ crucial concerns is the need to create a local bank account for each foreign currency. The need for such an account is entirely eliminated with an international merchant account, saving you time and money and reducing stress.
The competition for foreign customers is fierce, and getting an edge means providing a streamlined and convenient payment process for your customers. An international online merchant account frees you from complicated processes.
With our international merchant solutions, you can choose from our multiple banking networks that allow you to set up foreign payment methods without needing a local bank account. Your customers pay in their currency, and you receive the funds in dollars or any other currency you prefer, with no need for setting up an additional bank account.
Another compelling reason to consider an international merchant account is the increased level of payments for improved cash flow.
With a global merchant account, customers can easily and quickly pay for goods and services. Different merchant services’ international structures allow you to confirm receipt of payment and send an electronic invoice, so your customer knows the payment went through.
Besides, you don’t want to have to continuously reach out to clients to confirm that payment has been made. Also, your customers will become used to a standard payment method, allowing them to pay quickly.
With an international merchant account, your business gets a strategic advantage over your competitors. For example, reaching new markets that competitors have not exploited gives you an edge to make more profits and stabilize your access to the customer base. Additional exposure to international markets can further expose your business to new trends and ecosystems that can be strategic for your company’s growth.
Doing business on an international scale is one of the best moves you can make to promote your brand’s image. Opportunities like partnerships with other global brands, exposure to trends in marketing campaigns, and contract negotiations are possible when you launch on the foreign scene.
There’s only one way to get such recognition, and it is through having a stable online business environment. Your customers must trust you to have a sound payment system so they can recommend your brand to others.
As we’ve stated, regular merchant accounts can be set up within two working days. However, with international high-risk merchant accounts, the application period takes longer due to the different factors involved.
There are no flat rates since each application is considered individually. Some reasons for this include:
Every international transaction comes with a level of risk which differs based on the industry you’re operating within. Hence, your payment processing provider may have to charge extra to cover this.
The countries that you want to operate in also come with varying risks that affect charges. The high risk of fraud is one of the factors that make doing business more challenging.
Other necessary reasons include the following:
Choosing an international merchant account is an involved process. Before you file an application, here are some of the essential features you should look out for and ask about.
To help improve your chances of finding the best global payments merchant account for your business needs, you need to be clear about your intentions. Here are some ideas for a successful application:
With our international merchant solutions, you can offer your foreign customers the convenience of making payments in their local currency through our international merchant account services. The process is simple, and the PaymentUSA team is an ideal service provider.
Top features that are included in our international merchant services include:
Merchant Application
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