First of all, it is important to state that getting and even operating a domestic merchant account in the US is not only easier but also less costly than running an offshore merchant account. That said, there are several circumstances where an offshore account would work better than a domestic one.
When faced with the domestic vs. offshore decision, the best thing to do is to assess the advantages and potential pitfalls of each option under the given circumstances.
Offshore might be an option for high risk businesses
The main reason most merchants who choose to go offshore do so is because there might not be many merchant processors within the country willing to accept their businesses. For example, a high risk merchant dealing in guns and firearms might discover that no merchant processor in the USA is willing to open a merchant account for a gun business. If the merchant is resolute on going ahead with the business plan, then the only option might be to get an offshore merchant account.
Some may argue that with the increase in high risk processors in the US, getting a processor for your gun or any other high risk business shouldn’t be a problem. But it’s never so easy, otherwise every high risk merchant would have a reliable processing account by now. The thing is, these processors, eMerchantBroker.com included, have strict requirements that must be met before they can accept your business. For example, most merchants have a minimum threshold of sales volume for any merchant they would consider working with. That limit is usually so high that it excludes every high risk merchant except for the well-established ones. So, although you may think that you deserve a high risk offshore merchant account, you may never qualify for one.
Offshore accounts may also be a viable option for merchants with poor credit scores. When your credit history isn’t impressive enough, not many merchant processing providers in the US might be willing to deal with you. Offshore accounts might therefore be seen as a “way out.”
Remember that as soon as you go offshore, your disputes can only be resolved in the country you choose to do business in. You will need to fully understand the laws of that country or have a subsidiary there. Otherwise, navigating the legal huddles whenever a dispute arises might be very difficult.