Payment processing is an essential part of the business world that cannot be easily overlooked. In the 21st century, to run smoothly, a business needs to enable E-Commerce and card transaction services. Card payments can create the possibility of opening up your business to the world. If you wish to take your business to a global scale, it is time to look into credit card processing offshore. Not only does it make payment processing exceptionally convenient, but it also creates the opportunity to expand your business. In this article, let us look at how offshore credit card processing works.
What is Payment Processing?
Payment processes and payment gateways are two crucial players that have a role in making payment transactions possible. A payment gateway is primarily a kind of tool. It does the job of security by transferring the encrypted data of debit cards and credit cards. It is responsible for creating a safe connection between the customer and the business.
On the other hand, a payment processor is a service provider that manages the credit card and debit card transactions for a business owner. Payment processes have two categories: front-end processes and backend processes. The former is responsible for maintaining connections with card networks and other transaction services. The Merchant account providers are responsible for providing the card machines and other equipment that a business requires to accept payments. They are also the ones that handle the merchant accounts for their business-owning clients. Backend processes are in charge of the settlement of the transactions. They move the payment from the buyer’s account to the business’s merchant account. Partnering with a payment processing company is not an option unless you plan to depend on card payments.
The Parties Involved in Credit Card Payment Processing
The following parties play a vital role in all types of credit card payment processing:
- Business Owner: The business owner, or the merchant, is the person that will accept the payments.
- Customer: The customer is the payee or the cardholder who initiates a transaction.
- Credit Card Network: The credit card network is the brand that issues the customer’s credit card.
- Acquiring Bank: The acquiring bank belongs to the business owner. This bank is responsible for acquiring and holding the payments issued in favor of the merchant.
- Issuing Bank: The customer’s bank is the issuing bank. They are often a part of the credit card network as well. The role of the issuing bank is to pay the appropriate funds to the merchant’s bank. They are also the ones who cut any card fees and extra charges.
- Payment Processor: The payment processing company is responsible for handling all the transactions made by credit cards. They are the link between banks and card networks and provide customer support.
Then What is Offshore Credit Card Processing?
In Offshore Credit Card processing, a business owner applies for an offshore merchant account. In this type of payment processing, the merchant account is located outside the initial location of the business. Offshore credit card processing makes the process of accepting payments appreciably more convenient. Not only does it allow your business to accept payments from several different card brands, but it also makes it possible to accept and process payment in a plethora of currencies from around the globe.
Offshore Credit Card processing can give a significant lift to the profitability of a business. Moreover, it is a blessing for several high-risk business owners. If you are looking for a merchant account provider, you have a much higher chance of being accepted by an Offshore payment processing company. Offshore credit card processors are certified experts in managing various business types ranging from low-risk to high-risk. Not only that, but they can also offer you access to a significantly larger market along with other advantages like tax benefits.
The Steps of Offshore Credit Card Processing
You can acquire payments from customers from different countries through offshore credit card processing. When a customer likes something on your website, they enter the option of credit card or debit card payment. This starts the procedure of a card payment transaction. Credit card processing follows four distinct steps. They are:
- Payment Initiation
The first step is taken by the customer when the payment is initiated. The customer does this by swiping their card through a machine orienteering the card details on the web portal. - Authorization
The next step follows the procedure of authorization. The merchant account makes an authorization request to the issuing bank. Based on the details entered by the customer, the issuing bank approves or declines the payment transaction. The issuing bank will decline a transaction if it perceives the possibility of fraud or theft. - Settlement
Once the issuing bank gives the transaction the green light, the payment processor conveys the transaction details to the card company. The issuing bank then charges the payee’s account for the payment amount. It then transfers the funds to the merchant bank. - Funding
The merchant bank deposits the received payment into the merchant account for the last step.
Who Needs Offshore Payment Processing Services?
Only some business types feel the need to acquire Offshore credit card payment processing. Although some low-risk businesses often get offshore merchant accounts, it is almost necessary for high-risk businesses. Offshore merchant account providers offer considerable leniency to high-risk business owners. This is the best solution for business owners, even if they think their venture is unconventional. Some other situations where you can benefit from Offshore version accounts are high chargeback rates, poor credit score, inconsistent sales, etc.
- Sites with Adult Content
- Online Dating and Online Gaming Sites
- Online Bets and Gambling
- Plant-Based Supplements
- CBD and Marijuana Industry
- Vapes and E-cigarettes Vendors
- Weapons Retailers
Conclusion
By now, we think you must have gained a better understanding of the world of offshore credit card processing. Credit card processing makes the job of running a business or making payments relatively easy. You can do it all with the help of four simple steps: initiation, authorization, settlement, and funding.
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