E-commerce offshore : How to chose a merchant account provider?
18 November, 2016
Offshore and low tax onshore solutions are very popular among E-commerce based businesses. The steps are as following:
- Choose a low tax jurisdiction for your company;
- Incorporate the entity and open a bank account;
- Open a merchant account.
It not easy to open a bank account and merchant account with favorable rates and conditions for your company, but when they are found and opened they are solid. But how to choose the right merchant account? There are many merchant providers although their offers and rates aren't the same.
Factors to consider when choosing a Merchant account provider
1. Bank or a separate merchant account provider?
Today lot of banks provide merchant accounts for their clients but since they focus more on the money they usually lack of technology therefore they tend to outsource their merchant account services. Contact the merchant account provider directly not through the bank.
2. Fees of the merchant account providers
Fees are going to be a great variable between merchant account providers. They depend on the number of transactions and the amount of sales generated. To obtain the best offer chose the account provider based on the youre-commerce size and the plannedfuture growth, for example, you will chosse different providers if your business is generating 100,000 EUR a year with 10,000 transactions than a if 1 million EUR a year with 100,000 transactions.
3. Processing methonds and their rates
How costumer can purchase and access goods from your store? Transactions will happen through shooping cart at your website, mobile or combination? These also are variables from which the fees can change.
4. Cash flow and processing time
Merchant account provider is a link between your offshore e-commerce business and the bank. The interests is based on the fees they charge after each transaction and they want to receive that interests as soon as the transaction has happened therefore account providers can hold the money from the time when the client's transaction had happened till it reaches bank account, common practice of withdraw is once in 2 weeks. If the cash flow and speed is very important for you business this is the aspect you should consider.
5. Management and your time
Merchant account providers want to make sure that the money you receive are legal and without any risks, therefore the process of the account opening is slow and management can take a lot of time. Since the time is the value for all businesses you should consider choosing a partner who can deal with the merchant account opening and management.
ICD Fiduciaries clients reduce their costs by 50 % by implementing a 0% tax solution for e-commerce and gain time since you don't have to worry about the account management.
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