Thursday, June 21, 2012

Can I open a US merchant account if I live abroad?

In order to open a US-based small business merchant account, your company has to have legal presence in the United States. You don't have to live in the States but your business has to have at least a subsidiary, that is incorporated in any one of 50 the states. You will also need a physical address and a domestic bank account into which your funds will be deposited.

So as you see, if a foreign business wants to open a merchant services credit card processing account in the US, it will have to be prepared to invest a certain amount to cover the legal and procedural expenses. It also will need a locally-based officer to represent the company before the US authorities.

Clearly, it is a good idea that a foreign business should consider all available credit card payment processing options before deciding to open a US merchant account. Other possibilities are a third party credit card merchant processor, such as PayPal, and an offshore credit card processing account. Both alternatives have their advantages and disadvantages and may be suitable under certain conditions.

Third party processors offer credit card processing service accounts that are easy to establish and maintain. If your card volumes are going to be low, this is probably your best choice. The processing rates that these accounts offer, however, are substantially higher than a direct merchant account's. After the break-even point, the cost of establishing a domestic account will be offset by the savings that will come with the lower credit card processing rates.

Offshore credit card processing companies provide the convenience of a direct merchant account processing solution, without the hassle of dealing with the US legal and procedural requirements. The downside, however is a substantial rate premium that you will be charged, much bigger than the premium, charged by third-party processors. Processing rates, charged by offshore companies, are more than twice higher than the ones that domestic processors charge.

UniBul can help you set up a merchant account in the U.S.

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