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The Offshore Credit Card Processing Industry: How Does It Look Like Today?

  • January 12, 2022

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Offshore Credit Card Processing Industry

Those times were different when you wanted to pursue the products with all your senses before buying. But with the evolution of online shopping, you trust the reviews and make your purchase based on how the product is advertised. The business industry answered the public demand with enthusiasm that matched the shopping spirit of the customer. That includes offering a seamless online shopping experience and various online payment methods like credit card processing offshore and onshore for the customer's convenience at a global scale. With the onset of offshore credit card processing, businesses could provide their services and products on a global scale without the worry of transactions of currencies. Ever since then, the offshore credit card processing industry has evolved in various ways:

What is offshore credit card processing?

An offshore credit card refers to a credit card issued by an offshore bank that can be located in any part of the world, but it must be outside of your country of residence. In the same context, credit card processing offshore refers to merchant account services offered by an offshore company (that is not the same as the merchant country) that allows the customers to pay for the business/services with a credit card and processes the payment safely and securely.

An offshore merchant account processes the payments that your business acquires from a foreign country. It dynamically increases the scope of your business as with an offshore credit card payment processing; you can accept payments based in foreign currencies safely and securely that benefits the customer to pay with ease and you to accept it without any hassle.

Related: 3 Things To Know About Card Payment Processing

Why is offshore credit card processing necessary to businesses?

It is crucial to adapt to the newly emerging technologies and amend them with the existing processes to provide accessible service using the old and new methods of payments. The offshore credit card payment processors are continuously adapting to the changing methods of transaction and working tirelessly to provide a seamless experience to the merchants and the customers paying.

Customers want to pay using credit cards, especially at the restaurants, supermarkets, and retail establishments that call for the service providers to make arrangements for the diverse methods of payments for the customers. Customers also indulge in the online shopping experience using credit cards and online payment options. Credit card processing offshore benefits businesses to accept payments through credit cards in multiple currencies without the hassle of transaction differences across the international boundaries. It also accepts credit cards that are not so common and well known, which boosts the business across international boundaries.

The businesses or service providers in question must offer credit card payment processing services at the point of service, online or even on the phone. It is equally essential for the merchant to choose a payment processor that provides safe transactions through secured gateways and credit card processors. The global market is waiting: if your business revenue is affected by the limitations of onshore payments, you must apply for a merchant account that offers credit card processing offshore to provide a convenient, secure payment gateway to your customers.

How does the offshore credit card processing industry work today?

When the customer initiates the payment for your product or service with a credit card, it is only the beginning of the background processes that the payment processing company must follow through.

  • Payment authorization: when the customer is paying, they offer the CC details to the merchant's CC terminal or website. These details are forwarded to the store's acquiring bank or payment processor company, the credit card network, and the customer's card issuing bank for authentication.
  • Payment authentication: the bank confirms the security and observes the transaction for any signs of fraud or criminal activity, and only with clear green signals, it confirms the customer's account balance and then approves the transaction. This information is forwarded to the processor and the CC reader.
  • Clearing: at the end of the transaction, the details are sent to the merchant and the cardholder customer in statements. The merchant sends the batch of forms containing transaction details to the acquiring bank, which exchanges confirmations before transferring funds between the banks, credit card networks, and acquiring processors for a smooth flow of funds.

Which business requires offshore credit card processing?

Any business that has high credit card processing fees can benefit from offshoring. Some businesses have reduced their rates from as much as 9% to as low as 1% by choosing a different payment processor. However, it's important to note that offshore credit card processing is not available to all businesses because of the potential for reduced fees and lessened risk.

High-risk businesses come in all shapes and sizes. Still, some of the most common ones are online gambling sites, adult websites, E-commerce stores that sell high-priced items, Businesses that operate in a high-risk industry, like technology or pharmaceuticals.

These businesses can significantly benefit from credit card processing offshore services that accept credit card payments from clients with an offshore bank account in your desired currency. That allows merchants to save on fees associated with the international transfer process since they only need to be paid once by the client rather than twice, and it's also perfect for firms looking to conceal their sales and profits from the government.

Why do high-risk businesses prefer offshore credit card processing?

High-risk transactions carry a higher-than-average chance of chargebacks, disputes, or declines. One of the biggest challenges is to find a high-risk payment processor willing to work with their business for reasonable rates. Due to the higher risk of chargebacks and fraudulent transactions that these businesses tend to experience, it demands that payment processing companies take special precautions when deciding whether to accept high-risk businesses as clients. Payment processors may outright decline a high-risk business as a client if they deem it too risky or charge a higher fee for accepting high-risk businesses.

Offshore credit card processing is often seen as a more viable option for high-risk businesses, as processors in offshore jurisdictions are often more willing to work with these businesses. That is because the risk of chargebacks and fraudulent transactions is lower in offshore jurisdictions than in countries where credit card processors are located.

In addition, offshore credit card processing can be cheaper than onshore processing due to the lower operating costs of the processors offered for the offshore jurisdictions. That can be especially beneficial for high-risk businesses, as onshore credit card processors typically charge them higher rates and fees.


When signing a contract with the payment processing company that delivers offshore credit card processing, confirm the number of currencies they allow the transaction in, the countries they provide service for, and how long before the contract renews. This industry is continuously changing, and to keep on top of your global business, you must keep up with the newest shift of trend.