Overseas credit card processing

Our guide to foreign merchant accounts

Overseas merchant accounts

Some UK based merchants choose to use overseas merchant services, taking their accounts ‘offshore.’ The reasons for doing so are as follows:

Potential tax advantages

Accept high risk merchants, when declined in other countries

Processing fees can be lower in alternative countries

What are foreign merchant accounts?

An overseas merchant account is registered outside of the UK, however can still provide card processing for companies located here with a UK business bank account. The transaction is dealt with by the foreign merchant account provider or acquiring bank, however settled in the business bank account here. Some companies choose to open a bank account in the same country as their overseas merchant account but this can be tricky and may not have the same benefits as UK business banking.

Overseas merchant account tax benefits

As previously mentioned there are three main benefits to opening an overseas merchant account, let’s look at them more closely;

Tax benefits of offshore merchant accounts

Let’s be clear about this, setting up a foreign merchant account alone will not incur any direct tax benefits as the transactions will be settled in a UK business bank account and tax paid accordingly. However, incorporating the business in the same jurisdiction as the offshore account provider can prove to be profitable in saving tax payments. For example, in comparison here in the UK 15% of trading and other income is due to HMRC compared to just 1% in Malta.


High risk overseas merchant accounts

Some high-risk businesses find it rather difficult to obtain a merchant account here due to UK account provider rules and regulations, resulting in declined applications or terminated contracts. Overseas credit card processing providers tend to be less restrictive, so some companies declined by UK merchant account providers can be accepted elsewhere in the world.


Cheaper overseas merchant account fees

This applies for companies selling internationally or outside of the country they were incorporated.  Transactions being processed outside of the UK will be charged at international rates, therefore it might be worthwhile opening a foreign merchant account in that country so that the transactions will then be charged as a local payment, at a lower rate.

How much does offshore processing cost?

Some might be surprised to read that an overseas merchant accounts aren’t as expensive as you first think. Especially if, for high risk businesses, it’s the difference between remaining in business or not! Rates start from as little as 3% speak to our advisors to find out more.


How Merchant Advice Service works

Industry experts help with everything overseas, from US merchant accounts for foreign businesses to secure payment gateways for offshore merchant accounts. Our advisors work with you to discuss your requirements and aid you in choosing the best overseas merchant account for your business now and in the future.


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