Why Your Low-Risk Business That Trades Cross-Border is Considered High Risk 

With the expansion of globalization in the contemporary world, companies of all sizes stretch into every conceivable pocket of the world. Cross-border transactions undoubtedly hold tremendous potential; however, for a significant proportion of low-risk businesses, their activities are flagged as high risk by financial institutions. Such a classification often becomes a challenge when they seek out an e-commerce merchant account for payment processing.

This blog will explore the reasons why this is categorized that way, and how Offshore Gateways can help secure a merchant account for your business.

Understanding Merchant Account Risk Categorization

Since a merchant account essentially allows businesses to process credit and debit card payments, there is an added need for e-commerce payment processing. Although financial institutions consider the risk involved in processing the payment prior to opening an account, businesses operating with cross-border transactions do face problems with:

1. Regulatory and Compliance Concerns

Payment service providers face many different local regulations across various countries. It isn’t until businesses engage in cross-border, low-risk transactions that regulatory variation often causes complexity and ‘perceived’ risk.

2. Chargebacks and Refunds  

Cross-border payments may be more prone to dispute because of currency conversions, delayed deliveries, or miscommunications. High chargeback rates, even if unintentional, may negatively brand your business as high risk.

3. Fraud Prevention  

Whether big or small, e-commerce firms stand a great risk of being cheated while undertaking their international business. The service providers demean the businesses as high-risk in a bid to reduce their losses.

Low-Risk Merchant Accounts: Why They’re Classified as High Risk  

Some reasons why your business is still on the high-risk book include the following:

1. Cross-Border Transactions  

It makes cross-border transactions seem very expensive since payment processors vary with regards to their standards for paying, currencies, and fraud detection, meaning your business is most likely bound to be classified as high risk.

2. Industry-Specific Risk

Examples of higher-risk businesses include subscription-based services or digital goods: whatever the operational integrity of that business may be, to secure a merchant account in this regard, it will be more difficult for your online business.

3. Lack of Financial History 

High-risk classification, due to very few transactional records, may be assigned to start-ups or a firm because the providers can’t tell much about its stability and reliability.

4. Jurisdictional Concerns 

Your business could easily be classified as high-risk by payment processors by countries that have more relaxed financial regulations because the need to protect their operations must be fulfilled.

The Impact on E-Commerce Payment Processing  

Getting labeled as high risk can dramatically affect your e-commerce business. Some frequent problems include:

• Higher Fees: The accounts for high-risk merchants charge relatively higher transaction fees and opening charges.  
• Limited Provider Options: Not all payment processors service high-risk businesses.  
• Delayed Settlements: Cross-border transactions may face additional scrutiny, delaying fund settlements.  

How Offshore Gateways Can Help Your Business 

Specialized in supporting businesses classified under high-risk at Offshore Gateways, we will guide you through the management of business offers that have low-risk cross-border transactions, or an e-commerce store on a lookout for a reliable payment solution.

1. Expertise in Cross-Border Transactions 

We understand the problem in globalization and offer products to make your payment processes smooth and easier.

2. High-Risk Merchant Account Setup  

Our company works along with established financial institutes to obtain a merchant account for your company, ensuring compliance and minimizing the risks.

3. Fraud Prevention Tools  

We build advanced fraud detection and prevention measures to keep your business and customer trust safe.

4. Transparent Pricing 

Offshore Gateways has transparent pricing for payment processing without any concealed fees.

Why Partner with OffshoreGateways? 

Here’s why OffshoreGateways is the ideal partner for your business:  

• Customized Solutions: Our company studies your individual needs and provides suitably customized solutions to tackle your problems.  
• Global Network: We work with global banks and payment service providers to ensure easy cross-border transactions.  
• End-to-End Support: They are available throughout the accounts, from setup to current management.  
• ORM Integration: Apart from processing your payments, we integrate ORM to ensure that the reputation of your brand is protected.  

Steps to Secure Your Merchant Account with OffshoreGateways 

1. Consultation:- Customer should arrange a call to discuss his/her business model and payment needs with our team.  

2. Documentation:- Carry all essential documents to support the case, for example, financial statements, compliance certificates, etc.  

3. Application Submission:- We contact the payment providers and submit your applications and negotiate favorable terms.  

4. Account Approval:- We install the payment gateway in your website’s e-commerce platform after approval for smooth transactions.  

Conclusion  

Though it may be a bad blow to have your business categorized as high risk, let this setback not discourage you from expanding. OffshoreGateways is aware of the fact that businesses such as yours require help in driving over-transactions across borders for you to succeed.

If your low-risk business is facing challenges securing a merchant account for e-commerce payment processing, contact Offshore Gateways today. Let us turn your payment challenges into opportunities for growth.

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