Offshore vs Onshore
Our processing partners are based in the United States and around the globe. These relationships allow us to offer a wide array of processing opportunities for our customers to ensure we find the right program to place you and your business in.
Every merchant has a different history,
a different need, and a different style,
so we have created Parallel Solutions
to be able to find the most appropriate
answer for each and every one of our
merchants. Our Parallel Solution offers
the greatest flexibility and security
for your business, anywhere.
By creating concurrent accounts, both onshore and offshore, we provide you with the best insurance policy you can have. No matter what happens your credit card processing program will continue uninterrupted.
What is the difference between Onshore and Offshore?
Onshore processing accounts are facilitated by United States based processors and are therefore beholden to United States banking rules and laws for underwriting new accounts and determining risk. One of the most difficult rules for an onshore merchant to follow is the 1% chargeback rule. In the simplest of terms, if a merchant's account has more than 1% chargebacks in any month then it is subject to closure and all funds are to be held for 270 days.
Offshore providers are foreign firms
specializing in credit card processing.
These entities are not bound by the
statutes of the United States. The
main advantage for a US based company
to process their transactions offshore
is that the chargeback threshold may
be higher, up to 2% in some jurisdictions.
This is one of many advantages of processing
offshore. Overall, there is a general
sense that International banking institutions
loosen up their constraints to the
more liberal international rules of
commerce, rules which should allow
you to operate your business legally
and securely within the parameters
of the credit card companies' terms
of service.
Why would I need both? Simply put: Security.
Many merchants operate on the fringe
of what credit card companies consider
appropriate, and as the political climate
is ever changing, so are the constraints
under which legislation may place you
on either side of that line. As a high
risk merchant processing through a United
States based processor, your threshold
for chargebacks and other no-no's in
the processing world will be much lower,
you'll be held to a higher standard than
other merchants, and kept on a shorter
leash. By having an offshore merchant
account to backup your onshore account,
you can ensure there will not be a lapse
in business, as your processing will
not falter if your onshore processor
shuts you down unexpectedly. Additionally,
there will be instances that it will
be beneficial to process through your
offshore account vs. your onshore account,
whether that be due to processing caps,
higher tickets with chargeback issues,
or a multitude of other reasons.
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