Foreign Transaction Fee - Credit Cards

[Vax]

Hi guys,

I am new here and have been through quite a few posts in this forum but have been unable to find answers to some specific queries I have.

I am planning to incorporate a company, however am weighing the pros and cons of doing so in the UK, Ireland or BVI. To give you a bit of background I will be selling to UK customers mostly to begin with and thereafter rest of Europe hopefully. My questions are in relation to UK card processing:

Foreign Transaction Fee
1. If I were to incorporate a company in Ireland or BVI and apply for a merchant account in the same region, would my customers from the UK that pay by VISA or MasterCard be charged a foreign transaction fee?
Ideally, I would like to avoid such charges to my customers as it is unpleasant seeing that on your bank statement. Are there any ways to bypass the foreign transaction fee issue?


Domestic vs Non-Domestic Cards
2. Are all debit/credit cards issued by UK banks treated as domestic cards by Banks/Merchant Account providers in BVI or other British Overseas Territories and Crown Dependancies?


Setting up Merchant Facility in UK
3. Would UK Banks/ Merchant Account providers consider opening a merchant account for an offshore company that is based in BVI, Ireland or any other foreign jurisdiction?

4. Would UK banks/ Merchant Account providers consider settlement into a foreign bank account or is a UK bank account mandatory for settlement purposes?

5. I imagine there would be some tax implications and reporting obligations, if I were to receive daily payment settlements into a UK bank account?


I would really appreciate input from anyone who has experience in the card processing industry or otherwise and has knowledge of the above.


Thanks a ton for your time

 

[negon]

3. Would UK Banks/ Merchant Account providers consider opening a merchant account for an offshore company that is based in BVI, Ireland or any other foreign jurisdiction?

BVI and Ireland is not a problem for most European merchant account providers (MAP)! It will be your entire business they will look at in the approval process.

4. Would UK banks/ Merchant Account providers consider settlement into a foreign bank account or is a UK bank account mandatory for settlement purposes?

For the processors I know there is no problem for them to settle the money to any account / bank you want.

5. I imagine there would be some tax implications and reporting obligations, if I were to receive daily payment settlements into a UK bank account?

Forget about the UK if you want to avoid reporting, accounting all this!

Btw. what business are you into?

 

[Vax]

Thanks a ton for your speedy reply auric, it's great to learn the info you've provided. I am planning to setup a consulting business and after reading the posts and articles in this forum and few others, decided going offshore might be a good long term strategy.


Seeing as you are an experienced member here, would you have any idea who might be able to help with questions 1 and 2?

 

[JohnLocke]

1. If I were to incorporate a company in Ireland or BVI and apply for a merchant account in the same region, would my customers from the UK that pay by VISA or MasterCard be charged a foreign transaction fee?
Ideally, I would like to avoid such charges to my customers as it is unpleasant seeing that on your bank statement. Are there any ways to bypass the foreign transaction fee issue?

Welcome aboard

It will depend on the credit card processor of your choice more like where the company is registered! For instant if you find a payment processor MAP in the UK they will charge them as local cards while if you for instant find a MAP in Germany they will charge them as foreign cards.

2. Are all debit/credit cards issued by UK banks treated as domestic cards by Banks/Merchant Account providers in BVI or other British Overseas Territories and Crown Dependancies?

It is the same as answer 2

Most often you would like to go with RBS WorldPay or some of the many MAPs in the UK once the company has been registered.

Take into consideration that it is important that you stick in a company registration in Europe or islands recognized by the European MAPS i.e. BVI, Malta, Cyprus etc. otherwise you will get troubles to apply for a European merchant account.

 

[Vax]

Welcome aboard

It will depend on the credit card processor of your choice more like where the company is registered! For instant if you find a payment processor MAP in the UK they will charge them as local cards while if you for instant find a MAP in Germany they will charge them as foreign cards.

It is the same as answer 2

Most often you would like to go with RBS WorldPay or some of the many MAPs in the UK once the company has been registered.

Take into consideration that it is important that you stick in a company registration in Europe or islands recognized by the European MAPS i.e. BVI, Malta, Cyprus etc. otherwise you will get troubles to apply for a European merchant account.

Hi Admin,

Nice to be onboard

Thanks for all the info you've provided, it's really helpful to find these answers instantly.

I understand the approval criteria for merchant accounts are based on multiple factors like type of business, monthly revenue, etc but how much of a positive or negative is it having the company registered in BVI?

Are you aware of any cases wherein a merchant registered in BVI has successfully opened a merchant account with a UK Bank?

 

[negon]

You can find hundred of BVI companies that actually has a merchant account! There is nothing negative to say about it and it is part of Europe!

 

[Vax]

You can find hundred of BVI companies that actually has a merchant account! There is nothing negative to say about it and it is part of Europe!

Thanks again for your help Auric, that's really great to know

 

[JohnLocke]

It is actually not a problem to get a merchant account for a BVI company! it has been done the last 15 years!