Low-Risk Merchant Account for offshore entity

[mickey]

Hello,
I'm looking for a creditcard merchant account for an online shop which is selling gold bars. So I guess it is low-risk.
But the company who is operating the shop is located in an offshore-jurisdiction (like British Virgin Islands, Seychelles, Belize etc.).

Best Regards: Mickey

 

[Alexa QXBC]

Selling Gold Bars - even more then high risky activity, red flag for all banks, under all AML Regulations.

To the clients from what jurisdictions are you planning to sell gold bars?

 

[mickey]

Selling Gold Bars - even more then high risky activity, red flag for all banks, under all AML Regulations.

Very strange, in numerous countries selling gold bars is not even regulated. If regulated there is mostly a value limit (like 2000 Euro in Germany) for purchases. Of course you can buy more, when you go through a KYC-process. On airports or larger railway stations you can buy gold in vending machines.
The shop is selling Goldbars for almost 10 years now, so there is not that much to plan any more. A CC merchant-account would be just another payment method.

 

[Sols]

Selling gold is definitely considered high risk for payments processing.

 

[mickey]

As everybody can see on the photo, the vending machine seems to accept Visa and Mastercard. As High risk processing could costs easily more than 10% (+ rolling reserve), selling Gold with CCs wouldn't be profitable, so the vending-machine-company must have a Low-Risk contract.

 

[Sols]

Card not present (CNP) is very different from card present (POS, point of sale), especially when it's an EMV/chip-and-PIN setup like the pictured example. CNP has a plethora of risks not seen with POS.

Go ahead and apply with Stripe and Braintree, see what they say. Chances are they won't even touch you if you show up with a non-offshore company, but you've opted to limit your options even more by going for an offshore company.

High-risk doesn't have to cost 10%. While high-risk does tend to cost a little bit extra, it's not always just a matter of jacking up the prices and calling it a day. The acquirer needs to understand the business and trust you. If you present a trustworthy, safe business case with good volume, you can probably get away with under 5% for a business like this even as an offshore company. It's all about volume, trust, and regulatory compliance.

 

[mickey]

Card not present (CNP) is very different from card present (POS, point of sale), especially when it's an EMV/chip-and-PIN setup like the pictured example. CNP has a plethora of risks not seen with POS.

Ah I see CNP => higher chargeback-rates. Well 3D-Secure came out 10 years ago to eliminate chargebacks, right? But it does not seems to work flawlessly.

 

[Sols]

3D Secure doesn't eliminate chargebacks. All it does is shift the liability from the merchant to the issuer. The chargebacks still count against your chargeback ratio as a merchant, and if you exceed the thresholds the same penalties are incurred.

 

[JohnLocke]

It is more complicated to make a chargeback with a 3D secure transaction compared to a regular one without 3D secure, or am I wrong?

I remember back in time, may be 10 years or more, they claim that you could not make any chargebacks with 3DS and that was the beauty of all of it, is that wrong?

 

[Sols]

It is more complicated to make a chargeback with a 3D secure transaction compared to a regular one without 3D secure, or am I wrong?

Because 3D Secure shifts the liability to the issuer (your bank), they sometimes put up more of a fight since they don't want to give you your money. The issuer is basically paying out of pocket. But Visa and Mastercard rules (and consumer protection laws) are in your favor so it shouldn't be an issue.

I remember back in time, may be 10 years or more, they claim that you could not make any chargebacks with 3DS and that was the beauty of all of it, is that wrong?

What it does is take away some of the potential chargeback reasons. For example, it's very hard to file a chargeback for a 3DS transaction and claim it was unauthorised use. But you can still file a chargeback for non-delivery of products/services, defective goods, and so on.

 

[JohnLocke]

defective goods, and so on.

according to my bank and the few times I tried to make a chargeback because of exact this reason then it is a issue between me and the shop and the bank will not expedite a chargeback or dispute.

Anyway, thank you for updating with your knowledge on 3DS.

 

[AMD]

If you are still around OP, mind to share what you found?