Why Should You Get an International Merchant Account?

Running your own business can be difficult enough when trying to work out all of the kinks in the business itself, you shouldn't have to be frustrated with the process of setting up a merchant account as well. If you are not familiar with the term merchant account, it is an account that is set up by you, the merchant in order to receive credit card payments from customers. In order to obtain a merchant account you need to find a merchant service provider who is bank or financial institution that processes the credit card transactions for you. In a time that people rarely used cash and rely heavily on credit cards a merchant account is almost vital for the survival of any business. Many business that conduct their business solely over the internet needs to have a merchant account set up in order to process any payments. Other business such as travel, mail order, telephone order, or ecommerce also find themselves processing a high number of credit card transactions on a regular basis.

Unfortunately this also leads to higher risks for both the merchant and the merchant service provider. This makes it much more difficult to be approved for the merchant account you need in order to conduct your business effectively. Plus when you add the factor that many businesses are being conducted internationally, business need to open an international merchant account in order for their business to reap any type of profit. When you conduct your business throughout the world you have to find a way to accept all types of currencies. This is where an international merchant account comes into play. When you open an international merchant account you will be able to take payments in different types of currency without the hassle of high currency conversion rates. This makes doing business with you more favorable for the customer and help them save money. By opening an international merchant account you and your customer can reap the benefits which help your business grow in leaps and bounds.

An international merchant account is desirable for many reasons to business owners. First, they offer the convenience of accepting multiple types of currency without high conversion rates. They also allow you to process high volumes without any restrictions; this is not always possible with domestic accounts. This type of merchant account is a great option for businesses that fall into the low to medium risk category. If you are a high risk business it is still possible to obtain an international merchant account, but it might not be as simple of a task. It's important to do the necessary research in order to set up an international merchant account. Merchant accounts are available in the USA, Caribbean, Panama, St. Kitts, Middle East, Germany, Switzerland, Europe, Australia and South Africa. Before setting up an international merchant account you need to communicate with your merchant service provider and understand and take care of any requirements that need to be completed prior to being able to utilize your international merchant account.


About the Author: Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is an electronic payments company as well as an eCommerce and Internet merchant account provider. Merchant accounts make it possible for businesses to provide online credit card processing. For more information on credit card processing visit www.stradafee.com.

Offshore Merchant Account For High Sales Volume

You would think that experiencing continual growth in your business would be a great thing. You might also rationalize that your U.S. merchant service provider would be thrilled with the high volume of business you are generating. Unfortunately, the reality might be quite the opposite. Businesses that find themselves experiencing high volume and fast growth might actually have trouble keeping their U.S. merchant account. If you find yourself in this circumstance it might be time to change the type of merchant account you have to an offshore merchant account. An offshore merchant account is a lot like having a U.S. merchant account, but your credit card transactions are processed out of the United States.

With so much business being conducted over the internet it is crucial to be able to accept credit card payments. Not only is it important to accept credit cards, but all types of credit cards such as Visa®, MasterCard®, American Express®, and Discover®. By accepting a broad range of payments you are making your services more convenient to your customers which in turn will help you business grow. With an offshore merchant account you will be able to accept major credit card with an account to fit your needs, whatever they may be.

You might wonder about the benefits of an offshore merchant account for your credit card processing needs as opposed to other types of merchant account. With an offshore merchant account there is no monthly processing volume limit which benefits your business directly by opening up your business opportunities dramatically. For you, this means no more fear of having your merchant account terminated because your business is doing great. You can increase your sales and expand your market. With an offshore merchant account you are also offered recurring billing, and the option of a multi-currency merchant account. This will also help you develop your business by allowing you to accept currencies from all over the world. This makes doing business for you and your customer more convenient and appealing.

With an offshore account a variety of merchant types are accepted, it is not as restrictive when applying for a merchant account. You are not penalized for high volume accounts, off shore merchant accounts welcome the opportunity to provide you with a means to process credit card transactions. They offer a variety of services such as accepting credit card for phone orders. They also provide XML API interface or a hosted order page, and administration merchant web interface and immediate integration with your website. Offshore merchant accounts offer reporting and password tools that allows merchants to keep informed about their account. It doesn't matter where you conduct business; every country is able to apply for an offshore account for all of their business needs. Face it, the use of credit cards is only increasing around the world, no one wishes to carry large amount of cash on them. Accepting credit card payments is essential to gaining business from prospective customers, in order to process those credit card payments you will need a merchant account to do so. On offshore merchant account is a great tool for any business.

About the Author: Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is an electronic payments company as well as an eCommerce and Internet merchant account provider. Merchant accounts make it possible for businesses to provide online credit card processing. For more information on credit card processing visit www.stradafee.com.

High Risk Merchant Account For Your New Business

Have you just started your business and while attempting to set up a merchant account been told that your business is considered high risk at that there might be complications in setting up a high risk merchant account for your business? If you are not familiar with the term, this might lead you to wonder what exactly a high risk merchant account is. High risk businesses require a specific credit card processing called high risk credit card processing. This is when there is a high risk when processing transactions. In a low risk environment the processing of a credit card uses a certain type of encryptions to make sure that everything is secure with the credit card. Unfortunately the system can be taken advantage by merchant providers to access decrypted credit card information.

Does this mean that you aren't able to open up a merchant account? No, this is where high risk merchant accounts are used. The process isn't as simple as a regular merchant account, but can be accomplished. In order to set up a high risk merchant account you will need to provide certain information such as how long you have been conducting business, any other merchant accounts you have ever had, and your credit history. This information is reviewed in order to determine that you understand how your business works. Owning your own business means that you need to understand the potential risks involved and have to be able to prevent circumstances such as fraud and irresponsible use of credit.

Does it matter if your business is domestic or international? High risk merchant accounts can be set up both domestically and internationally. There is a difference in the process for each though. When setting up a domestic account in the United States the process is usually faster and may cost less to have set up. When setting up an international high risk merchant account certain steps need to be taken before hand. Businesses operating in Europe, the Caribbean, Canada, Asia, the Middle East, Panama, Romania, and the UK are eligible, but the process can take longer. First you must take the steps to form an offshore corporation in the bank and gain approval of a processing agreement, rates, and reserves as well as any other details required. You should conduct the proper research before in order to reduce any complications.

If you are one of the many businesses who have been able to take advantage of the accessibility that the internet has to offer you might fall into the high risk category due to fast growth, bad credit, types of products sold, or large volume. Other businesses that fall into the high risk category are Digital Media, Travel, Software Sales, Furniture, Online Pharmacies, Gaming, and a variety of other business ventures. Don't be discouraged though, it is possible to get the merchant account you need when you qualify for a high risk merchant account. Credit card processing is important and vital to any business, especially businesses that provide their services online, get a high risk merchant account that will provide you with all your business needs.

About the Author: Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is an electronic payments company as well as an eCommerce and Internet merchant account provider. Merchant accounts make it possible for businesses to provide online credit card processing. For more information on credit card processing visit www.stradafee.com.

Merchant Accounts For Credit Card Processing

It's a fact that customers rely on business to accept all forms of payment. Nothing is more irritating for a customer than to have a shopping cart full of one type of product or another and getting up to the register to pay only to find out that they didn't bring enough cash. No problem, they can just use a credit card, right? Unfortunately the sales clerk informs them that they don't accept that certain type of credit card, or any credit cards for that matter because the business doesn't have a merchant account. The customer is then faced with the fact that they just wasted an extreme amount of time in that store and has to leave without anything they shopped for. It is reasonable to assume that it's highly unlikely that the customer will ever return to that store for any future purchases. Circumstances such as this can impact a business in terms of growth and profit. The same scenario can just as easily occur with online businesses that don't offer their customers a wide variety of payment options.

Consumers rely heavily on the use of their credit cards and since there more than one type of credit card, businesses need to be able to accept all major forms of credit card payment. In order to accept credit card payments a business needs to open a merchant account of some kind in order to process their credit card transactions. The key is finding the right type of merchant service provider that meets all of your business needs. Many merchant service providers give merchants the options of different type of merchant accounts. There are domestic and international merchant account, offshore merchant accounts, and high risk merchant accounts. No matter what type of account you choose or your business can qualify for, it's important to obtain a merchant account in order for your business to grow.

Each type of account has something that might appeal to different types of business. When looking for merchant account you should find one that accepts all major credit cards such as Visa®, MasterCard®, American Express®, and Discover®. This allows customer to choose how they wish to pay and opens sales opportunity for your business. Another aspect to look for in a merchant account is a provider that lets you have online access to your merchant account 24/7. This allows you to keep informed about what is going on with your business whenever it is convenient for you. Constant customer support is also a key element when opening a merchant account. Your business is important and if there are any issues with credit card processing for your business, you need to be able to get help as soon as possible.

Even if you have less than perfect credit, it is still possible to get a merchant account for your business. If you find the right merchant service provider, they understand that life happens and that having a merchant account is necessary for your business. Another important aspect of a great merchant account is the ability to have your money deposited quickly into your account. All of this is possible when you open a merchant account for your credit card transaction needs.


About the Author: Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is an electronic payments company as well as an eCommerce and Internet merchant account provider. Merchant accounts make it possible for businesses to provide online credit card processing. For more information on credit card processing visit www.stradafee.com.

Credit Card Processing For Your Online Business

What do you need to open an online business? Once you have established the product or service you will be marketing for your online business you are going to need a way to accept payments. Part of the beauty of conducting business online is that payments can be made online also with the use of credit cards. This aspect of purchasing services or goods online is something that draws many customers to this means of shopping versus having to drive around town. Also it's more convenient in the aspect that customer can shop all through businesses all over the world from the comfort of their home. This fact is great for any online businesses, but also means that they will need some sort of merchant account in order to accept credit card payments.

Merchant accounts are provided by various merchant service providers who are banks that offer credit card processing to merchants. Since there are multitudes of different businesses who offer services online and in person, there are a variety of different merchant accounts available. For those that conduct the majority of their business online, an offshore merchant account might be the ideal way to go. This is largely because of the benefits that an offshore merchant account offers business who have high volumes and fast business growth.

So how do you find out what type of merchant account you need to apply for? First you need to find a good merchant service provider that offers a variety of accounts. Talk to merchant services in order to explore the different types of account offered. It might end up that your business in considered a high risk business and you might not qualify for traditional merchant accounts. Even if this is the case you can still obtain a high risk merchant account. The main difference is that considerations are taken such as how long you have been doing business, credit scores, and any previous merchant account you might have had in the past.
It might be that a domestic or international merchant account is best suited to your business needs. Domestic accounts are great for business conducted within the United States. In most cases a domestic account can be less expensive and easier to obtain. In the instance that you do business international, you will need to be able to accept all forms of currency. For this an international merchant account is more ideal for your business needs. Each business has different needs and accounts are set up to meet those needs.

No matter what type of account you choose or qualify for, it is essential to your business that you possess a merchant account that will allow you to process credit card transactions with ease. 24/7 customer service is just as important as 24/7 online access to your merchant account. Both allow you to conduct your business with ease and stay informed about your merchant account. You should find a merchant account that accepts all major credit cards, it's important that your merchant account allows your business to grow.

About the Author: Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is an electronic payments company as well as an eCommerce and Internet merchant account provider. Merchant accounts make it possible for businesses to provide online credit card processing. For more information on credit card processing visit www.stradafee.com.

Common Terms Associated With Merchant Accounts

Some of the worst decisions we make for our businesses are the ones that we make out of desperation and in haste. We often make these because we find out when it is too late or need a product or service as a stop gap measure. Most times, the daily business of your business consumes so much time that doing the proper research to educate yourself on really important issues just doesn’t happen. As a merchant, your funds’ transactions are the lifeblood of your day to day business and more. Your merchant account may be an overlooked area where your business loses money, unnecessarily. Here are some things we think you should know about your merchant account and merchant service provider.

Let’s start with the easy stuff, so we can build on that for later. The most important and never out of sight fee that merchants incur is the Discount Rate. The Discount is charge that you, the merchant pays on each transaction. It’s a percentage of the total ticket amount. These rates vary depending on what kind of business you are and how you process your credit card transactions. If you’re processing cards as a Card Not Present vendor, then that means that your customers are not present to swipe and sign their receipts when they purchase items or services that day. Chances are that you’re Discount Rate is a little higher than other vendors that are Card Present Vendors; where their customers are there to swipe and sign their receipts. Rates depend on a number of things from business longevity, personal credit or backing, funds’ security and the type of business that you operate. These are risks that banks take on you, the vendor. While a Card Present Transaction is pretty safe, in that there’s less of a chance of fraud, theft or a chargeback; and yes, these merchants get better rates, the other half is losing out lately and here’s why. As businesses have been losing customers to online vendors and, more importantly international online vendors; local business owners are closing the doors, launching websites or both to compete with this trend. I guess, at the end of the day, this is great for banks, as they can charge higher rates for. Which now happens to be quite an acceptable risk for the right price.

Every day, you’re going to tab how much you made…or lost sometimes and that’s an exciting time. If you currently take cards, go to the next paragraph, if not, continue to read. So how do you turn all those transactions to zeros in your bank account? You need to batch. Batching is just summing all of the days’ electronic payments transactions and sending them to the bank for settlement. It’s that easy, and from there account information is justified and within a couple days, you are wired the money for that day’s business.

Two very similar, but very different terms in merchant service processing are Terminals and Virtual terminals. This is how the information is compiled for batching; Terminals or card swipers are small computers that read cards to transfer and compile information for monetary exchange. Virtual Terminals are a little different and are becoming more mainstream. As with ecommerce becoming more mainstream, Online Virtual Terminals are just as popular as regular terminals or card swipers. An easy way for a small or medium size business owner to operate one of these is on a PC. Your merchant service provider can set up a link for you to charge and capture money from your customer’s, or just put a hold and capture later, once the bank has verified customer information. Again, the problem is that banks tend to charge a bit more for these types of transactions.

Well, that’s it for now. As I know a lot of you are well informed, bringing these subjects up from time to time, makes merchants more diligent about their ecommerce banking services and the charges they incur. This is the first part of a couple glossary or “Terms” articles that we’re publishing.

Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is a leading international payments company based in New York. Stradafee is a retail and electronic payments provider specializing in ecommerce and Internet merchant account solutions. Stradafee also offers high risk merchant accounts and offshore merchant account options. Stradafee can help businesses of all industries and sizes. For more information on credit card processing visit www.stradafee.com.

WHAT DOES BEING PCI COMPLIANT MEAN?

In September 2006, the 5 major credit card companies in the world- MasterCard, Visa, American Express, Discover Financial Services and JCB came together to form an organization that would create, disseminate and regulate the standards by which each member of the payment cards industry would need to comply. The organization would be called the Payment Cards Industry (PCI) Security Standards Council. The key theme behind the PCI council is the DSS or Data Security Standard, which is a set of compliance requirements to be met by each entity in the process of credit card processing, who maintains, processes or stores credit card information. The current version of the Data Security Standard is 1.1 adopted with effect from December 31, 2006.

The PCI consortium is basically aimed at providing security to customers in the e-commerce environment, by ensuring that the merchant or acquirer who is handling the credit card information has sufficient security checks and facilities in place to prevent fraudulent activity. PCI compliance is a mandatory requirement for any merchant, third party credit card processor or acquirer, who is storing, processing or receiving credit card information in any form. By the end of 2007, PCI compliance was made mandatory for any organization that accepts credit card payments. In case such a merchant or acquirer is not PCI compliant, the PCI council is empowered to levy fines (upto $500,000) and take regulatory action, in some cases even permanently prohibit the entity from credit card activity. However, it is important to note that PCI compliance is mandatory for only those parties who are in possession of the Primary Account Number (PAN), or the full 16-19 digit credit card number. Technically, if the merchant or acquirer in question does not store, process or receive the PAN, then the said party would not need to comply with PCI rules.

To be PCI compliant technically means that at the time that an authorized PCI auditor audits a merchant or acquirer’s systems, the said party is in 100% compliance with the PCI rules. This practically means that as long as the merchant can show compliance at the time the audit is conducted, he or she does not need to stay compliant throughout- this is obviously a regulatory issue which may need to be sorted out with time. In any event, being PCI compliant would mean that each of the 12 requirements of the PCI DSS 1.1 standard is met by the merchant or acquirer in question. Most of these requirements revolve around access control and network protection. In addition, proper monitoring and regular security checks are mandated. The PCI DSS can be divided into 6 basic sections to aid understanding:

1. Network Security
2. Protection of Credit card information
3. User and group level access control
4. Organizational level information security policy
5. Protection against vulnerability and business risks
6. Regular monitoring and maintenance of security infrastructure.

The PCI council, prescribes these rules in the context of merchant levels (1, 2, 3, 4), which have different levels of required compliance and corresponding fines and levies. Merchants are classified into levels 1, 2, 3 and 4 based on their volume of transactions and whether or not the merchant has had any data breaches in the past. For instance, Level 1 merchants are those that have the highest volume of transactions, upwards of 6 million a year currently, as well as the merchants who have experienced a breach of sensitive data in the past. It is important to note that the DSS 1.1 standard is more focused on Level 1 and Level 2 merchants, as they are more prone to credit card fraud than the other levels. Furthermore, MasterCard doesn’t have any specific requirements for a merchant to fall under Level 4, whereas Visa has different categories in some geographic regions. While MasterCard suggests that level 4 is for merchants who are not in Level 1, 2 or 3, Visa goes a step further and has level 4a and level 4b categories as well.

Becoming PCI compliant will not be free, as putting in place both organizational as well as technical measures will involve investment in terms of both time and money. It is estimated that a Level 1 merchant would need to spend nearly $700,000 in order to implement PCI compliance. The costs would be lower for lower level merchants- for instance, a Level 2 merchant may spend only half the amount of a Level 1 merchant. However, this is not taking into account the fact that non-compliance could lead to huge fines and sometimes a revocation of the right to accept credit cards.

Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is a leading international payments company based in New York. Stradafee is a retail and electronic payments provider specializing in ecommerce and Internet merchant account solutions. Stradafee also offers high risk merchant accounts and offshore merchant account options. Stradafee can help businesses of all industries and sizes. For more information on credit card processing visit www.stradafee.com.

WHY DO HIGH RISK MERCHANTS NEED AN OFFSHORE MERHANT ACCOUNT?

There are several ways in which a merchant account may be categorized. A terminal based on non-terminal based merchant account, in which the distinction is based on whether a physical terminal is required to swipe the credit card or not. The terminal is connected to a phone line which connects the terminal to the credit card processing backend, in order to carry out a transaction. The growth of cellular phones and popularity of wireless options has created a new market for wireless terminals which use a CDMA or GMS chip to communicate with the processor wirelessly. This means that a merchant is not bound to his or her sales office or outlet in order to accept a customer order. Non terminal accounts include internet merchant accounts, telephone and mail order merchant accounts, in which credit card data and authorization can be transmitted electronically without swiping the card. For instance, in case of telephone merchant accounts, a touchtone telephone is used and the button presses are recorded and translated into credit card processing data.

Another way to look at merchant accounts is based on their risk profile- typically low risk and high risk merchant accounts will be treated and assessed differently by merchant account providers and third party credit card processors. Low risk merchant accounts are applicable to those merchants who are in a business that does not involve a high risk of chargebacks or are in a business that is not considered high risk by most banks. For high risk merchants, a high risk merchant account is required. These high risk merchants are usually in the high risk business classification and typically also in the high volume category. In most cases, these high volume businesses will also get flagged by a domestic bank and may need to go offshore for a merchant account that provides adequate services as well as security.
It is possible for a high risk merchant to obtain a domestic high risk merchant account, but they may need to provide a huge security deposit in the form of a cash bond or indemnity bond. For a new business, this may be nearly impossible, and even for an established merchant who is able to provide a track record, the high value of the bond may not make good business sense.

Why is a high risk business classified as such? Primarily due to the high risk of chargebacks involved. A chargeback is a reverse charge on a merchant due to a claim by the buyer, typically due to suspicion of credit card fraud or non-delivery or defective delivery of the product ordered. Especially in case of intangible products such as software, the risk of chargebacks tends to be high. In addition, some types of businesses such as online gambling are outside the regulatory purview of the law of some countries. Banks or merchant account providers in those countries will flag such businesses as high risk. Other businesses selling adult entertainment products, online dating services, tobacco, online auctions, travel agents etc are also in the high risk category. With such high risk businesses, tangibility of the product is also an issue, which leads to debates on whether the product was delivered and whether it was defective. Auction sites are most susceptible to credit card fraud, accounting for about 44% in the first half of 2005 of all internet related fraud. For instance, Ebay, the world’s leading auction site, tracks about USD 1 million per day in fraudulent auctions.

For a US citizen to open an offshore merchant account, there are certain guidelines and requirements that need to be met, as per the Fraudulent Disposition Act under the US department of Treasury. For instance, the person or company in question must not have any litigation pending. In addition, the person’s or company’s liabilities should not exceed the value of their total assets and must have sufficient funds to pay to its creditors. Furthermore, an offshore merchant account could be considered fraud if it is intended to cheat creditors or to avoid existing criminal offences. An offshore merchant account must hence be a well evaluated business decision, rather than an avoidance mechanism.

Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is a leading international payments company based in New York. Stradafee is a retail and electronic payments provider specializing in ecommerce and Internet merchant account solutions. Stradafee also offers high risk merchant accounts and offshore merchant account options. Stradafee can help businesses of all industries and sizes. For more information on credit card processing visit www.stradafee.com.

WHAT DOES A MULTI-CURRENCY MERCHANT ACCOUNT DO?

A multi-currency merchant account allows a merchant to accept payments in multiple currencies and currencies other than his home currency. This can be an excellent advantage in the given scenario of globalization which has provided an internet merchant access to a global market for his or her products. With a multi currency account, a retailer can provide the customer the ability to pay in their own currency, while still receiving remittances in the home currency. In case an offshore merchant account is used, a number of different currencies are available to the merchant in which to settle funds. For instance, a buyer in New Zealand can buy products from a US merchant and still pay for it in New Zealand dollars. At the same time, the US online merchant will receive remittances in US dollars.

Any e-business today will be hard pressed to survive without international sales or an online presence. People in major emerging economies such India and China are increasingly interested in products from developed countries such as the US and the UK, as these countries are renowned for their high quality, which is often not available in developing nations. However, as is the case with many of these countries, the government imposes a restriction on currency exchange and their own home currencies are not freely convertible. By offering a multi-currency option, an e-merchant can not only gain a wider market access, but also gain a competitive edge in the e-tailing marketplace. An added benefit with some merchant account providers who have multi-currency capabilities is that they are able to provide localized web pages in the reader’s language that makes it even more user friendly.

There are many merchant account providers out there who offer to credit card acceptance in most global currencies, sometimes ranging from 120 to170 currencies around the world. It is important to note, however, that for the merchant, the currencies in which funds are made available finally, are more limited to the better known currencies, usually 15 major global currencies including UK Pound Sterling, US Dollars, Euro, Canadian Dollar, Japanese Yen, Swiss Francs and Australian Dollar. Foreign exchange rates are provided daily by the merchant account provider. The multi currency merchant account provider will indicate currencies on the monthly account statement.

While it is obviously beneficial to provide multi currency facilities, it does not come free, and adding more currencies will increase both monthly maintenance fees as well as monthly and set up fees. Some provides will usually provide a default currency at no additional charge and an incremental fee for each progressive currency added. In addition to the wider market access that comes with multi-currency acceptance, an online merchant may choose to maintain multiple accounts for each different currency. For instance, if an US based online merchant receives several orders from the UK, it may be wise to set up a separate Pound Sterling account offshore to maintain funds in the same currency. Conversion charges can be saved significantly using this technique, and many e-tailers opt for it. This insulates them substantially from currency exchange rate fluctuations.

While multi-currency acceptance increases market access available to an online merchant, it also increases exposure to credit card fraud, especially since the foreign buyer is not regulated by US law, and in case of a problem, the local government may not be able to provide any suitable protection. According to a survey conduct by the Merchant Risk Council, online credit card fraud causes losses of upto USD 50 million each year. In most cases, credit card fraud originates from the less developed nations, primarily the following (actual rankings differ as per different surveys):

The Ukraine
Indonesia
Yugoslavia
Lithuania
Egypt
Romania
Bulgaria
Turkey
Russia
Pakistan
Malaysia
Israel
Venezuela

In order to minimize potential losses due to such fraud, it is important for an online merchant to ensure that the merchant account provider has taken the necessary steps in terms of verification, particularly fraud scrubbing. In addition to CVV and AVS verification, a good fraud scrubbing software can be instrumental in weeding out potentially loss making sales. However, the merchant must remember that the process is not perfect, and it is likely that along with fraudulent transactions, a small percentage of legitimate sales may also be lost.

Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is a leading international payments company based in New York. Stradafee is a retail and electronic payments provider specializing in ecommerce and Internet merchant account solutions. Stradafee also offers high risk merchant accounts and offshore merchant account options. Stradafee can help businesses of all industries and sizes. For more information on credit card processing visit www.stradafee.com.

WHO NEEDS AN INTERNET MERCHANT ACCOUNT?

The term offshore usually makes people think that something illicit is currently, or going to happen in the future. Not true; in fact, going offshore is a great way of streamlining an international client base and getting better rates, while doing it. The term offshore simply put, means that you are doing your banking in a country other than the one, your company is physically or legally registered in. For many businesses, that do a lot of business in one particular country, that is really the main option.

Merchant Service Providers specializes in finding merchant accounts for businesses throughout the world and links them with the right bank for them, depending on their geographical market and type of business. Ecommerce based businesses differ as widely as any other type of business. Five years ago, a popular, high volume, internet based retail business was Ebay. Today, Ebay is still the leader in internet based seller to seller simple transactions. Most of the business is transacted through Paypal, which is in a sense an escrow service, or entity that holds money, only to be released under terms of a pre-determined agreement. I’ve heard of them described as an organization that lets you send money to someone else’s email. I guess it’s not that easy; like all bank transactions, these are funneled through banks, while secure, simply through some bank, somewhere; maybe domestic, maybe offshore. I guess we’ll never know. The point is that when you give a business your credit card numbers, they’re processed through a number of channels that provide security, transfer funds and deliver them securely to their final destination.

Today, internet based businesses have grown from a merchant supplementing their storefront with taking orders online and over the telephone, to entirely internet and telephone based businesses. These online merchants don’t have it as easy as we may think. With the kind of exposure that the internet creates, combined with the relative ease of creating an internet based business, prices are driven down, while volume drastically increases. A good complaint? If your supply lines and logistics are in place. Maintaining and growing a profitable online business is so much of the battle today and the saying is true that the hardest test is the test of time. While good service and accessibility to your vendors and customers are key, sustainability and survival are just as important. Behind the scenes, product fulfillment and good banking keeps you out of court and out of your banker’s office applying for a second mortgage. Using a merchant service provider cannot help you with your supply chain management; however, it can help with your online banking needs, as well as specialize in not only high volume credit card processing and online check processing, but also high risk accounts, which are mostly just categorized as, “Card not present” transactions by domestic banking institutions.

Stradefee Limited, for example, works with merchants ranging from low risk, low volume, to high risk, high volume and everything In between. Just as every business owner has specific needs, merchant service providers like them have specific solutions. They can offer merchants services such as virtual terminals, third party fraud scrubbing, aggregator accounts, account signatory services and processing gateways. As not all online merchants offer hard goods, service industry vendors are very much a part of our portfolio. Companies from law firms, large event caterers and concessions providers to online music download websites and travel companies can all benefit from services that internet banking facilitators have to offer. Today, nearly any product that you can purchase in a store, from sporting goods, clothing, large home electronics, appliances and automobiles to services you can obtain like law and medical advice (usually not professional), business consulting, banking and media purchases are all mainstream internet transactions and they’re almost all high volume. In an economy, where bottom lines get smaller and personal time is at an all time and coveted low, your business needs to run more efficiently with the ability to grow and maintain that growth. Your banking needs cannot be the bottleneck of your business plan.

Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is a leading international payments company based in New York. Stradafee is a retail and electronic payments provider specializing in ecommerce and Internet merchant account solutions. Stradafee also offers high risk merchant accounts and offshore merchant account options. Stradafee can help businesses of all industries and sizes. For more information on credit card processing visit www.stradafee.com.

PRESS RELEASE: Adam Lohr To Do Computer Animation For Stradafee Limited

Stradafee Limited will be releasing several e-commercials this upcoming year to be displayed on the internet through various search engines as another way of promoting our services and reaching out to our client base. To ensure we’re represented well, we’ve been talking with several companies and individuals that specialize in these types of applications. In the end, we decided to go with a local Computer Animation Designer, Adam Lohr. Adam is a 1998 graduate of The Art Institute of Pittsburgh, with a degree in Computer Animation. Adam Lohr’s resume speaks for itself, he is relatable and listened to our needs. We’re sure that these projects will be handled in an upmost competent manner and we’ll be able to build a lasting professional relationship with Mr. Lohr.

When we started this endeavor to branch out and proactively expand our business, the internet was really the best option for us as it’s the most efficient way to reach potential clients throughout the world. If you’re not familiar with Stradafee Limited, we’re a merchant service provider for businesses, usually very large businesses that have special needs that they usually can’t get domestically and, or from one source. We not only find banks for these businesses to establish merchant accounts, so that they can process their customer’s credit cards; but we also help establish the relationship and connections for them when they get started. It can be really scary when you’re dealing with a lot of money at once, and it’s not yours; you want to ensure accuracy and security while not having to hire an extra staff to make sense of it all. We’re really a niche’ company, as a lot of the services we offer, aren’t always available by the banks our customers dealt with before us.

The primary reason we decided to use the internet to help grow our business is that so many of our customers are ecommerce based as well. They take orders over the phone and via the internet and as so many of us know, grows businesses quickly. “It’s just natural to deal with companies that specialize in ecommerce and we’re keeping in form with how we started,” Jennifer Loganathan, CEO of Stradafee Limited. “What’s happening with the animated commercials is important for us. Instead of reading an article or one of our press releases, potential clients can see what it is that we do and how we can help them in thirty to ninety seconds. Our goal with the series is to educate people about and bring awareness to the international banking industry, because at the end of the day, merchants have so many more options than what it is that they are doing now!”


Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is a leading international payments company based in New York. Stradafee is a retail and electronic payments provider specializing in ecommerce and Internet merchant account solutions. Stradafee also offers high risk merchant accounts and offshore merchant account options. Stradafee can help businesses of all industries and sizes. For more information on credit card processing visit www.stradafee.com.

PRESS RELEASE: STRADAFEE LIMITED MOTOCROSS SPONSORSHIP PROGRAM

Once again Stradafee Limited is venturing into the world of competitive motocross. Last year, we sponsored an amateur rider in the western New York area ; it was a lot of firsts for us as a company as well as for our rider, but in the end it worked out well and we’re all giving it a go again this year. While there isn’t any kind of direct connection between motorcycle racing and the banking industry, these types of sponsor related endeavors are a great way of getting out in the local community and letting people know who we are in a positive way. For those of you don’t know who Stradafee Limited is or what we do; we’re a company that specializes in finding merchant accounts for businesses around the world, so that they can accept credit cards as a form of payment. It’s a growing trend, as the internet is connecting businesses with clients from farther away than ever.

Last year Stradafee sponsored Sager Loganathan, a novice class rider for the 2007 WNYMA (Western New York Motocross Association) season. Loganathan rode in the Senior C class which is comprised of plus thirty riders of different skill levels. Some of the riders have been racing their whole lives, while others are getting back into the sport after a hiatus, usually do to work or family obligations. Either way, it’s a mixed bag of skill levels, which makes for some really interesting spectating. As well, the Senior C class allows for a rider to ride a bike as small as a 125CC two stroke bike up to a 450cc four stroke machine; needless to say, there’s a wide variety of skill levels, competitors and machinery out there. Last year Loganathan rode a 2007 Yamaha YZ250F, which falls somewhere in the middle of pack on power but is reliable and handles well. This year, we’ll be riding a 2008 KTM 450 S-XF, which has the most horsepower of any bike in its class; hopefully, this will help our results! As well, the program may grow, but we’re not just sure yet. The addition of a second or third rider may be in the cards; as our budget is fixed and since motocross isn’t a moneymaker for Stradafee Limited and it’s an extremely expensive sport. If additional rider(s) are added, it would be in the professional ranks, in hopes of bringing national attention to us in the event we choose to focus on smaller, domestic accounts.

As it’s winter and there’s snow on the ground, we’re anxiously awaiting the 2008 riding season, till then, we keep busy with work, family and the occasional trip down south to get some riding in. look for us at practice and at the races this year, we’ll be on the 984 bike.

Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is a leading international payments company based in New York. Stradafee is a retail and electronic payments provider specializing in ecommerce and Internet merchant account solutions. Stradafee also offers high risk merchant accounts and offshore merchant account options. Stradafee can help businesses of all industries and sizes. For more information on credit card processing visit www.stradafee.com.

WHAT IS CHECK 21?

Check 21 or the, "Check Clearing for the 21st Century Act" is a regulation that enabled electronic check collection, processing and clearing between banks in the United States. The Federal Reserve had been investigating electronic check processing since the year 2000 with a focus on speeding up check processing and reducing transportation related delays. Through the collective efforts of industry officials and Federal Reserve staff, the act took shape and was presented before the US congress in the year 2002. The act, though signed in 2003, came into effect only from October, 2004. This act has brought in substantial changes, not only in the conventional method of check processing in United States, but also in the electronic payments industry, which was so far dominated by credit cards. The act is aimed at reducing both time and costs of physical transportation and processing of checks by using electronic images which are delivered electronically through a nationwide network of banks called ACH or Automated Clearing House. Compared to the previous standard of 3 days for a local check and around 14 days for out of town checks, a check now deposited at day 1 can be processed and cashed by the end of day.

In addition to being time consuming and expensive (considering the additional cost of transportation, particularly in outstation checks), physical transfer of paper checks is relatively more prone to theft. Check 21 Act has allowed ‘check truncation’ which means that the physical check is no longer required and an electronic substitute in the form of a digital image of the front and back of the check can be used for processing and payments, and is just as good as the original paper check. Such substitute digital images are also referred to as Image Replacement Documents (IRD) or echecks (electronic checks), though the term 'echecks' also encompasses several other payment options nowadays. However, to qualify as a valid e-check, the digital image has to comply with certain requirements of the Check 21 act. The substitute check must have an additional statement added to it saying, "This is a legal copy of your check. You can use it the same way you would use the original check." In addition, the substitute check must identify the account holders name and address, check number, transit code, bank information, 9 digit routing number and checking account number. Image file size of the substitute check is a critical consideration, as with the sheer number of checks in processing due to its growing popularity, banks will have to store a large number of check images for their records. In addition to storage, a larger file size will also lead to slower transmission and consequently slower processing. Banks may thus be compelled to lower the image file size, thereby lowering resolution and image quality, which may cause problems with validation of electronic checks and consequently security of the processing system.

Quicker processing will mean that there will be a much shorter time lag between the payee depositing the check and the funds clearing from the payer’s bank account. Hence, "Float" may not be available, implying that the payer’s funds have to be in place before the payee deposits the check. In case funds are insufficient, either party can face penalties and fines, as per the provisions of Check 21. Check 21 also provides protection to customers, in case of double deposit (where paper and electronic copies are deposited), or in case funds are deposited to or withdrawn from the incorrect account. In such cases, Check 21 provides the customer the right to have funds re-credited upto USD 2,500 per check, within 10 business days until the investigation is completed. However, this benefit applies to only those cases, in which a customer possesses a valid "substitute check." The right to recover losses due to error or fraud covers not only the amount withdrawn, but also the fees, dues and/or penalties associated with the respective transaction. Check 21 provides these rights in view of potential problems associated with electronic check processing, such as the ones mentioned above. In addition, sometimes the digital image may not legible, causing transactional errors.

While Check 21 has increased the speed and efficiency of check processing, it has also increased the chances of check related fraud. As physical checks are minimized in electronic processing, it is harder to detect fraudulent deposits or payments. For instance, a digital image does not have the benefits of watermarks or chemically reactive paper, which are used to detect and minimize fraudulent checks. However, it has breathed new life in the usage of checks, which were on a constant decline, and created new demand for electronic checks, which are becoming increasingly popular, and are viewed by many as an excellent and low risk substitute for credit cards.

Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is a leading international payments company based in New York. Stradafee is a retail and electronic payments provider specializing in ecommerce and Internet merchant account solutions. Stradafee also offers high risk merchant accounts and offshore merchant account options. Stradafee can help businesses of all industries and sizes. For more information on credit card processing visit www.stradafee.com.

How To Accept Checks Online

Every business has to have an online payment system in today’s e-commerce driven marketplace. When it comes to making a payment online, several methods are available, including credit cards, debit cards, e-wallets, and echecks, which are fast becoming popular and taking a chunk of the market away from credit cards. An e-check is an electronic check processing option that works like a physical check- instead of transferring sensitive credit card information online, which is prone to security breaches, an e-check simply transmits the check information along with some other details, thereby keeping sensitive credit card information safe. While an e-check is not perfectly secure, it does offer some benefits related to security, especially when compared to a credit card.

Making payments or accepting checks online is relatively straightforward. There are two basic ways to accept check payments online. In both methods, a customer completes an order by checking out much the same way as in the case of a credit card transaction. The difference comes in when payment information has to be entered. In the first method, instead of filling in credit cards numbers, expiration dates and verification codes, a user will need to enter the information on the physical check (which is in the customer’s possession). This information will then be processed through the ACH network and upon approval, the check information is transferred to the seller, who can then take a physical printout of the check and deposit it in his or her local bank. The critical component here is the software that processes the check information and provides an electronic version of the check that can be printed out by the seller at his own location.

This can be accomplished via e-checks or electronic checks. In a typical transaction, instead of providing credit card details, the customer will enter bank routing information and check number. Echecks are essentially a replacement for paper checks, as far as the buyer is concerned. The seller may still have to print the physical checks and deposit them with the bank at periodic intervals. However, services are available whereby the printing can be outsourced to a processor and the payment is directly deposited into the seller’s account.

In the second method, the need to take a print out for deposit is eliminated, as the check gets directly cleared online and is settled by both payer and payee banks directly. In this method, an online payment gateway which has check processing facilities will collect bank account, routing and other information and transmit funds through the ACH network.
Also, check payments are contingent upon funds being cleared by the payer’s bank. This method is called ichecks or internet checks. This method completely removes the role of physical checks and the processing is

In order to start accepting checks online, a merchant will need to sign up with a check processing service, which will provide a payment gateway software to process check payments via the internet. This payment gateway will collect the necessary information including bank information routing number as well as the check number. It will also be responsible for processing the payment via the ACH network. Typical fees associated with such accounts include set up and transaction fees. There may also be check guarantee and verification fees as well as reserves, depending on the chosen provider.

A key benefit of accepting checks online is that nearly everyone is familiar with checks and transacting check payments and receipts involves much less training, compared to credit cards. Hence, a new e-commerce customer will find it much easier to just go in and input check information on a payment gateway, rather than enter credit card information, CVV and other numbers. In addition, check processing fees are typically lower than credit card processing fees. The obvious drawback is that a check is not cleared instantaneously, and most sellers will only ship the item once the funds clear. Hence, there will be a longer waiting period for a buyer, compared to if he or she conducts a transaction through a credit card. This is where check guarantee and verification come in. Many service providers will provide either seller protection terms or check guarantee and verification, within the processing function.

Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is a leading international payments company based in New York. Stradafee is a retail and electronic payments provider specializing in ecommerce and Internet merchant account solutions. Stradafee also offers high risk merchant accounts and offshore merchant account options. Stradafee can help businesses of all industries and sizes. For more information on credit card processing visit www.stradafee.com.

VENEZUELA MERCHANT ACCOUNTS AND CADIVI

If you’re a Venezuelan merchant, times are probably both good and bad for you and that is no surprise. With your economy very much internalized, with little import help from outside, especially US and highly Democratic nations; your playing field is well defined and full of obstacles that need to be overcome. While we can’t help you with your stock and inventory control challenges, we can help you process your credit cards and collect your money easier and more efficiently.

As you know, CADAVI has the power to regulate and impose restrictions, called "Providences", on the requirements for purchasing foreign currency. They also have the power to issue or deny authorizations to purchase foreign currency and verify and control the use of that foreign currency, as well as the purchase of that currency from the Central Bank of Venezuela that has authorized the transaction. CADIVI has issued a number of Providences on the requisites and procedures for the purchase of foreign currency for the different kinds of operations (imports, foreign investments, foreign debt, technology transfers, etc.)

In the last year, almost four times the money (4 Billion, versus 1 Billion) has been charged on government credit cards, provided to Venezuelan citizens as an attempt to inject money back into the economy and strengthen Venezuela as an independent and self-sufficient country. Unfortunately, a lot of that money never returned to the Venezuelan people for its intended use, which was to help with manufacturing and food supply. If you’re a Venezuelan merchant or outside merchant that wants to accept these government cards, you may be in for a bit of a challenge. The government of Venezuela and more specifically CADIVI has identified the numerous ways that people, both merchants and card holders have been defrauding their country and undermining the local economies. Some of these popular scams include traveling to other countries and making purchases through merchants that inflate the price of an item or items and give cash refunds to the card holder, charging tokens at a casino and turning them in almost immediately for cash and merchants that simply charge a percentage of the amount charged, while rendering cash to the card holder. These are all commonplace and the Venezuelan government is well aware of these goings on and will act accordingly to stop this fraud. All of this has made it difficult for honest, law-abiding merchants and businesses to accept credit cards, make an honest living and help strengthen the Venezuelan economy. While the government and CADIVI doesn’t plan on stopping the credit cards any time soon, they are currently placing restrictions on purchasing and trying to develop other plans to bolster the Venezuelan economy with the injection of dollars spent. One great example of this are credit cards for further education abroad, in an attempt to educate or re-educate people that will return to Venezuela and strengthen their workforce.

If you are a merchant within Venezuela or want to accept these government issued cards, all hope is not lost. Currently their are banks that are offering merchant accounts to businesses that are challenged by new government interest, regulation and red tape caused by all of the fraud that has transpired over the last couple of years. Stradafee, a merchant service provider specializes in providing high volume, high risk and international merchant accounts for merchants for merchants worldwide. With many countries’ domestic banks imposing, sometimes unfair restrictions on banking, the honest businesses often suffer the most and find it easier to do their banking offshore through merchant service providers. Getting an offshore merchant accounts is every bit possible as a business owner. You can ensure safe and easy processing by obtaining a merchant account through a merchant account provider, such as Stradafee. It’s probably a better fit than you think; while nobody’s going to guarantee you that your government is not going to audit you or ask questions about charges, you can be well prepared for it by taking advantage of a lot of services that we provide, and many of them are absolutely free. Some of the services that can help your business today are having a terminal for card swipe transactions or POS (point of sale terminal), virtual terminals for telephone orders, a processing gateway for ecommerce transactions, funding schedule next day-or to a one week hold pending due diligence and third party fraud scrubbing. All of your transactions are batched daily and keep you organized; statements are provided so that merchants can keep track of their customers’ purchases. The real goal is to fix the perception of the merchant/government credit card holder relationship; which if used properly, benefits the Venzuelan economy and its people. If you’re a Venezuelan merchant and would like to apply for a merchant account, please feel free to visit our website at www.stradafee.com.

Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is a leading international payments company based in New York. Stradafee is a retail and electronic payments provider specializing in ecommerce and Internet merchant account solutions. Stradafee also offers high risk merchant accounts and offshore merchant account options. Stradafee can help businesses of all industries and sizes. For more information on credit card processing visit www.stradafee.com.

WHAT IS A MERCHANT ACCOUNT?

The use of plastic money or credit cards is fast becoming the preferred mode of payment for all kinds of purchasing activities, not just in the developed world but also in emerging economies. Two key factors are contributing to this trend:

1. Convenience and Security: Credit cards mean that hard cash does not have to carried around in large quantities for high value purchases. Credit cards also carry the convenience of remote purchasing and instant payment delivery, unlike in the case of pay orders or banker’s cheques, which involve extra fees, delivery charges and the logistical time lag.

In addition, there is a security feature attached to credit cards, and generally speaking, a credit card loss does not always mean an immediate loss of money.

2. E-commerce: with the growing prevalence of electronic purchasing options such as online, TV and telephone and growing adoption of the convenience factor, credit cards are becoming the only practical choice for payments.

Merchant accounts are accounts which enable acceptance of payments through credit cards, cheque cards and debit cards. A retailer can obtain a merchant account with a bank or through an independent merchant account provider, who specializes in setting up and maintaining merchant accounts for miscellaneous business entities. The procedure for applying for and obtaining a merchant account is relatively simple and can be viewed http://stradafee.com/merchant-enrolment.php

There are different types of merchant accounts available depending on retailer needs and the nature of business. For instance, for an internet retailing business, an internet merchant account is used, whereas a swipe based physical terminal is used for a brick and mortar retail business. Most merchant accounts can however, be classified as:

1. Swipe based: These merchant accounts depend on a physical terminal connected to a phone line. The credit card needs to be swiped through this terminal to initiate, process and complete a payment transaction. In the case of check verification, there will be a check reader, acting as the swipe terminal.

A new innovation in the swipe based processing segment is the wireless merchant account terminal, in which instead of a regular phone line, is connected wirelessly using cell phone technology. The advantage of this technology is that a merchant or e-tailer will not be limited geographically for accepting payments. For instance, at a retail exhibition, a merchant can easily set up without wires, a payment system for walk-by clients to submit credit card payments.

2. Non swipe based: These include all those methods of payment which require credit card information but the credit card itself does not need to be swiped. This also includes merchant accounts for online check payments and clearance. Some of the common non-swipe merchant accounts include:

a. Internet Merchant Account: This type of account is used by internet based retailers. Credit card payments are processed after receiving electronic credit card information received through a web-based form and transmitting it through a payment gateway. This type of merchant account is a very popular merchant account, particularly due to the substantial growth of the e-commerce industry.

b. Online cheque acceptance (e-checks): This type of processing utilizes cheque payments without actually having to receive a cheque by mail. The customer can provide cheque information on the physical cheque, such as depositor name, account name, cheque number and so on, and the retailer can, using a cheque processing solution, verify and receive a cheque via online submission or phone/fax or email. Using the special software, the cheque can then be printed remotely and submitted by the retailer in physical form.

c. Telephone order merchant account: Using a touchtone telephone, this type of account receives information about the credit card using the telephone keypad. This account is suitable Telephone Order businesses which have a substantial business coming in through the telephone.

An important factor to remember with merchant accounts if fees; merchant accounts involve a number of fees to run and maintain, including setup, monthly/annual, statement fees (which are fixed) and a number of variable fees such as discount rate, rolling reserve, per transaction fees and address verification (AVS) charges. The actual cost of setting up, running and maintaining a merchant must be understood and compared to actual business requirements, such as volume and frequency of transactions, nature of business and track record. Selecting the right merchant account provider will be critical from the cost-feasibility point of view as well as smooth transaction processing of credit card payments.

Jennifer Loganathan is the CEO of Stradafee Limited an international merchant service provider. Stradafee is a retail and an electronic payments company specializing in global eCommerce and Internet merchant accounts. Merchant accounts make it possible for businesses to accept credit cards as form of payment for card present and card-not-present transactions. For more information on credit card processing visit http://www.stradafee.com.

KEY ADVANTAGES OF AN OFFSHORE MERCHANT ACCOUNT

An offshore merchant account can be your only choice if you’re in the high volume high risk business, and a domestic provider is either not accepting you for merchant account services, or is asking for a huge security deposit or cash bond. However, with the advancements in both regulatory environments as well as technology with offshore merchant account destinations, it does not have to be looked at as a last resort, but rather a convenient and beneficial choice.

In most cases, a domestic merchant account will be the most convenient option, as the e-tailer will not have to spend too much time setting up offshore, and will be familiar with the laws of the land in which it operates. Going offshore means setting up a business entity in another land, involving both time and money, more so than in the case of a domestic provider. However, with the tremendous growth of the offshore segment, Setting up a merchant account offshore can be much simpler and convenient with the right merchant account provider. If your business is categorized as high risk or it lacks a track record or has a bad credit history, an offshore merchant account is ideal, as screening processes are much less stringent offshore. Although set up, maintenance and processing fees can be higher offshore, going outside domestic borders can open up a global network of banks and processors to choose from, enabling the e-tailer to choose from a wide variety of deals in terms of fees and charges, as well as security and technology. Hence, the e-tailer has a much high probability of finding the most compatible partner for its sales volume as well as nature of business.

Offshore merchant accounts can offer substantial benefits for an e-tailer including:

1. Taxation benefits: Being set up offshore in specific tax havens can substantially reduce tax liabilities. Many countries have tax treaties in place with other less developed nations that enable business to reduce not just total tax liability but also taxes on individual transactions, which can add a significant chunk to the retailer’s bottom line.

2. No processing limits: Going offshore can be an excellent option for high risk high volume businesses, as they will not be limited by a ceiling on the volume of transactions, which may be imposed by a domestic bank, due to their relatively lower risk profile.

3. Multi-currency acceptance: Offshore merchant account providers can make it simpler to accept payments in multiple currencies as well as receiving remittances in multiple currencies. This can be beneficial for e-tailers who receive a significant amount of inward remittances in foreign currencies, and can use the offshore account to insulate the effect of currency fluctuations.

4. Excellent security: For many offshore destinations such as Bermuda, the merchant account and credit card processing are mainstays of the entire economy, and are hence investing heavily in providing dedicated ‘special economic’ zones with infrastructure specially designed for this industry. Hence, the retailer can benefit from state of the art technology and security, which indeed is being used even by many domestically located banks to outsource their credit card processing needs.

5. 24/7 live: With an offshore merchant account, the provider can offer 24/7 services to remain online and function for any time zone, thereby providing greater access to a global market. In addition, the anytime available customer services can be critical to a successful sale when an order comes in that needs to be verified in real time.

An offshore merchant account is hardly a compulsion now, as with increasing competition and propagation of providers, fees are constantly coming down and many providers offer attractive packages for online retailers. Believe it or not, the latest innovation in the industry seems to be zero fee merchant accounts, which are similar to some third party credit card processing options. With these accounts, there are no set up or maintenance fees; the provider charges a percentage of each transaction instead. However, all offers apart, the offshore merchant account must be chosen with care, and set up through an established provider such as Stradafee. It may prove to be the best choice for any type of retail business.

Jennifer Loganathan is the President and CEO of Stradafee Limited an international merchant service provider. Stradafee is a retail and an electronic payments company specializing in global eCommerce and Internet merchant accounts. Merchant accounts make it possible for businesses to provide credit card processing for card present and card-not-present transactions. For more information on credit card processing visit http://www.stradafee.com.

INTERNET MERCHANT ACCOUNTS FOR ECOMMERCE TRANSACTIONS

E-commerce is bustling and online shopping is becoming ever more popular. Not only has online shopping growing in terms of value, but it is also slowly but surely, taking over a significant chunk of the total retail sales share from brick and mortar stores. Experts estimate that online shopping will continue to grow steadily at the cost of physical shopping. In the present scenario, it would be foolhardy for any retail business to not have an online presence and e-commerce portal for their products and services.

Being e-commerce ready implies being able to accept payments from customers via the internet. This is possible through a number of different methods, the most common being an internet merchant account. An internet merchant account enables a retailer to accept credit card payments online through the electronic submission of a purchase form, along with credit card data including credit card number, purchases information and other security related information.

Merchant accounts can be obtained both offshore and domestically. It may be as simple as going to your local bank where your business has a bank account, filling in an application and obtaining a merchant account. The merchant account provider will provide a payment gateway software which acts as the user interface when a customer initiates an online purchase. In many cases, a merchant may be forced to go offshore in search of a suitable merchant account, especially if the retailer’s business is classified as high-risk, as is done in many cases by domestic banks, which primarily favor low-risk businesses to partner with. Once a merchant account is obtained and set up on the retailer’s website, the merchant can start their e-commerce business.

In many cases, particularly if the business is high risk (as mentioned above) or does not have a sufficient track record in the e-commerce industry, it will be difficult to obtain a merchant account directly. In such a situation, the merchant will be well advised to obtain the services of a merchant account provider. These middlemen are specialists in providing merchant account services, and have relationships in place with several banks both domestic and offshore, and will help a merchant obtain and setup a merchant account both quickly and conveniently, especially if an offshore merchant account is required.

While on the one hand, the internet opens up vast possibilities for a merchant to expand their sales, it also adds risk in the form of credit card fraud, leading to chargebacks. Internet merchant accounts involve the transmission of sensitive credit card information through a number of layers, which as secure as they may be, are not foolproof. There is a significantly high rate of incidence of credit card fraud which has led to the growth of Alternate Payment Systems (APS), which include third party credit card processors such as Paypal, online cheque processing and ‘Bill me later’. All these alternate payment processing systems focus on bypassing the transmission of credit card information over the internet for purchases. Furthermore, these systems focus on eliminating the exchange of credit card information between the seller and the buyer. Third party processors such as Paypal tend to be more expensive than internet merchant accounts and offer little protection to sellers, particularly those that sell intangible goods such as software, music, etc. In case of Bill me later, a customer is sent a periodic invoice, much like a credit card statement, for which payment has to be made directly to Bill me Later. Other Alternate payment systems are also mushrooming, such as the Western Union Speedway, in which the customer initiates a wire payment online and then submits a payment to Western Union, making it either very low cost or even free in some cases, to the merchant.

While the alternatives to internet merchant accounts are not foolproof, they are sometimes preferred by customers who are weary of security features offered by the retailer’s website. Hence, a retailer must ensure that the merchant account provider chosen for the website has the necessary security checks and features in place to prevent fraud to the maximum extent. In addition, the seller protection policy of the provider must be suitable for the specific needs of the merchant, to ensure that in case of fraudulent chargebacks, the retailer does not see significant losses.

Jennifer Loganathan is the President and CEO of Stradafee Limited an international merchant service provider. Stradafee is a retail and an electronic payments company specializing in global eCommerce and Internet merchant accounts. Merchant accounts make it possible for businesses to provide credit card processing for card present and card-not-present transactions. For more information on credit card processing visit http://www.stradafee.com.

HOW TO OPEN A CREDIT CARD MERCHANT ACCOUNT

In this day and age of electronic commerce, the decision to open a credit card merchant account is relatively undisputed. The actual process of opening an account should begin with the retailer identifying certain key parameters about the retailer trade the merchant requires the merchant account for. The selection of an appropriate vendor for the merchant account should be the first step in the cycle, which is usually followed by an application on a prescribed form. If and when approved, certain information and documentation such as financial statements will need to be furnished to the merchant account provider. One approved, the provider will supply the equipment or in case it is an online merchant account, the retailer’s website will need to embed the merchant account software in the e-commerce website and integrate the shopping card software supplied by the merchant account provider.

Selecting a merchant account provider should take into account the volume and value of proposed transactions, nature of business, history and track record and identification of specific needs, if any apply, of the retailer. The volume of transactions and nature of business proposed to be conducted via the merchant account will have a significant bearing on the available options to choose from. For instance, if a retailer expects a high volume of transactions, a merchant account for that specific purpose will need to be obtained, which frequently fall in the high risk category. Such high risk businesses may not be able to obtain a merchant account onshore, and may need to opt for an offshore merchant account. The history and track record with a merchant account may come into question in case of a domestic account provider. In case a retailer is unable to meet certain basic requirements, for instance, if a retailer has been in business (online) for less than 2 years, the merchant account provider may ask for a cash bond (as indemnity) along with a business plan, which will further need to be approved.

In addition to choosing between an offshore or onshore provider (which in some cases may not present a choice), an e-tailer will be well advised to do some extensive number crunching when choosing a merchant account provider. Today, there is available, an extensive list of provider to choose from, with varying fees, minimum requirements and transaction fees. While intense competition has caused many providers to lower their fee structures, a merchant must beware of hidden fees and charges that may not be presented initially by providers offering ‘ZERO SETUP FEE!’ and similar catch phrases to capture attention.

The actual application process begins with filling in an online form (in case of internet merchant account) or a physical form, available through your local bank, in the case of a domestic merchant account. Many offshore account providers can be located by simply searching the internet. The application form is then screened by the merchant account provider, in order to assess feasibility, primarily from a risk point of view. As mentioned before, a high risk vendor will probably be out of favor for a domestic provider without the furnishing of a substantial indemnity bond. The provider will then approach the merchant for further documentation. Such documentation will mostly include:

 Registration certificate, incorporation certificate, memorandum and articles of association (in case the retailer is incorporated), partnership deed (in case of partnership) and other organizational material.
 Details about the directors or partners including name, place of domicile (with proof), contact information, etc.
 Identification proof of the directors, managing partners.
 Business plan and financial documentation.
 Full history with a previous merchant account along with detailed information about chargebacks.

In addition to the submitted information, the merchant account provider will typically conduct its own background checks including a credit history and rating verification, as well as a detailed analysis of the retailer’s proposed business model and revenue potential. Assuming that all is satisfactory, the provider will obtain an approval from an acquirer bank that it has a relationship with (many big banks have their own acquirer bank units). Once approved, the retailer will have to purchase a credit card terminal and in many cases, a dedicated telephone line for processing needs. In case an internet merchant account is applied for, the software is the key to operations. While many merchant account providers have their own shopping cart software, they also provide a compatibility list of 3rd party software. Such 3rd party solutions are often favored by retailers due to the usability, features and ease of management.

A final point to be noted in case of an offshore merchant account- while it is possible to go directly offshore, set up and incorporate a company in a foreign land, and do the necessary paperwork yourself, it may be more convenient and practical to approach a third party merchant account provider such as Stradafee, which specialize in providing merchant accounts and have the necessary i