A Behind-the-Scenes Look at Third Party Processors

If you're still in doubt who to turn to for a smooth integration of your offshore merchant account, then turning to a third- party processor is one of avenues you can seek for assistance.


Just for a quick overview, you set up an offshore merchant account in order to accept credit card payments over the internet. There are a couple of ways by which you can the setup:


● Contact a merchant account provider

● Contact a third- party processor

● Contact foreign banks through the internet or do overseas telephone inquiries


The role of a merchant account provider has been emphasized in recent articles. So, for this time, a ray of light will be shed on third-party processors and their role in an offshore merchant account.


Here are the main characteristics of a third party processor:

● Your business' processes will be under the name of the 3rd party processor.

● Your customer's credit card statements have the third party processors name on it.

● Disputes are made through the 3rd party processor and not the processing bank.

● Your business and customers have limited protection from being ripped off.

● You will be using the third party processors' checkout system

● There will be no fixed monthly fees.

● Some may have setup fees.

● Most have high processing costs

● No contracts involved

● Your business is partially liable for the transactions that the third party processors process.



Let me give you a run of the inner workings of a third party processor. First, after you have been approved and apaid your dues, you can now create the shopping carts containing your products and link in which your customers will click to make their purchases. These links are connected to the third-party processor's server, this is where they manage the product orders for you. Third party processors can process electronic checks and credit card payments, and even ordering over the phone.


After the purchase is confirmed, the sale is automatically credit to you, of course, which the third party processor's part has been collected. Confirmation of the purchase includes Address Verification Service (AVS) that matches the shipping address keyed in by the customer to the registered mailing addresses in their credit cards or checks.


Your profits are forwarded by the third party processor at a scheduled time that you agreed upon. It is appealing to note that they will only collect their part of the bargain when your business makes a sale. Seems like a fair deal, isn't it? But, of course, you will always want a sale, do you?


Just for a quick run down on third party integration, you create third party processor account, then you set up your business' website, then you integrate your website with the third party processor's system, then you do a test-drive and run a real transaction, lastly, when everything proves to be hassle-free, you go live.


It is safe to say that the process in dealing with third party processors has a less-complicated structure, but the difference is in the ordering. The things with them is, they handle the purchases first hand then gives you your part of the sale. Parting words, getting their services is a choice, you examine if you feel secured and comfortable. You always have choices, choose what best suits you.

Must-haves of an online store

Your offshore merchant account is an invaluable tool making your business successful. Through an offshore merchant account, you'll be able to accept credit card payments online. But what does it actually take to set up one?

Just like any standard business setting, there are a number of requirements you need to comply in order to actualize your offshore merchant account.


Below are the requirements for setting up a website offshore merchant account:

● registered website on the application must be “live”

● “doing business as” (DBA) indicated on the application should be the same on website

● products, delivery method, delivery time frame and prices must be indicated

● prices should be in US currency

● business privacy policy should be published

● customer service hotline should be indicated

● shopping cart must be active and secured

● domain name should be legally registered under merchant


When you indicate in your application that “www...” is the corresponding website for your merchant account, it should be accessed real-time. The website should actually exist, not “under construction” or “will be coming soon”.


The DBA should be the same as well. There shouldn't be a different name on the website and on the application.
Not a single letter should be missed or added.


The actual images of the products that you sell should be published on the internet as well. If not, then what's the point in selling online, right?. Also bear in mind to indicate the price of the products, the price, the shipping method, and also the number of days that the shipping of the products will take to get to your customer.


Even though you have multinational target market, tag your products in US dollars. This is an indication that you are competitive, for the US dollar is the most widely-used currency in international transactions.


Your company's privacy policy should be indicated at the website as well. Admittedly, most people don't read it, but it is a requirement so that you let them know what are processes in ensuring that the website is secured, after all, it it being viewed by people on every corner of the earth with internet access. Also, this is showing both of your rights and obligations as a merchant and the rights of the customers and the viewers of the website.


As we all know, making sure that our customers are continuously extremely satisfied. But, let's face it, there will always be grievances and inconveniences that they will feel. So, having a 24-hour customer service telephone number will be a reflection that your business is serious and committed in serving your customers and potential customers. This is a requirement to protect and ensure the rights of your clients to a fair service.

A shopping cart is the main selling point of your website. Since you are a merchant, you must establish a shopping cart that displays your products with the corresponding prices. A shopping cart makes it convenient for your customers to purchase as the product is just a click away. Technically, not a click away, because they'll have to wait for the item or items to be delivered. But, it saves them the time and energy to go to the store and tirelessly choose on the displays on the racks.

Lastly, you should have a registered domain name for your website. The names should be assigned by domain name registrar duly licensed by the Internet Corporation for Assigned Names and Numbers (ICANN) or by any other national ccTLD authority to register Internet domain names.

It is crucial that all of these have been meticulously set up and published on the internet. Once these are in up and running flawlessly, the probability of getting your application for an offshore merchant account approved will be higher.

Paying your Offshore Merchant Account Dues

Setting up an offshore merchant account not only involves paperwork but also certain fees as well. It would be ideal if there is such a set up that is virtually free, which some merchant account providers do offer. But for offshore merchant accounts, there will always be fees involved.


There are a great deal of hesitation on merchants' minds to set up offshore, one of the reasons behind the doubts is the notion that there are ”hidden” fees in the contracts for offshore merchant accounts. What happens in this scenario is that you'll be introduced to a list of rates that you'll sign up for because you have found them to be reasonable. But once the bill comes in, you'll see a number of additional fees in small amounts but when added all together have actually eaten a considerable percentage of the amount you need to pay for the month. This can be really frustrating, isn't it?


So, to assist you in this setback, provided are standard fees that merchant account providers standardly offer in setting up an offshore merchant account:

●Application Fee

●Setup Fee

●Programming Fee

●Annual Fee

●Monthly Maintenance Fee

●Overlimit Fee

●Gateway Setup

●Transaction Fee

●Retail Swipe Software fees

●Check-by-phone/fax PC software fee

●Web Shopping Cart fee

●Discount Rate fee

●Address Verification (AVS) Fee

●Statement Fee


How you are charged

Application fees are rarely charged nowadays. This is so because of the growing competition among merchant account providers. Zero application fees are the one of the marketing strategies to attract clients. But, just to give you a head start, industry rate for application fees ranges from $75 - $125.


Setup fees are also a thing of the past. Most providers don't charge this anymore also as a part of the package to keep clients coming in. Industry rate is from $50 - $150.


Programming fees are applied when you want to install a software or terminal. Most providers don't charge this anymore as programming fees are considered to be part of the set up process. Industry rate is $50 - $95.


Annual fees serves as a membership fee in certain ways. By the book, purpose is for the maintenance of the account. But it's now also being taken out of the charges as part of attracting potential clients and keep the current ones in the circle. Industry rate is from maximum of $125.


Monthly maintenance fees can be regarded as the other option for annual fee. This is a choice of the merchant account holder if they want to pay the whole dues every year or divide the amount by 12. but in this day and age, monthly maintenance fees are also being taken out to promote client loyalty. Industry rate is up to $10.


Overlimit fees are charged when the account exceeds its limit. The industry rate varies because the overlimit amounts are grouped with the corresponding penalties. But this fee is also not charged anymore as part of efforts to boost client patronage.


Payment gateway setup fee if for the the installation of the payment gateway that is critical to your offshore merchant account. Payment gateway receives the credit card information of the your customers. This is also being taken out of the bill as it is regarded as part of the setup process. Industry rate is $99 - $299


Transaction fees are the fees charged by the processor for every credit card transaction. This is charged even if the transaction was approved or declined. 20 – 30 cents is the charged for every transaction made either by swiping, keying, over the internet or mail-order-telephone-order (MOTO).


Retail swipe software is a credt card processing software solution. This serves as an wireless terminal if you have a PC or a laptop with an internet connection. You can print out receipt real-time from top-of-the-line retail swipe softwares available in the market. For better client patronage, most merchant account providers are also charging zero for this service. Industry rate is $175 - $395.


Check-by-phone/fax PC software fee are charged when payments using a check are made over the phone, or send by fax or electronic check payments. This is still done, but rarely. For better efficiency and security, online credit card transactions are preferred. Plus, currently, there is no charge for this service as well. Just so you know, industry rate is $149 per month.


A web shopping cart fee is for the use and maintenance of your online shopping cart. Ofcourse, when you have an offshore merchant account, you can also enjoy the luxury of selling your products and services online, and with a shopping cart, you have global market. But this fee is also being charged free as well, for better client loyalty.


The discount rate fee is the percentage charged for each transaction that the processing company (merchant account provider) charges to manage the transactions for you, either swiped, over the internet and MOTO.


The Address Verification System is a technology that double-checks the validity of the address that your customers enter for product shipping. What this system does is verify and compare the address keyed in with the address registered in the customer's credit card issuer. Industry rate is from $5 to $10.


The statement fee is the charge for the production and mailing of your monthly statements. Your monthly bills as an offshore merchant account holder includes all the deposits in the account, total of volume sales, and other charges for the month. Now, this fee is also free of charge for improving customer service. But industry rate is $10- $15 per monthly statement.


What to look forward to

Most of the offshore merchant account fees are now taken out to attract prospective offshore merchant clients and for to keep the current ones happy and satisfied. Some even have risk-free trial periods or offer no fees at all at the initial setup, but charge little for the crucial services which is understandable considering that every business, no matter what nature it is, needs financial resources to stay afloat. Taking out some offshore merchant account fees is part and parcel of staying in the competitive arena. Just always know your options as an offshore merchant account holder, consult if you can' fully comprehend, and weigh all the factors. Lastly, there will always be fees, just know which ones are really worth paying for.