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If you are just about to start an online business or you have one already, of course, you'll need a merchant account. However, the question is, do you need an international merchant account? Many if not most merchant account companies these days automatically convert currencies to your local currency and your customers’ currencies, so serving global customers is not really an issue anymore. However, it may be prudent for you to have an international merchant account if you want to establish an offshore merchant account. An offshore merchant account allows you to have an easier time setting up your account and also saves you from many of the tax liabilities of a domestic merchant account. Similarly, an international merchant account can do the same thing if you are held to local tax laws there instead of to US tax laws. Whether you go with an international merchant account or a domestic one, do your homework. A domestic merchant account might be your best option if your credit rating is in good standing, you've been in business for least 12 months and you can prove your solvency. If not, then an international merchant account might be a better bet for you, since many of their set up requirements are much less stringent, and they often don't even require a deposit. Of course, you have to look into your tax liabilities with an international account versus a domestic one, so you need to do your homework and will of your options before you choose one or the other. Your domestic options (as opposed to international options) include setting up your own merchant account through a bank, using an intermediary to set up one for you, or using a third-party service. All of these have benefits and drawbacks. If you set up your own merchant account, you have to be able to prove you are a good risk for the bank you're dealing with. An intermediary may be able to help you set up an account and get you a better deal than you could on your own, because they're used to dealing with banks and know how to manage them. The third option is to use a third-party service. Some third-party services also deal internationally, although most of these third-party services also now deal with currency exchanges with no problem, so that this is not the problem it would have been several years ago for US-based businesses, for example. Whether you choose an international merchant account, a domestic one, or whether you use an intermediary or third-party service, make sure you research all of your options and choose carefully. Oftentimes, an international merchant account will be a good option for you, but again, you'll be subject to the local laws there and may not have as much control over what happens as you would with a domestic one. Again, each of these types of account has advantages and drawbacks, so it's up to you to do your own research and make a decision based on what you find.
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Nick Hurd is the CEO of 1CartPlus a hosted shopping cart that is easy to set up for beginners and provides all the tools that a professional online marketer needs to compete effectively in todays competitive online world. Your Shopping Cart and Ecommerce solution - 1cartplus.com Copyright 2007 1cartplus.com
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