Opening a merchant account for international business
International merchant account is designed for companies that process international payments and have customers worldwide. This type of account also supports multiple currencies and processes payments from different countries.
Opening an international merchant account allows your business to expand its customer base globally. It also provides convenience and flexibility in processing international transactions and can help reduce currency conversion costs.
How international merchant account works
- International Payments: When a customer from another country makes a purchase or payment, the payment data is transmitted to the international merchant account.
- Currency Conversion: If the payment is made in a currency different from the merchant's, currency conversion occurs. The bank or the payment provider connected to the merchant account can implement it. The provider or bank determines the currency exchange rate.
- Payment Authorization: The payment gateway connects with the customer's bank to obtain authorization for debiting funds from their card or account in another country.
- Transaction Processing: The international acquiring bank verifies and processes the transaction similarly to a regular merchant account. It checks for fraud and compliance with payment security requirements, and confirms the transaction.
- Fund Settlement: After successful transaction processing, the funds are settled into the international merchant account of the seller. There may also be a delay associated with processing and currency conversion.
- Commission Deduction: The bank or payment provider deducts a commission for processing the international transaction. The commission may vary depending on the provider's or bank's agreements.
- Transfer to Main Account: After the commission deduction, the remaining amount is transferred to the seller's main bank account. After that, it can be used for managing the business and conducting further operations.
Requirements for opening an international merchant account
- Company Identification: You will need to provide documents related to your company registration, articles of incorporation, and other information confirming the legitimacy of your business.
- Banking Documents: The bank you work with to open the international merchant account may require various banking documents such as bank statements, banking references, and evidence of your financial stability.
- Identity Documents: You may need to provide identification documents and passport details of the company owner or individuals responsible for managing the merchant account.
- Business Plan: Sometimes, the bank may request a business plan explaining your activities, the market you operate in, and financial forecasts.
- Compliance with Rules and Regulations: When opening an international merchant account, it is important to comply with all local and international rules and regulations, such as Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations to prevent money laundering.
- Partnership with Payment Provider: You may need to choose a payment provider or gateway to process payments and connect with your international merchant account.
If you need assistance opening an international merchant account, please contact IT-OFFSHORE specialists.