and assuming they can’t, when did this suddenly happen?
Though opening a high risk merchant account today, sure looks like a mission impossible, in no way did this suddenly happen.
Hardening the banking industry in general and the credit card processing industry in specific is an on-going process which started with the MSB witch hunt, causing hundreds of Money Services Businesses to seek none US banking solutions, continued with illegalizing online gaming to its current pick, caused by the Subprime Crisis from which America is yet to recover.
As online gaming (happily processed out of the US) had to find none US alternatives, it opened the door for new offshore merchant account initiatives and offerings. Once hit by the Subprime Crisis, reducing bank capital and eliminating large part of America’s credit availability, banks had to carefully pick, or occasionally stop extending, lines of credit.
As providing acquiring services is another mean of credit line, acquirers were forced to adjust to new industry standards and started implementing same hardening restrictions, getting US high risk processing to where it is today.
Offshore merchant account providers were only waiting for this opportunity, to gain control over an additional portion of US businesses processed out of the US.
As merchants are left with no other choice, they apply for offshore credit card processing, and get their processing needs elsewhere. It is perfectly legal and practically, for some high risk merchants, the only way to sustain their online business.
The US ends up losing higher processing fees paid by local merchants to offshore merchant account providers.
Gidi Argov, Founder and CEO
www.CreditCardProcessing-r-us.com
