Close Menu

    US Payment Processing for Non-Resident Companies

    0
    By on Business

    Money is the lifeblood of any business, so it should flow freely! However, there may be some obstacles on the way, and you should know how to overcome them. An ideal payment processing structure for a US company looks as follows:

    • Payment security is on a very high level
    • Your customers find it easy to use
    • The account closure risk is minimized
    • It can be easily integrated into your selling platform
    • The resulting tax burden for the company is affordable
    • Payments are effectively made and charged to the bank account

    Sounds too good to be true? In this post, we will discuss how to achieve it by avoiding mistakes!

    We would like to invite you to our portal where you will read a more detailed article on setting up payment processing in the United States. You are welcome to explore other topics that may be of interest to you, like asset protection, international banking, offshore business, citizenship by investment, and anything related to money. You can book a free session with our expert to discuss your business issues and find the best solution available in the market. If you decide to delegate all the hassle to us, it would be a wise move as we will set up your payment processing on a turnkey basis! We charge reasonable fees, so do not hesitate to get in touch with us.

    US Payment Processing: Advantages

    • You will have access to secure and seamless payments in US dollars.
    • US customers will be more willing to buy your products and services if you let them use the payment methods they prefer.
    • Your transactions in US dollars will be processed at low rates.
    • You will be able to use popular American platforms (Amazon, Ebay, Etsy, etc.).
    • Physical presence in the USA is not required.
    • You will access American advertising platforms with fewer limitations.
    • Take advantage of easy and low-priced company registration and maintenance in the country.
    • If you carry out operations in US dollars, you will not have to pay a conversion fee.
    • If your company is registered in the offshore zones, like Wyoming or Nevada, you will be subject to low or even zero tax rates.
    • Payment processing from US cards will be connected with less risk, while it will be considered a high-risk activity in Europe.

    Looks great? If you have any questions at this stage, you are welcome to get in touch with us and ask them.

    US Payment Processing: Typical Mistakes

    US banks and payment systems offer excellent opportunities – however, opening an account may be challenging. The problem is that entrepreneurs make typical mistakes that prevent them from enjoying the American payment infrastructure to the full.

    There are three main stages where mistakes are usually made:

    • Company setup stage: choosing the structure, financial institution, and payment solution
    • The state of opening an account (including preparation and submission of documents)
    • Active use of the account after it has been opened

    Let’s consider each stage in more detail.

    Company Setup Stage

    If you want to open an account with a US bank or payment system like PayPal or Stripe, you can fail just because your company is established in Andorra or Russia which are not serviced. At present, Stripe opens accounts for companies from 47 countries and for 3 more if they have an invitation.

    Now let’s imagine you have opened an account with a payment system (and it is a good choice as opening an account with a bank abroad may be much more challenging!). However, there are situations in which you will not be able to take advantage of US payment infrastructure because some processors do not send money to virtual banks.

    Selecting an inappropriate structure is yet another mistake you can make. Imagine an LLC established in the USA whose owner is an offshore company in Belize that belongs to a holding company in Burkina Faso. These are the parameters indicating that onboarding this customer is associated with high risks, and such an LLC is turned down by American banks and payment systems.

    How to take all these parameters into consideration? Well, the best way out is to hire a seasoned expert.

    Useful tip: always check which payment processors will agree to open an account for you before you buy a company (even if it seems to be quite profitable according to documents) or you may end up with a company that consumes your money and brings no profit.

    Opening an Account

    Here are the mistakes you can make at this stage:

    • The content of your website and the description of your goods/services do not match.
    • The bank where your account is opened is not accepted by the payment processor.
    • The payment processor requires the payout method and the bank account to be in the same jurisdiction (in the US, for instance).
    • The company has no website with a description of its products/services.
    • The company cannot provide proof of its legal address in the US.
    • The business owner failed to obtain an ITIN.
    • The processor considers your website to be suspicious or the content on it to be high-risk.
    • You cannot provide a US phone number to verify your account.
    • The owner has no address in the US or local tax number and cannot come up with any alternative solutions.
    • The company carries out business activities that are associated with high risks, being the reason why it is rejected by the card system or payment gateway

    Active Use of the Account

    Payment processors immediately freeze your transactions if they see instantly increasing amounts, dubious operations, or suspiciously changing customer behavior patterns.

    Here are the most frequent reasons why your operations are blocked:

    • The majority of transactions are made by non-US residents.
    • Refunds exceed 1%.
    • Your products/services cost considerably more or less than on average in the market.
    • Payments come from too many countries, especially if these are high-risk destinations.
    • Monthly turnover has risen dramatically (by 20 times, for example).
    • Your business reaches a certain limit (10,000 US dollars a month in most cases), which means that you will need to answer additional questions.

    Please click on the above link to read about 6 strategies to secure payments in the US or get in touch with our expert to find out how to make your payments seamless!