Today I will go through alternatives to merchant accounts which are suitable for high risk offshore businesses.
There are payment methods and payment service providers (PSPs) that are more likely to accept high risk ecommerce.
Speedcard is an e-wallet like solution from the well-known offshore bank FBME, featured in a previous post titled The Best Offshore Banks 2012.
It is used mostly as a payout method for gambling merchants into high-risk territories or countries that block gambling.They do however accept regular ecommerce in an attempt to branch out.
Customers must sign up with Speedcard in order to make a purchase. New accounts are given a 500 EUR spending limit. This limit can be raised by sending in a copy of ID (ID card, driver’s license, passport) and a copy of a recent utility bill as proof of address. The limit is then increased to 1,500 EUR per day. Even higher limits are possible upon request.
The major drawback of Speedcard is that customers cannot use the same Speedcard account with more than one merchant.
Speedcard customers can request Visa cards tied to their account: either virtual or plastic. These cards are issued by FBME. They are not anonymous.
Merchants get access to a rudimentary but powerful enough backoffice. Settlements can be sent to any bank in the world. It is not necessary to have an account with FBME to become a Speedcard merchant, though they are more likely to accept you if you do. Customer service is mediocre.
EUR is the only supported currency.
EcoCard offers an e-wallet and are almost indistinguishable from Moneybookers (Skrill) and Neteller, except for the fact that that they have a greater risk appetite, largely owing to the fact that they are small and need more business.
EcoCard’s transaction fees are higher than their competitors’, both for customers and for merchants.
Customers are limited in how much they can transfer before being required to send in documents to verify themselves (copy of ID and proof of address).
EcoCard is a product offered by PSI-Pay Ltd, which is fully licensed by the FCA (formerly FSA) in UK. Customer service is actually quite good, both for merchants and for customers.
Like other e-wallets, EcoCard generally absorb chargebacks as long as your chargeback ratio is tolerable.
EntroPay is a product by Ixaris Ltd, an English-Maltese company.
They offer both an e-wallet solution as well as prepaid virtual cards. EntroPay virtual cards are issued by Bank of Valletta (BOV) in Malta and are anonymous.
KYC documents (copy of ID and proof of address/utility bill) are required for nearly all new sign-ups, and quickly become required for other customers.
EntroPay used to offer prepaid plastic MasterCard cards, issued by Transact Networks in Gibraltar. This ended in June 2012 and EntroPay has since then been working on finding a new solution for plastic cards. It was announced in February 2013 that they would soon go live with a new solution. Since then – nothing.
Using EntroPay is expensive both for customers (4.95% top-up fee) and merchants. Customer service is good.
The oldest of the Big Three, WebMoney has a huge presence in Russia and neighbouring countries, where cash is king and customers can exchange cash for WebMoney currency. It has never managed to penetrate other markets successfully, presumable because cash is less prevalent in Western Europe and North America.
Unlike the now shutdown Liberty Reserve, WebMoney is run by a publicly known company and its owners can be held responsible, albeit in Russia.
Similar to Liberty Reserve, WebMoney currency is bought and sold via exchangers.
Customer service is quite good; some broken English but overall helpful and timely.
Paysafecard and Ukash
These two are so similar I’m putting them together. They are prepaid vouchers that customers buy at convenience stores, supermarkets, gas stations, or online. The customer gets a paper slip with a code on it, which the customer then enters as he checks out when completing a purchase on a merchant’s side.
Paysafecard is strong in central and continental Europe. Ukash is bigger in UK, Ireland, and Scandinavia. Ukash has a better reach outside of Europe.
Both are very expensive for the merchant but are popular with customers who wish to pay anonymously. It is effectively an online cash payment.
Western Union and MoneyGram
Again, two very similar products. Western Union is significantly larger than MoneyGram, which in turn has a bit lower fees and more lax controls.
Both are expensive and cumbersome for both customer and merchant. However, they are extremely popular in lesser developed countries, such as Africa or the poorer regions of Asia, where banking is not as developed.
There are many more alternative payment methods and PSPs. Below is a brief list of some the adamant ecommerce entrepreneur may want to look into:[ws_table id=”21″]