View Full Version : Inside information needed regarding acquiring
02-25-2005, 09:38 AM
I am just wondering, are U.S. acquirers also only allowed to contract businesses from the U.S.? What about merchants in South America, Asia etc. As far as I know, there aren't any acquirers there and there are lots of U.S. acquirers that will accept these businesses if they have an U.S. bank account.
It is a mandatory requirement to be located in Europe to be accepted as a merchant processing credit card transactions via a European acquirer as an acquirer may solely contract businesses located in the European region as defined by the credit card organisations. The merchant company must be located in Europe and a European owner / signatory must be named.
Has all this only to do with the Patriot Act? What about 2CheckOut? They accept companies from Europe, right? I am very confused here...
02-25-2005, 11:26 AM
An American processing bank has the requirements that the businesses that they cater to must reside in the US. This is more of a Fraud prevention thing than anything else, but it also has to do with FCC and FTC regulations. Also American banks allow resellers called ISO's or MSP's. Foreign banks control all of the processing in their areas. Its more or less big banks that don't want to give up any money or power. Also American credit cards use the AVS for address verification which wont work with international credit cards.
If you are in Europe or any other country, you have 2 choices. Process through a local bank that has merchant services, or go through an offshore provider. Either way you are looking at fairly high processing fees, usually 5% - 10% / transaction with a $1 - $2 per transactions fee. You aren't restricted to European only processors.
2Checkout, Paypal,Ikobo and others are called Third Party Processors. They process the transaction for you and then deposit the money in your bank account. Their fees are comparable to your other options, but probably have a much lower startup cost.
It doesn't have anything to do with the patriot act, its more of a financial monopoly held by foreign banks that they don't want to give up.
02-25-2005, 03:05 PM
Are you talking merchant account or third party processing?
You can get a merchant account from a United States MAP if you have at least a United States bank account and a United States address. The processing discount rate usually starts at about 4%. And there is usually a 5-day ACH hold as well as a $10,000 limit monthly.
For third party processing or merchant accounts not in the United States, you are looking at starting about 3%. It all depends on what you are selling and where you are located.
For the processors that do support "foreign" merchants that meet the criteria - it reminds me of the don't ask, don't tell policy from the military
02-28-2005, 04:26 AM
Well, third party or direct is not the issue here, as it seems that third party processing is no longer allowed in Europe. Most third party processing companies in Europe need to connect their European merchants directly with their acquirer and can no longer process for U.S. based companies or companies located outside Europe from what I understand.
So, my question is: Do third party processing companies in the U.S. have the same issue? Are they only allowed to accept U.S. businesses and do they need to connect them directly through an acquirer? I mean, 2CheckOut is still doing it and I know that MasterCard is normally not allowing this because of the cross border requirements. This is giving them an unfair advantage unless they work with an offshore acquirer, who is not bound by the Visa/MasterCard U.S. or Europe rules.