Offshore PSP vs Local PSP

During my 13 years of experience I have used around 10 different credit card and online check processors. Only two of them were offshore. one of them (based in London) bankrupted in year 2000. There were $40000 in the account. The other one I still use (Zombaio, which I think now is own by a company based in Cyprus). What I have discovered is that using an offshore processor is not as risky as it looks as far as this is not the only processor you are using. The advantages of using an offshore CC processor are the lower transaction fees and no VISA or MC yearly registration fees. The disadvantages are delay in payments, risk of bankruptcy, bad customer service. BTW these disadvantages are also valid for some local PSPs, for example iBILL, based in Florida bankrupted in 2001 and I lost around $3000.

The local (USA based) Payment Service Providers are larger and more stable companies. Their customer service is great and they send the payments on regular basis. The disadvantage is the way higher transaction fees.

Now all these different PSPs offshore or inshore have differences regarding the payment options they offer to your customers and the way they transfer your money to your account. I will cover these differences in another article.

Based on the security and reliability I would suggest that you start with a local PSP and expand later to an offshore one as a cascading billing option.


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