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US bank account vs. online solutions - things esellers need to consider

Posted by MoneyNet Staff on February 20, 2017

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Introduction - bank account vs. online solutions 

E-commerce has become a lot easier to set up for new sellers over recent years. It used to seem very complicated and inaccessible to those on tight budgets and without professional expertise. Thankfully, a wave of innovative software and service providers has come along to make things a lot easier for people all over the world. It’s never been a better time to join the global e-commerce marketplace. 

One of the key areas that has seen improvement as regards accessibility is payments solutions.

Let’s take a look at the main considerations for foreign sellers doing business in the USA, and in particular whether they must set up a business entity in the USA, and whether it’s possible or indeed necessary to get a US bank account.

The Payment Processor Option 

With the range of specialist services available, it’s completely viable these days to do business an an e-commerce seller in the American marketplace without being registered as a business in the USA, and sometimes without having a United States bank account. Here’s how. 

You can establish a merchant account with a payment processor, which will enable you to take credit card payments and send funds to your bank account outside the USA. Companies such as MoneyNet specialize in such services and are fully accredited to provide merchant solutions internationally. They can even help you open a US bank account under your own name. 

Having a merchant account with such a solution provider will tend to give you the best rates, compared to services such as PayPal which are known as “aggregators”. Aggregators do not provide you with your own merchant account for credit card processing, but instead use their own accounts to process your funds. They can be easier to set up for new e-commerce sellers, but keep a careful eye on the transaction fees they charge as they can work out to be more expensive for many businesses, especially as they get established in the e-commerce space.

Options For Amazon Sellers

It’s worth taking note particularly of how things work out for sellers in the USA’s biggest e-commerce marketplace, Amazon.com. It’s commonly thought that it’s 100% necessary to open a US bank account in order to sell on Amazon – however, that’s something of a misconception. Amazon will in fact allow foreign sellers to open an account, and can remit funds directly to bank accounts in a number of countries. Specifically, those countries with banks compliant with ACH are all included, and that includes the EU nations, Australia, Canada, and a number of others. There is a secondary list of countries not which are not ACH-compliant, but with whom Amazon can remit payments via third parties such as MoneyNet.

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Benefits and Drawbacks of Opening a US Bank Account For International E-commerce Businesses

Even if you are based outside the USA, opening a US bank account for use with your online store might still be possible and have some benefits. For one thing, you will be able to accept payments from US-based customers with maximum ease. Your selected merchant service provider is likely to give you the very lowest rates on transactions which take place entirely within the US financial ecosystem. 

In addition, at the other end of the business process, you will be able to pay suppliers based in the USA without the additional expense of international transfers and currency conversions. You will be able to make simple domestic wire transfers with very low costs, protected by the security of the ACH (Automated Clearing House) system. 

Another possible reason for opening an American bank account is as a natural part of your business plan to establish a virtual presence in the US, which can aid in building your company’s credibility and presence in the overall marketplace. If you are incorporated and have a US address, and so on, this has traditionally been seen to aid your growth, especially in regards to selling to US consumers. However, in the increasingly international marketplace of the present, this is becoming less of a disadvantage. The truth is that there are fewer and fewer barriers to for international sellers these days, whether or not they have a US bank account.

How To Open a US Bank Account

But if that is the option you choose to take, there are some prerequisites to bear in mind. In order to open a US bank account, there are a few different avenues, including visiting the United States in person, or using a reputable service to help you open the account. One way is to incorporate, or otherwise establish a business entity in the US. From there, the main thing is to establish your identity with the bank – usually two pieces of photo ID are necessary.  It is also possible to establish a bank account without even registering a business in the USA. There are now ways to to this without physical entry to the USA, especially if you have professional assistance. 

One option that some have had success with is opening an account online with a US bank, even from overseas. This can be possible with some banks, but you may need to have a US SSN (social security number), or alternatively, an ITIN (Individual Tax Identity Number). MoneyNet can offer professional help for those who would like to take this kind of route.

US Bank account vs. Online solutions - Conclusion

Observers of e-commerce who have been in the business since the earlier days can’t help being impressed by the flexibility made possible by modern financial service providers, and the rapid expansion of options in e-commerce. Thanks to all of that, the US bank account issue is no longer the big problem that it once was. And that applies whether the business is transacted on Amazon or another platform, including an independent store. 

In fact, using a merchant account solution provided by one of the specialist firms provides many advantages including highly competitive rates, and expertise which is specific to e-sellers in that situation. In addition, you don’t have to be registered as a business in the USA. Opening a US bank account can be a complex process, so make sure that before embarking on such an endeavor, you take a look at the modern and flexible financial products that are available. Help is available to make sure international sellers get all the benefits of a US bank account without the difficulty and expense that used to be part of the process.

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Topics: ecommerce