'Digital nomads' have options for transactions abroad

Check the individual rules of countries and how best to tap your U.S. bank funds

By  |  Published: January 9, 2017

Your Business Credit
Your
Elaine Pofeldt is a journalist whose articles on entrepreneurship and careers have appeared in Fortune, Working Mother, Money and many other publications. She is a former senior editor at Fortune Small Business magazine and an entrepreneur herself, as co-founder of 200kfreelancer.com, a website for independent professionals. She writes "Your Business Credit," a weekly column about small business and credit, for CreditCards.com.

Ask Elaine a question or read her prior answers in the 'Your Business Credit' archive.

Question Dear Your Business Credit,
I am a “digital nomad” who travels while running a business in other countries. Bank of America used to allow processing international transactions when you are outside the U.S. Are there any other banks that will allow you to be a nomad and receive transactions while overseas? – Ronald

Answer Dear Ronald,
Congratulations on building a digital business that allows you the freedom to travel. Many people dream of starting a location-independent business, thanks to books such as “The 4-Hour Workweek” by Timothy Ferriss, but not everyone figures out how to live the life.

It should not be hard to find the services you need.

“Most acquiring processing banks will allow for international transactions to be conducted regardless of where the business or digital nomad is at that time,” says George Csahiouni, co-founder of TransMerit Merchant Services, a Los Angeles company that focuses on customizing processing solutions for retailers and businesses, in an email.

“The bank will look at where the originator’s bank account is set up and deposit the transactions into that account versus where the business or person is physically.”

Generally you have to pay more to process international e-commerce transactions than if, for instance, you were selling products in a brick-and-mortar store in the U.S. “Some of these accounts are considered to be high risk, depending on the goods or services being sold,” Csahiouni said.

If you go this route, I would recommend asking any digital nomads you know who process international transactions to recommend an independent processing company that is willing to customize its approach to the needs of owners like yourself. It is important to find one that is very reliable if you will be traveling and want to avoid wasting time on hassles with your merchant processing account.

Of course, if you will need access to funds that are deposited in a U.S. bank, you will need to speak with your bank about how best to access those funds. It may be as simple as going to an overseas branch of the same bank, but in some cases, you may need to have the money wired.

A customized merchant account is not your only option. When I ran your question past Andrew Youderian, who runs eCommerceFuel, a private community for independent e-commerce store owners, he suggested using Stripe after consulting with some of his members. “Stripe is a company that has vastly simplified accepting credit card payments online and processing international payments, as well,” Youderian said in an email. PayPal, which offers a similar service to Stripe’s, is another possibility. PayPal supports 202 countries, while Stripe supports 25.

Of course, you will need to do some careful comparison shopping among any services you consider. Find out which one will offer you the best rates and the level of customer service you need.

Make sure you also do your homework on current payment customs in the countries where you plan to do business. Credit card usage is not as common in some countries as it is in the U.S., so you may need to offer other options as well. For instance, Bangladesh limits an individual’s credit card usage with an annual limit on credit card spending.

Be sure to find out if any of the countries where you plan to do business have placed controls on the inflow or outflow of currency. A good merchant processor who is active internationally should be able to give you some insight. You don’t want to find yourself in a situation in which you’re eager to explore a new country but have no cash – because customers who owe you money are unable to send it to you. Doing a little research now will allow you to enjoy your travels without giving much thought to your merchant processing.

See related: 7 tips for using online alternative business lenders, Mailing goods to a customer? Require a signature

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Updated: 10-22-2017

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