high risk payment processor or start a company in europe?

[loti]

hello everyone, i run an adult classifieds site (i formally offer advertising space on my site)
my site is aimed at european customers. currently we only accept bank transfers but we would like to put the option to pay by card.
the problem is that we are a llc registered in the united states.
The problem is that since I have this type of site (adult ads), that I am an LLC, with the ubo not in the us ( the ubo live in Brazil, but has an Italian passport), and that I work with a European audience, well these 3 elements together are not favorable to be accepted by classic processors.
despite having a turnover of 80k usd per month, my chargeback rate, 0.037 % in the last 6 months (all provable)
I can't find any processor that suits my purpose
I have tried some of the payment processors proposed here on the forum including

Instabill no becausethe ubo don't live in the USa
Emerchatpay no because I'm USA society
PaymentCloud no escort
High Risk Pay tell that can't support my business
zenpayments don't accept payment processors in Europe
verotel: no because i' m in a us company

I think the best thing to do is to open something in Europe, so that I can use any payment processor like my competitors do in Europe (I have already checked the payment processors that most escort ad sites use in Europe and practically all of them do not work with US companies)
The problem is that you will run into a lot of bureaucracy, but I don't think I have any other solutions.
At this point my questions are 2:
1) Does anyone have any idea of a payment processor that can accept US companies and process payments in euros?
2) What could be the best form of company to open in Europe with the least bureaucracy possible?

Thanks everyone

Last edited: Jan 19, 2025

 

[daniels27]

Yes, the problem is that by law, you can only process payments in the US as you are a US company. I am not sure where you live. But is you live in Europe and need to pay tax on your US turnover, you need to register your company at your place of residence, you can then apply for a European processor.

In all other cases, you need to do it like all US companies processing large volumes in Europe and have an Irish company processing payments for you.

Also note that you would have to charge and remit VAT on all your sales.

Are you making 80k USD in 6 months? That is very, very low and not many processors will have big interest in you. To be frankly honest with you. In any case, you may want to register an Estonian or Irish company as Lori Payment Services Limited and then use them to process payments. It has a big overhead and really only makes sense for 1M or more annually. But if you have spare time, you can do it yourself and you may find yourself in peace.

 

[DeepDrilling]

You can make it very simple with a UK LTD - and where in the law does it say he is only allowed to process payments in US ? interesting ?

 

[daniels27]

DeepDrilling said:
You can make it very simple with a UK LTD
Click to expand...

It does not make much sense as the payment fees are higher than EU and and EEA payment received will be considered cross-border and cost both him and his customer up to 3%. An Estonian company does not cost much more than a UK company if he manages it himself.

https://usa.visa.com/dam/VCOM/globa...ding-proper-location-of-merchant-business.pdf

If you provide merchandise or services via mail, phone, in-app or the web, then your location must be the country of your principal
place of business.
Click to expand...

In reality, no serious payment processor will accept you for a EU merchant account just because you are targeting EU customers. There are exeptions but without any registration of your business, you won't get far in Europe.

DeepDrilling said:
and where in the law does it say he is only allowed to process payments in US ? interesting ?
Click to expand...

It is a visa / mastercard rule. You can only have a merchant account in the country your company is registered. Only exception is that Canadian companies may process in the US under cetrain circumstances. That's why all bis US companies are processing in Ireland.

 

[loti]

daniels27 said:
Yes, the problem is that by law, you can only process payments in the US as you are a US company. I am not sure where you live. But is you live in Europe and need to pay tax on your US turnover, you need to register your company at your place of residence, you can then apply for a European processor.

In all other cases, you need to do it like all US companies processing large volumes in Europe and have an Irish company processing payments for you.

Also note that you would have to charge and remit VAT on all your sales.

Are you making 80k USD in 6 months? That is very, very low and not many processors will have big interest in you. To be frankly honest with you. In any case, you may want to register an Estonian or Irish company as Lori Payment Services Limited and then use them to process payments. It has a big overhead and really only makes sense for 1M or more annually. But if you have spare time, you can do it yourself and you may find yourself in peace.
Click to expand...

sorry I added the information, 80k of turnover are monthly, the owner of the LLC lives in Brazil but has an Italian passport if it can help.

 

[DeepDrilling]

daniels27 said:
It does not make much sense as the payment fees are higher than EU and and EEA payment received will be considered cross-border and cost both him and his customer up to 3%. An Estonian company does not cost much more than a UK company if he manages it himself.
Click to expand...

say what? where do you have this information from ?

daniels27 said:
It is a visa / mastercard rule. You can only have a merchant account in the country your company is registered. Only exception is that Canadian companies may process in the US under cetrain circumstances. That's why all bis US companies are processing in Ireland.
Click to expand...

you said by law, I'm very aware of that it is a rule by the card association, but it could be that you have found a new law in the US, no one knows.

And to archive the Visa / MC regulations you can simply use a 1£ UK LTD no need to make it much more complicated than this!

 

[loti]

I don't worry too much about VAT, if the processor allows it, I'll charge it to the users, since 90% of my site users are non-EU customers, when they enter their non-EU billing address, they will not pay any VAT.

 

[daniels27]

DeepDrilling said:
you said by law, I'm very aware of that it is a rule by the card association, but it could be that you have found a new law in the US, no one knows.
Click to expand...

Laws of Visa and MasterCard. But from that perspective, you are right. No government law afaik. Thanks for pointing that out.

DeepDrilling said:
And to archive the Visa / MC regulations you can simply use a 1£ UK LTD no need to make it much more complicated than this!
Click to expand...

Yes, you can but when you have a UK processor, which costs more than a EU one.

Last edited: Jan 19, 2025

 

[daniels27]

DeepDrilling said:
say what? where do you have this information from ?
Click to expand...

Sorry, which information do you mean?

1. The Estonian company costs about 100 EUR yearly. UK companies are about in the same order.
2. EEA has lower interchange fees than UK has. You can get better pricing for EEA companies than for UK ones in gerneral. In any case EEA-UK and UK-EEA is considered cross-border and you as well as your clients may be subect to a surcharge.

 

[daniels27]

loti said:
I don't worry too much about VAT, if the processor allows it, I'll charge it to the users, since 90% of my site users are non-EU customers, when they enter their non-EU billing address, they will not pay any VAT.
Click to expand...

You mean they are Germans but you tell them to enter an address in the Bahamas to avoid being charged VAT even though they are using a German IP and use a German debit card?

Fairly illegal, read 2.1.3 here
https://taxation-customs.ec.europa....information_microbusinesses_euvat_2015_en.pdf
You need to have two pieces of non-contradictory evidence of the customer's loction. His nullshit address in Pitcairn or North Korea is most likely fake.

If you get a European payment processor, you should start charging. Check CESOP.

 

[loti]

daniels27 said:
You mean they are Germans but you tell them to enter an address in the Bahamas to avoid being charged VAT even though they are using a German IP and use a German debit card?
Click to expand...

no i wont tell them anything. it's just the truth, 90% of people who use my ad site are south americans, they usually come to europe for a few months to work as escorts and then go back to their country.
however if the processor allows it, I will charge the VAT to them so I will not be the one to pay it in any case

 

[DeepDrilling]

daniels27 said:
Sorry, which information do you mean?

1. The Estonian company costs about 100 EUR yearly. UK companies are about in the same order.
2. EEA has lower interchange fees than UK has. You can get better pricing for EEA companies than for UK ones in gerneral. In any case EEA-UK and UK-EEA is considered cross-border and you as well as your clients may be subect to a surcharge.
Click to expand...

I'm not talking about an Estonia company, that's you bringing it up, if you even read what you're writing in your eagerness to boost your post count!

I'm talking about a UK LTD, where you can get the same processing rates and fees as with any other company in Europe.

The UK is not in the EU, but as far as I know, it's still part of Europe, meaning you have the same opportunities.

Where did you get that nonsense from in point 2?

 

[daniels27]

loti said:
no i wont tell them anything. it's just the truth, 90% of people who use my ad site are south americans, they usually come to europe for a few months to work as escorts and then go back to their country.
Click to expand...

Ok, thanks. Now, we get a more complete picture. In this case you don't need to care as they will be using South American cards. Also, you won't have to care about the customers losing money on cross-border fees with their credit card. Just use a UK Ltd. or Estonian company for payment processing. You can basically forward all charges with a deduction of anything less than 2% on the net payout to your US LLC. Pay some tax on 1000 EUR per year, not more.

 

[loti]

daniels27 said:
Ok, thanks. Now, we get a more complete picture. In this case you don't need to care as they will be using South American cards. Also, you won't have to care about the customers losing money on cross-border fees with their credit card. Just use a UK Ltd. or Estonian company for payment processing. You can basically forward all charges with a deduction of anything less than 2% on the net payout to your US LLC. Pay some tax on 1000 EUR per year, not more.
Click to expand...

yes the idea is exactly this, have the company in Europe and forward the charges to the LLC.
at this point I just have to evaluate which could be the simplest company to open and manage without too much bureaucracy

 

[daniels27]

DeepDrilling said:
I'm talking about a UK LTD, where you can get the same processing rates and fees as with any other company in Europe.

The UK is not in the EU, but as far as I know, it's still part of Europe, meaning you have the same opportunities.
Click to expand...

No, the EEA rules no longer apply to UK. Hence:

Over the course of 2021 and 2022, Mastercard and Visa raised their cross-border interchange fees fivefold from 0.2% to 1.15% for debit cards and 0.3% to 1.5% for credit cards. The PSR finds that this was harmful to the interests of UK businesses and ultimately their customers.
Click to expand...

There is now a new law in place in the UK limiting fees again since December 2023. However, cross-border transactions typically are not part of those agreements, meaning that Visa and MasterCard can pretty much charge what they want. It ultimatively is up to your negitiating skills what deals you can get. But in general, you can lower processing fees in EEA like Germany, etc. than you do in the UK.

@deepdriling why attacking me? This is a discussion about facts. Have I ever attacked you here?

 

[daniels27]

loti said:
yes the idea is exactly this, have the company in Europe and forward the charges to the LLC.
at this point I just have to evaluate which could be the simplest company to open and manage without too much bureaucracy
Click to expand...

You may also want to check where you can get what deal on processing fees. With 80k per month, you may be able to get under 2% for cross-border.

What currencies are you invoicing in? Note that you can easily lose another 3% on fx if you are requesting payout in another currency than your companie's country currency.

 

[loti]

daniels27 said:
You may also want to check where you can get what deal on processing fees. With 80k per month, you may be able to get under 2% for cross-border.

What currencies are you invoicing in? Note that you can easily lose another 3% on fx if you are requesting payout in another currency than your companie's country currency.
Click to expand...

all my clients pay in euros.
since we will choose a processor in europe the idea would be that the processor accepts euros without making value changes.
Then if we had a ltd in england it would be great to have a multi-currency account so that the processor can pay me in euros without having to convert them into pounds. after that we will only have to do the euro dollar exchange to send them to the llc.
Of course on one hand it would be better to have a company in the euro zone so as to only have to deal with the euro dollar exchange without further costs. but I evaluate all the proposals.
for this reason I asked to the friends of the forum for advice, on what could be the best and above all less bureaucratic solution

 

[daniels27]

Estonia would be an option. UK with stripe would work to it they like your website (tip: they only check once).

 

[loti]

.

 

[loti]

daniels27 said:
Estonia would be an option. UK with stripe would work to it they like your website (tip: they only check once).
Click to expand...

I'm sure that stripe doesn't accept my type of site. I already have some classic processors that use the other escort ad sites in Europe that shouldn't have any problems accepting me, the only thing is that the company is required in Europe or England
And i dont would use cloacking