Many international entrepreneurs, they get the surprise when they discover that even after forming a Delaware LLC and obtaining an EIN, getting that ITIN, and opening a US business bank account, they still do face challenges in getting a payment processing account. While these steps definitely establish that the business is a legitimate US company, but the payment processors and acquiring banks, they evaluate things more than just the corporate registration document when they assess the risk.
The primary challenge is compliance.
Payment providers, they must satisfy strict KYC, anti-money laundering, and fraud prevention requirements. As a result, underwriters, they typically verify the identity and residential address of the business owners. They review the nature of the business. They analyze expected processing volume and also assess the likelihood of disputes. They also check the possibility of chargebacks and other regulatory concerns that may be associated with the merchant or the merchant’s business model.
For many non-US founders, the requirement for a verifiable residential address always becomes a major obstacle, even when the company itself is established and is tax compliant. The industry classification can make the approval even more difficult. Businesses which operate in SEO, digital marketing, lead generation, consulting, coaching, digital services, SaaS, subscription billing, or online advertisement, are most of the times considered in high-risk category, and this is because the services are delivered electronically, and the customer satisfaction can be subjective, and this may result in high chargeback rates, which is usually higher than traditional retail U.S. businesses. Acquiring banks and payment processors therefore perform additional due diligence before they approve the accounts of such merchants.
Another common misconception is that all payment service providers have identical underwriting rules and standards. In reality, many mainstream payment aggregators they focus primarily on domestic businesses, which are owned by local residents. When an application involves foreign ownership, cross-border transaction, international customers, or industries that are considered medium or high risk, then the automated approval system frequently declines the account before even a manual review happens.
The good news is that the approval is sometimes possible through the right processing structure, dedicated merchant account, international acquiring relationship, offshore payment processing solution, high-risk payment gateways, and specialized underwriting programs. Some of these are designed specifically for businesses with foreign ownership or for those merchants that are operating in high-risk sectors. Many of these solutions may also support major payment methods like credit cards, debit cards, Apple Pay, Google Pay, recurring billing, and even multi-currency processing.
Ultimately, having a Delaware LLC, EIN, ITIN, and US business bank account definitely demonstrate the legitimacy of the company, but acquiring banks definitely evaluate the ownership structure, business model, website compliance, marketing practices, processing history, customer geography, and the overall exposure of risk before they make any decision. For non-US founders in the digital marketing, SaaS, consulting, lead generation, or any other online service industry, working with a payment provider that has got experience in international and high-risk merchant accounts can significantly improve the chances of approval, and they may also provide access to payment solutions that traditional processors may most of the times decline.