What is merchant account?

By all means selling online gives exciting benefits, such as exposure to worldwide audience, saving administration costs, and many more. If you conduct your business on line and sell your products and services via internet, then you are called a Merchant. You need to accept payments from your customers on your web-site, then you need a merchant account.

A merchant account is not your regular corporate account for transactions, savings and withdrawals. As a matter of fact, you don't have much control over the merchant account, which clear purpose is to accept credit card payments. The 2 accounts then – merchant and corporate – work together in cluster. The merchant account after collecting payments from online deals will transfer the money to your company's corporate account. The corporate account of your company is the one you really operate with.

The banks that set-up merchant accounts are call acquiring banks. In fact, not only banks can be acquires. Other financial service companies can process credit card payments (often they got to have license for processing).
For your online business you may choose one of the following models:

  • Offshore company + offshore merchant account. Belize, Seychelles company with Belize or Seychelles bank, for example)
  • Onshore company + onshore merchant account. Ireland, Malta, for example with merchant accounts in European banks.
  • Offshore company + onshore merchant account. This is the most popular and practical model. Although, among low tax jurisdictions more reputable EU structures are to be chosen – Scottish LP or Gibraltar Ltd., for example.

By choosing offshore company with offshore bank account client might have a better confidentiality feeling. But it must be noted that offshore merchant account often have much higher administration and transaction costs than Latvian merchant accounts. Is it worth paying double? It is up to you to decide.

Here are few reasons why exactly Latvian merchant account with low-tax European company responds to the wish list of the modern online business, especially when targeting European markets:

  • Merchant account at EU bank
  • Quick to set-up
  • Lower processing fees of the merchant account
  • Quicker transactions of the merchant account
  • Multi-currency accounts
  • Low administration costs and 0 % tax of the EU Company (Scottish LP, Gibraltar)
  • Merchant account and corporate account are in the cluster with the same bank insuring better correspondence between the two accounts and easier agreement terms. By all means it is more beneficial than acting via an intermediary.

Merchant account fees

First of all, the merchant account fees will depend on the business activity of your company (what type of services and products you sell, their prices, delivery conditions and etc.) Transaction fees will be negotiated with the bank.

Other fees and conditions that will be agreed between your company and the bank are:

  • Administration fee
  • Charge-back policy (in case your client asks money back)
  • Rolling period (will define periodicity when money from merchant account is transferred to your corporate account. For example, once a month or every second week)

The above fees strictly depend on the type of business you conduct. Upon review of your application we will provide you with preliminary fees. All fees will be later on updated and confirmed with you when you enter into agreement with the bank.

Requirements to open merchant account

In order to apply for a merchant account you must provide us with the following information:

  • Web address of your web-site. It must be an actual working web site. The web site must provide clear idea of your services and products, prices, delivery and return policy, contact information.
  • Description of your business. Either a business plan and free-form description of your company activity, products you sell, your clients and vendors, planned turnover and planned income, number of transactions you plan to have, etc.

If you are starting trading online, opening merchant account with Latvian bank, will be a smart decision. We shall be happy to help you set-up the most efficient structure, to open a merchant account and to negotiate best transaction fees. Contact us.


  • Open corporate and merchant account for your online business remotely
  • Prepare company and client profile to suite requirements of the bank
  • Prepare quote of bank charges, fees and policy

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