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BANKS PROMOTE CAPITAL FORMATION FOR OFFSHORE MERCHANT ACCOUNT HOLDERS

In any Merchant Account, capital occupies a position of crucial and strategic importance. The bank plays an important role in removing the deficiency of capital by stimulating savings and investments. A sound banking system helps in mobilisation of the savings of the merchants and makes them available for investment in productive merchandise industries. No economic development of sizeable extent in merchant account is possible unless there is sufficient degree of capital formation.

Capital is must in all businesses. Capital is also considered as life-blood of any business. Banks help a lot in pushing up small business to a certain height by giving financial help and also by promoting capital formation. There are other non-banking financial institutions that also provide monetary help. But these financial institutions charge a higher rate of interest than the banks. Merchant account is maintained with lots of withdrawals and deposits and also various other transactions. Credit card processing is an example of a merchant account. In modern days, going to the bank for making transactions like withdrawal is eliminated. These services are replaced by e-commerce and electronic banking systems. Internet is used as a main medium for such kind of transactions. But it is also important to visit banks sometimes to make deposits into the respective account.

Merchant account is accessed at any time of the day. A high level of technological support is needed in the background. Merchants usually accept credit cards to receive payments from the customers. Banks perform two important functions in the capital formation of merchant account holders. They are: (a) Banks attract deposits by offering attractive rates of interests and thus converting savings which would have remained as immobile capital into active capital; and (b) The banks distribute these savings through loans amongst the merchant account holders which are directly or indirectly connected to economic development. Bank plays an important role in encouraging savings and making merchandise business stand firmly in the poorest market situations. The merchants also find satisfaction in the offers provided by the banks. This improves the bank and merchant relationship.

It is the customer who saves hardly 5 percent of the national income. The more savings are done, the more capital formation improvises. To secure a reasonable level of development, the common people should save at least 12 percent of the national income. A small rate of saving does not permit large investment in merchant accounting system. A merchant should always be ready to face even the worst situation that may come in the economy which is very uncertain and un-predictable in nature. Banks also act as a backbone to any monetary terms and dealings. The banks provide financial assistance in the establishment of various businesses. It is difficult to see how, in the absence of banks, small merchandise business of various merchants could be made possible or mobilised. The capital deficiencies in any merchant account are the serious handicaps in the development of any economy. These deficits in financing of the merchant business are covered up by the banks. Thus banks helps in promoting capital formation for merchant account holders.

Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.