Many U.S. e-tailors shy away from doing business with international customers because of uncertainty dealing with Internet merchant accounts, customs and international shipping, and rules and regulations that differ with each country. But, along with the knowledge and skills that is takes to do business internationally comes an expanded market base that could include the option to exploit unforeseen niche opportunities.
The fact of the matter is that 80 percent of the world’s online population is now outside the U.S., and an overwhelming majority of those Internet users are getting online to shop. When the U.S. dollar falls it can make things harder on U.S. consumers because many of the imported products we purchase become more expensive, but this can be a boon to exporters of U.S. products since overseas markets perceive a bargain in U.S. produced goods when this happens. Expanding your reach to include worldwide markets makes sense in a volatile economy as you can take advantage of economic shifts, instead of being victim to them.
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Even though it may not be strictly illegal to use offshore Internet merchant accounts to accept funds for gambling, it is quite another thing to make payments to players who may reside in the U.S.
34 year old Canadian entrepreneur Douglas Rennick has learned the hard way how determined the U.S. Department of Justice (DOJ) is at cracking down on Internet gambling operations that it considers to be illegal. Rennick was indicted on August 5, 2009 on conspiracy charges for bank fraud, money laundering, and operating an illegal Internet gambling operation. Specifically Rennick used accounts set up under false pretenses to make payments to so-called co-conspirators by check from offshore Internet gambling operations, largely to be disbursed to U.S. residents as gambling winnings. It is considered illegal by the DOJ to process checks for Internet gambling in the U.S. Apparently Rennick may have known this because he never told the banks involved how the accounts would really be used, instead he claimed that the accounts would be used to issue checks for rebates, refunds, affiliates, and for payroll.
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Because users of Internet merchant accounts and customers often do not have the opportunity to interact face-to-face, the kind of anonymity afforded by these all-electronic transactions can tend to encourage fraudulent activities. Although tools to detect and prevent e-commerce fraud have improved over the years, there is little room for complacency as criminals are finding ever more sophisticated methods to evade detection. And, sheer growth in the volume of e-commerce transactions can complicate the process of weeding out possibly fraudulent interactions from perfectly legitimate ones.
Fraud does not come just from the consumer side; more sophisticated criminals will use merchant accounts in various ways to reap ill-gotten gains. As seen in a recent case, Gucci America was successful in shutting down an operation which sold counterfeit Gucci merchandise over the Internet, and now they are going after the companies that provided Internet merchant accounts to the fraudsters. Companies concerned with this type of fraud are also looking for better ways to prevent money laundering through operations that appear on the surface to be conducting a legitimate business, but are just using an Internet business to conceal the origin or destination of funds.
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