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MULTIPLE MERCHANT ACCOUNTS MAY HELP SAVE
ON PROCESSING FEES
Having multiple credit card merchant
account would seem like a bad idea at
first as it would involve paying all the
types of fees charged for merchant
account, twice. However, several
businesses do have two merchant accounts
and it has proven beneficial for them as
it has helped in actually reducing the
processing charges of credit cards.
The biggest factor that can be avoided
in processing expense is the mid and the
non-qualified surcharges. There are two
types of merchant accounts which are
card – not – present and card – present
merchant accounts. The card – present
account can be used only when the
customer and his/her credit card are
available together. The best example for
this type is the retail store. The Card
– not – present merchant account is used
when transactions take place with out
the presence of the customer or his/her
credit card. The best example for this
case is the e – commerce business.
By having two merchant accounts, one of
each type, then the business can save a
lot of money which they pay as
surcharges because of downgrade. Suppose
you process a card – not – present
transaction through the card – present
account then the transaction will
attract a higher discount rate.
Therefore, this higher discount rate and
surcharges can be saved by using the
right kind of merchant account for the
right transaction.
But, a few owners of small businesses
are concerned about the doubling of the
monthly fees due to two merchant
accounts. This problem can be overcome
by obtaining both the merchant accounts
from the same merchant account provider.
Since you have bought in bulk, you can
negotiate with the provider and get a
lower fixed fee for both the accounts.
Though it is not a common phenomenon,
sometimes the acquiring banks and the
processors of credit cards experience
some problems which cause a temporary
disruption in service. For merchants who
are completely dependent on these
merchant accounts, it will cause a huge
loss due to the incapability of not
accepting credit cards for some time.
This results in lost revenue and more
importantly lost clients.
By obtaining more than one merchant
account with different providers, you
will be able to protect yourself from
such disruptions of service, caused by
downtime. But, the increased costs of
maintaining 2 merchant accounts because
you want to protect your business from
service outages are not a good idea for
all the businesses. Such service outages
are not a common phenomenon and the
various types of fees applicable to one
account should be paid two times.
To find out whether your business needs
another merchant account you have to
make a simple calculation. Find out the
sum you are losing every month, if any,
due to the service outages of your
merchant account provider and subtract
it from the sum of the fees needed to
pay for another account. If you get a
positive number then it is time for you
to open the second merchant account
without further delay. |
