The idea and reasoning behind having multiple merchant accounts is a touchy subject in the industry. You’ll hear both sides to why you should and why you should never consider having multiple accounts. We wanted to clear the air, so allow us to address the ins and outs of opening multiple merchant accounts.
One of the common reasons we hear in favor of opening multiple merchant accounts is that it will protect the merchant in case of termination. If this is the only reason you’d like to open up multiple accounts, you’re doing it for the wrong reason. Reasons for termination are the same across the board, so chances are if you are terminated for a standard reason from one provider, the other providers will terminate the business before you have a chance to plan your next move.
So why would you need multiple merchant accounts for… you know… reasons that make sense?
First, you may want to open multiple merchant accounts if your new business can only be approved for a lower monthly limit than desired. More than likely, this is the case. Your business plan shows projected sales of “x” amount but you can only get approved for “x/2.” The reasons could be anything – not enough liquidity in your bank, no processing history to make the bank feel comfortable – the list goes on. In this scenario, opening two merchant accounts would allow you to have the volume to successfully run your new business.
Second, you may need multiple merchant accounts to process in various currencies. We worked with a business that initially only processed domestically. When the time came for them to expand to an international market, a secondary merchant account allowed them to grow AND separate domestic processing from international processing.
Finally, another reason it may be a good idea to have multiple merchant accounts is to lessen the chance of interruptions in processing. Interruptions can come in many forms – changes to business owners, locations, etc. If a slight change can result in an interruption, you can probably see why it benefits to be safe rather than sorry.
We hope we cleared up some questions for the reasons for and against having multiple merchant accounts. If you have the right reasons and play it smart, it could be a huge benefit to your business’s success.