Payment gateway for multiple merchant accounts
In the digital age, businesses of all sizes and industries rely on the ability to process payments quickly and efficiently. While some businesses may be able to get by with a single merchant account, others require multiple merchant accounts to handle their payment processing needs. This article will explore the concept of using a single payment gateway for multiple merchant accounts and how it can benefit businesses.
What is a payment gateway for multiple merchant accounts?
A payment gateway for multiple merchant accounts is software allowing you to connect more than one merchant accounts you have at different payment or merchant service providers and acquiring banks to accept and process online transactions.
Once set up, such a payment gateway provides the business with a single access point to all merchant accounts, transaction details, and history. On the contrary, without a multiple merchant account payment gateway, the business should be logged in to and manage multiple dashboards, tracking all its transactions separately.
What is a payment gateway?
A payment gateway is a software application that facilitates the transfer of payment information between a customer, merchant, and their acquiring bank. It enables secure processing of payments from customers using debit or credit cards.
What is a merchant account?
A merchant account is a type of bank account or a payment service provider (PSP) account that allows a business to accept payments via debit or credit cards.
Depending on the industry the business operates in, its location, turnover volume, card processing history and many other factors, an acquiring bank or PSP evaluates its risk level. Commonly, there are three levels: low, medium, and high. The risk level set by the acquirer affects the conditions, limitations, and fees of a merchant account and the scope of the information a business must file along with its merchant account application.
Which businesses should work with multiple merchant accounts?
While some types of businesses could benefit from the multiple merchant accounts approach, for others, it may be the only way to operate.
First, it’s worth noting that banks providing merchant accounts often set a turnover volume limit, not allowing businesses to process any transaction exceeding the limit or processing the overrun at a higher cost. For example, if a limit on your merchant account is $70,000, but your expected sales volume is $100,000, you’ll need a second merchant account to avoid such a situation.
Second, multiple merchant accounts can help manage payment processing for businesses that run multiple websites with different merchant accounts. Having separate merchant service accounts for different stores may be a must for them because of accounting, taxation or other reasons.
Another reason to consider opening additional merchant accounts is running a high-risk business such as online gambling or adult entertainment. High-risk merchants tend to suffer from unexpected merchant account bans, holds and freezes. According to a report by Riskified, high-risk businesses are 5 times more likely to experience account holds or freezes than low-risk businesses. For such cases, it’s good to have a backup option. It’s also an excellent way to diversify payment processing and distribute risks. For instance, having several merchant account providers makes it easier for high-risk merchants to stay within the chargeback threshold that gateway services and payment networks set for the high-risk industry. The chargeback threshold is calculated monthly as chargebacks divided by total transactions. In the high-risk industry, it cannot exceed 1.8%-3%. High-risk businesses can lower their chargebacks ratio by dispersing their cash flow across multiple accounts.
And last but not least, the more merchant accounts you have, the more payment processing capabilities, features and alternative payment methods are available to you and your customers, which is extremely valuable for large and international businesses.
Benefits and disadvantages of having multiple merchant accounts
Whether dealing with multiple banks is a must for you or your choice, such an approach bears certain benefits and disadvantages to business. Let’s get to know which ones.
- The ability to work with different payment processors brings unlimited payment capabilities to you and allows you to provide clients with all the payment options they want. Moreover, you’ll be able to enter new markets much faster, knowing that all your payment needs are taken care of.
- You can earn more and scale up quickly if the acquirer’s turnover limitations do not box you in. Let the sky be the limit!
- If you decide to work with multiple payment service providers, look for a payment solution providing special features for such companies. One of them, payment routing, allows you to reach many business goals by forwarding your transaction to the best service provider available. It’s a great way to save on processing fees, boost conversion, minimise declines, and much more.
- No processor is immune to downtimes and technical glitches. If you have multiple merchant accounts, you can ensure uninterrupted transaction flow.
- Alleviate the risk of having your merchant account unexpectedly banned by the acquirer by just transferring all your payment traffic to a different account. You can also distribute transactions across various accounts to keep you under the 1.5% chargeback ratio threshold (exceeding it leads to account termination with many service providers) or turnover limits.
- Getting a merchant account is a challenging task. To get a merchant account, you must find a merchant service provider, meet their requirements, prepare all the documents they need, and wait some time for the review and approval of your application. You’ll have to go through the same procedure as many times as the number of merchant accounts you want.
- Burdensome management. When working with multiple acquiring banks, you have to stay in contact with each one to solve occurring issues, make changes to your agreement, and so on.
- Disjointed data sources. The more merchant service accounts you have, the more time and effort it takes to monitor your transactions, reconcile them and create reports.
All these cons will create severe obstacles to efficient payment processing if you don’t know how to avoid them. Good news: they are avoidable, and we have the solution.
How to work with multiple merchant accounts?
There are two ways to work with multiple merchant accounts. The first is to integrate all the providers needed and manually log in to multiple dashboards at different providers. This can be time-consuming and may require significant technical expertise to manage. The second option is to use a payment gateway with ready-made integrations and a single place to manage all payment flows across all merchant accounts.
The first option may be suitable for businesses with in-house technical expertise and resources to manage multiple integrations. However, for many businesses, the second option is a more practical solution. By using a payment gateway with ready-made integrations, businesses can save time and effort while ensuring that all their payment processing needs are met.
While using a payment gateway with ready-made integrations may offer several benefits, it is important to consider the potential drawbacks. For example, businesses may need to pay higher fees for using such a service, and they may be limited in terms of the payment providers they can use. Additionally, businesses may be reliant on the payment gateway provider for support and technical assistance.
How can Corefy help?
Corefy is a payment orchestration platform that offers businesses a range of benefits when it comes to working with multiple merchant accounts. After a single API integration, you’ll have only one dashboard with all your transactional data gathered and unified and all the tools presented for you to use.
In addition to the wide range of integrations, Corefy also provides an advanced payment infrastructure that is developed and maintained by our team of experts. We offer solutions for both payments and payouts, with special features like intelligent routing, cascading, multicurrency support, dynamic currency conversion, reporting and analytics, etc.
Besides providing our clients with all the payment tech they might need, we share our industry expertise, helping them optimise and grow their businesses. Don’t hesitate to book a demo to learn more about how we can facilitate your growth and solve your payment pains.
Ready to boost your business to the next level?
Get in touch with us and we will try to provide you with the most relevant offer.