Why is it Beneficial to Have Multiple Merchant Accounts?


Photo of sign saying plan a plan b and plan c

Many people think that because they run a legal and legitimate business there is no reason to have multiple merchant accounts. Why would a bank shut down a perfectly legal and clean account? Regardless of whether your merchant account is at risk of being shut down by the processor, there are many benefits to having multiple accounts if you are a high risk merchant. Most high risk merchants have two or three high risk merchant accounts and sometimes an offshore merchant account as well.

Why You Need Multiple Merchant Accounts

To have a backup. There is always a risk of being shut down. Even if you have an account for your specific industry, you are always at risk of banks and processors changing their minds and deciding not to support certain industries. It could be because of the industry’s reputation or that there is too much volume, but for whatever reason—it happens. And when it does happen, merchants are left without a credit card processor while they are scrambling to get approved for a new merchant account. It is better to be safe and have a backup processor, just in case this happens to you.

To distribute your monthly volume and chargebacks. All merchant accounts have monthly volume caps. This is largely because banks do not want to be responsible for covering a large amount of money if it is requested back from the customers. If a business receives a higher volume than the maximum allowed on a merchant account, the account will stop accepting cash. It would be beneficial to have two or three accounts, so that you can accept a larger monthly volume. Limitless suggests that if you process more than $50,000 a month, you should consider opening multiple merchant accounts to avoid meeting the monthly cap. While distributing the monthly volume, it could also benefit your business by distributing chargebacks among multiple merchant accounts. Merchants are at risk of being dropped when chargeback ratios are too high. If you evenly distribute your chargebacks between multiple accounts, your chargeback ratio will be lower for each account.

Load Balancing. This is an easy and quick way to protect your company’s cash flow. Load balancing is a technology that divides your transactions across multiple accounts. This way if you hit the monthly volume cap or one of your merchant accounts freezes for some reason, you still have a live account accepting money. You can set it up to automatically distribute every other transaction to a different merchant account.

To have more freedom. Lastly, all processors have different guidelines for merchant accounts. Having multiple merchant accounts can give your business more freedom.

Limitless specializes in high risk merchant account solutions. We ask the right questions and can help you through every step of the process. It is our goal to get your business up and running as quick as possible. Give us a call today at (800) 971 – 6221 or us the easy apply now and let’s get your business approved!