The ability to process payments is fundamental to any business. Merchants who are unable to process payments do not remain in business long. The ability to process payments online requires a live merchant account and a payment gateway. Merchant accounts can be difficult to obtain and can be suddenly closed down for a variety of reasons. Learn the benefits of using a multi-merchant account payment gateway and intelligently route your transactions to the processor or your choice for your card not present transactions. A multi merchant payment gateway for payment processors gives your merchant services the flexibility it needs in today’s higher-risk business landscape. Diversify your payment processing relationships while better managing your chargeback ratios with a Multi-Merchant Payment Gateway!
- Risk. Your account status can be reviewed by an auditor and classified as “high-risk” owing to a number of factors. High-risk accounts can be restricted or closed due to the liability they pose to the lending bank or payments processors.
- Transaction Volume. Business owners that are classified as high-risk merchants may have a volume processing cap placed on their transactions. This limits the number of transactions a merchant can process by debit or credit cards. Once they reach the monthly transaction limit, they can no longer process payments until the following month. Intelligently routing transactions via a multi-merchant payment gateway will assist in managing multiple merchant accounts at once.
Business/industry overlap. Immediate notice can be served on merchant accounts by banks that have too many clients operating in the same industry. Business bank or merchant service accounts can find themselves terminated by a bank seeking to spread its risk amongst multiple industries. This tends to happen when aggregators board too many higher risk merchant types onto their portfolios and are unable to manage the risk associated with them.
What Is a Merchant Payment Gateway?
A multi-merchant payment gateway is a cloud-based software that deciphers and transfers payment information from a customer to the bank account of a merchant.
In card-present transactions, the software is used through a card reader or point-of-sale system when a customer makes a card payment.
The main function of a merchant payment gateway is to capture a cardholder’s information, confirm if funds are available and ensure that a merchant gets paid.
How Does a Merchant Payment Gateway Work?
The stakeholders involved in the merchant payment gateway process::
- Merchant: A business or any person initiating the sale
- Cardholder: The customer making the purchase
- Issuing Bank: The financial institution in charge of the customer’s account which can be a checking account linked back to a debit card or a credit card account.
- Card Scheme: The central payment network used by card companies like MasterCard and Visa to process payments.
- Acquiring Bank: The financial institution in charge of a merchant’s account and processes card payments on behalf of a merchant
Step-By-Step Process of How a Merchant Gateway Works
- The customer places an order and makes payment by entering debit or credit card details.
- Card details are protected with Secure Socket Layer (SSL) encryption and sent from the customer’s browser to the merchant’s server. The multi-merchant payment gateway waves away the merchant’s PCI-DSS (Payment Card Industry Data Security Standard) compliance obligations without having to redirect customers away from the site.
- The merchant sends transaction details to their payment gateway. The transaction details are also sent via an SSL encrypted connection to a payment server hosted by the merchant gateway.
- Merchant payment gateway converts the transaction information from XML to an EFT message format and sends it to the payment processor of the merchant’s acquiring bank.
- The payment process transfers the transaction information to the card association network.
- Credit card issuing bank gets an authorization request, confirms if funds are available and sends a response code back to the processor approving or declining the transaction.
- Next, the processor transfers the authorization code to the payment gateway which forwards it to the processing payment interface. This processing is known as “auth” or authorization and takes less than 3 seconds.
- The issuing bank completes the “auth” process and moves to fulfil the transaction with the merchant acquiring bank.
- When the merchant submits all approved transactions in a batch to an acquiring bank it “clears” the auth if it has not been cleared previously.
- Acquiring banks makes a batch settlement request to the credit card issuer.
- The credit card issuer makes a settlement payment to the acquiring bank.
- The acquiring bank deposits the full amount of funds approved in the merchant’s account.
Can You Have Multiple Merchant Accounts?
“Can you have multiple merchant accounts?” is a question posed to us by merchants looking to open a second merchant account.
The answer is yes.
Having multiple merchant accounts means reducing your risk, accessing more payment options, and having fewer restrictions.
Merchant account providers can shut down your account anytime without warning for a number of reasons which include:
- High chargeback ratio
- Operating in a high-risk industry
- Suspicious activity connected to your account
- Fraudulent cases
If a merchant service provider cancels your service, you are unable to process any payments unless you have a second merchant account.
This is a major reason why you should opt for multiple merchant accounts using our multi-merchant payment gateway. Ensure that your business suffers no interruptions or downtime with multiple merchant accounts.
Can a Single Payment Gateway Use Multiple Merchant Accounts?
Yes. It is possible for a payment gateway service provider to use a single payment gateway through multiple merchant accounts.
Payment gateway service providers can manage your merchant accounts in one place using unique MID platforms that can track all your exisiting merchant accounts through a single API integration.
A merchant identifcation number is like an account number used for transfering payment from a customer’s account to a merchant account.
By using mulltple MIDs, merchants can monitor different aspects of even the same business and seamlessly automate their entire payment process
Setting Up a Payment Gateway With Multiple Merchant Accounts
When setting up a payment gateway with multiple merchant accounts and Intelligently Route Transactions, there are 2 options:
- Set up a new merchant account ID with your existing payment provider
- Use the services of another merchant provider
Option 1 is the best way to go if you are trying to use separate accounts for different aspects of your business. For instance, you can have a different account for each retail outlet for your clothing business.
Option 2 is recommended for a merchant looking to protect a business from the pitfalls of transaction limits, high chargeback ratio, and declined credit cards.
For example, if you have a payment gateway with multiple merchant accounts linked to the same provider and one of your merchant IDs is flagged for dodgy activity, the provider can suspend both IDs.
This is not the case if you have multiple merchant IDs managed by different providers.
If you do not want to go down the same payment gateway multiple merchant accounts route and still want to work with one provider here is what you can do.
Tell them you are trying not to put all your payment processing eggs in one basket or explain that you want them to send declined transactions to a different page.
The payment provider should be able to set up your Multiple MID payments gateway and merchant accounts in a way that mitigates your risk.
How Multiple Merchant Accounts Can Help Your Business
Online businesses that find themselves facing any of the situations outlined above have an alternate course of action at their disposal. Allowing businesses to accept payments from a variety of payment processors under one payment gateway, opens the door to many new options that were not available before. Intelligently route transactions to the processor of your choice with SecureGlobalPay.
Obtaining and operating multiple merchant accounts provides a solution to the problem of delimited or terminated accounts. The multi-merchant option allows business owners to increase sales volume by processing transactions from multiple websites. Having multiple accounts is a great way to overcome the obstacles posed by monthly transaction volume caps.
Multiple merchant accounts can enable businesses – especially startups – to avoid the obstacles that come with a sudden shut-down of a single merchant account.
Benefits of Multi-Merchant Payment Gateways
Having multiple merchant accounts allows you to overcome some of the obstacles that come with high-risk merchant profiles. But in addition, there are numerous benefits to utilizing multi-merchant payment gateways.
- Multimerchant accounts allow businesses to intelligently route transactions and avoid monthly processing caps. By distributing business across multiple accounts, merchants are able to sell above a given monthly processing cap, this increasing revenue.
- Having a back-up plan is a good idea for any business. But it is especially useful for high-risk merchants. One of the risks high-risk merchants face is sudden termination of merchant accounts for a variety of reasons. Having multimerchant accounts will afford you a back-up plan if your primary account is suspended or terminated for any reason.
- Having multiple accounts means that your individual transaction chargebacks will not be concentrated in a single account. Multi-merchant payment processing decreases the likelihood of suspension, termination or extra fees for any given account. A risk shared is a risk minimized. Distribute your chargebacks across multiple merchant accounts.
These are just some of the benefits available to merchants who go with multimerchant accounts.
A Personalized Solution for your Business
Your business reflects you. A business is as unique and idiosyncratic as its owner. It is as robust and brand-distinctive as its history and earnings permit.
No one multi-merchant account solution is going to be the same as another. You will have your own distinct way of communicating with and serving clients. Your website, your tele-date plan, your approach to sales, and client service are the brand your clients are paying for.
Your web-based Multi-Merchant Payment Gateway account solution should reflect our brand and your priorities. SecureGlobalPay knows how much effort goes into your business day and is able to provide the absolute best payment gateway for processing multiple merchant accounts. Let us design a multi-merchant account gateway solution that is every bit as unique as your business and your brand.
Tie multiple accounts to a single website. Intelligently route transactions to the processor of your choice. Distribute chargebacks across multiple accounts. Multiply profits. Minimize risk. Let SecureGlobalPay show you how.