Statistics show that the majority of multiple business owners use one merchant account for all their payment processing needs, and we don’t blame them. After all, it is simpler and much easier to manage. However, smart entrepreneurs choose to open a separate account for each new business. Why? Let us elaborate.
1. Different levels of risk
A merchant account is what any business needs to accept electronic payments; but here’s the thing: not all businesses look the same to a processing company. Some are riskier to do business with than others, depending on the product or service they deal with, as well as how they accept payment.
Your typical processor will usually place your business into one of several categories, based on the level of risk.Now, let’s say your first operation involves selling household items online. Of course, your business will be in the high-risk category. But if over time, you decide to establish another website for electronics, this new operation will be at a higher level of risk.
The online electronics business is undoubtedly lucrative, but it is also riddled with chargeback cases and customer disputes.
For simplicity’s sake, you can choose to integrate your new site with your existing merchant account, but if these chargebacks and conflicts get out of hand, your merchant provider will be left with no chance but to shut down your account. Even your other lower-risk website will be unable to accept credit card payments.
On the other hand, if, for the new website, you had opened a different account, its closure would not bring even your other operation down.
High-risk merchant providers like eMerchantBroker have different prices for each level of risk, and although the fees can all be reasonable, the higher your risk, the more you’ll pay. If you have more than one online business, signing them all on one merchant account will mean one pricing for all. Usually, this standard price is determined by the operation with the highest risk level. With dedicated accounts, however, you have the chance to negotiate processing rates of each site and get better pricing for your lower-risk businesses.
3. Tracking payments
When you have one merchant account for all your online businesses, keeping track of payments can be challenging and time-consuming. But with individual accounts for individual websites, you will never have the worry of figuring out what funds came from where.
In conclusion, therefore, if you have several business websites, we highly recommend different merchant accounts for each one of them. The risks might be similar, but you know what they say; better safe than sorry.