How to Handle Credit Card Processing on Multiple Websites

The question of processing credit card payments on multiple websites is one that both our existing and prospective clients ask with an unchanging regularity. The picture is often further complicated by the addition of the client’s brick-and-mortar operations, which require the implementation of totally different credit card processing tools and where transactions are subject to a different, and typically lower, set of processing rates.

So how do you set up your merchant account when you have multiple operations? Well, before we can answer this question, we will need to start at the beginning and take a look at exactly how a merchant account is set up, how your processor determines which risk category your operations will fall in and what your processing rates should be.

The level of processing risk will be determined mostly based on the method of accepting payments, your processing volumes, average sales ticket and type of product or service sold. Based on your business characteristics, you will be placed into one of several (typically five) risk categories. The lowest two risk categories are usually reserved for card-present operations. Card-not-present credit card acceptance by itself is sufficient to place your business in the high-risk category. Then if you sell merchandise that historically has been linked to producing high levels of customer disputes and chargebacks, your risk level will be raised even higher and you will be required to submit additional documentation with your application. Finally, certain industries are prohibited by Visa and MasterCard and you will not be allowed to accept their cards for payments. Your pricing will be based largely on your risk level.

With that in mind, let’s look at your options.

The first one would be to set up one merchant account for all of your operations. This is the preferred choice for physical operations, where you have multiple outlets selling the same merchandise. The main advantages of this option are that it simplifies both your operations and accounting. If you have an e-commerce addition to your physical presence, you may also add it to your existing merchant account. Just make sure that, if you choose this option, your pricing is based on the interchange-plus model. This will ensure that you are not getting overcharged for your card-present transactions. Be advised that one merchant account can only be set up with one pricing structure. What this means is that, if your pricing is based on one of the tiered models, where transactions are classified as qualified, mid-qualified or non-qualified, your processor will have no choice but using its higher e-commerce rates for both your card-present and card-not-present transactions.

Using one merchant account for multiple websites is also an option, but here the challenges are of a different kind. Technically, your payment gateway can easily be set up to process information between each of your websites and your processing bank. Moreover, your pricing is likely to be the same for each e-commerce operation. The issue is that businesses typically, although not always, set-up multiple e-commerce websites to sell different lines of product. Now, these different products are likely to fall into different risk categories, some of which may be restricted or prohibited. This is the reason why most processors require that you set up separate accounts for each of your websites, so that they can evaluate each of them on its own merits. You should consider this option even if you are not required to do that.

Having each of your websites process credit card payments through its own merchant account spreads the risk evenly and isolates and protects each part of your business from problems arising elsewhere. So if you operate a single merchant account, all of your e-commerce websites will suffer if the account is suspended, whereas with separate services, only the problematic account will be affected. You will have to pay monthly fees for each of your merchant accounts, but the additional protection will be well worth the cost.

To conclude, your decision on whether to operate separate merchant accounts for each of your websites will have to be based on the specifics of your operations. However, unless you sell the same merchandise on each one of them, setting up a separate credit card processing service for each individual website is likely to be the better option.

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