Why You May Need Multiple Merchant Accounts

Robb Lejuwaan — Fri, 12 Dec 2008 15:58:34 +0000

From time to time I review the search terms and phrases that being people to this blog to get ideas for posts. Today one of the first search phrases was “are you allowed to have two merchant accounts?” So here is a quick answer to that question – yes.

We have many clients that have multiple merchant accounts. For example, wineries typically have at least two accounts, one for their tasting room set up as a retail account and the other account for their wine club set up MOTO (mail order telephone order). Occasionally they will have a third account for their website, which is set up as a ecommerce account. We set them up this way because it helps them track distinctive parts of their business and most importantly, it saves them money.

Each type of merchant account (Retail, MOTO, Ecommerce, Restaurant, etc.) has different guidelines and rates. So if you have a retail merchant account setup for your website, your transactions will not meet the guidelines of a retail account, resulting in being downgraded which results in a higher rates. I am not going to into specific examples n the post but if you want to see an example of how this works read this post: What is EIRF?

Bottom line: Yes you can, and sometimes should, have multiple merchant accounts. Also, make sure your account is set up correctly to match the environment your transactions are being accepted in.

Merchant Account Compliance Fees – Legit?

Robb Lejuwaan — Tue, 09 Dec 2008 00:11:44 +0000

As you may know, I review business merchant account statements on regular basis. One thing I keep seeing more and more on statements are terms like “Annual Compliance Service Fee” or “PCI Compliance Program.” The shocking thing about these fees is how much they are; I have a statement on my desk that reads $119.75 for such a fee. So what are these fees for? What do you get from them? Are they legitimate or just another profit center for merchant account providers?

I am sure there are going to be some industry insiders that wildly disagree with what I am about to say, but here goes any way. I believe these fees, for the most part, are just another profit center for this industry. Here is why:

If you pay these fees are you made PCI Complaint? Answer: No you are not.
Are you given tools or guides for becoming PCI Compliant when you pay these fees? Answer: Only sometimes.
If you have a security breach and you were not following the rules of the PCI Security Standards Council are you insured against the fines you’ll receive? Answer: Probably not.

So what are you getting for these fees? Most of the time – zip, nada, and nothing!

I know there are exceptions to this but they are few and far between.

The next issue I have with these fees is they typically are added without any foreknowledge of the merchant. In other words they just show up on the statement, with what seems to be hope that the merchant will not see them. If these fees are legitimate why the secrecy? If these fees bring real value why not communicate what that value is? I think the answer is obvious – they provide little to no value so the fees are snuck on to the statement.

The last issue I am going to bring up (I could bring up many more!) is the lack of choice. Typically these fees are not optional, they are mandatory. These fees almost have a feel like they were mandated by the US Government or maybe even God! How dare we question such fees! Here is why I am puzzled about the lack of an option. I have a client that is a restaurant, they have a band new terminal and pin pad, the software file that was installed on that terminal is PCI compliant, the Pin Pad is PCI-PED approved, they have taken their PCI Self Questionnaire. So why do they need to pay this fee, they are compliant, why don’t they have the option to say no to this fee? That would be fair and logical wouldn’t it? I am afraid the answer is that providing such an option would reduce the profit of the merchant account provider.

The truth is that PCI Compliance has created some much needed data security guidelines while at the same time providing a wonderful tool to increase profits for this industry. We can use the fear of a $50,000 fine for not being compliant to manipulate you into paying fees like these. I know this hard to believe that anyone in the financial services area would use such tactics to increase profit. Wait a minute, that is not hard to believe at all is it!

Here are my suggestions for dealing with these fees:

1. If you see these fees on your statements call your provider and ask what you are receiving in return for your money. If you don’t like their answer find a provider who either does not charge these type of fees or actually provides something of value for the fees.

2. Educate yourself on becoming and staying PCI Compliant. Here are some links check out:

The Basics of PCI Compliance

PCI Compliance Guide

PCI Security Council

Security Metrics (They will assist you in becoming compliant)

PCI DSS News and Information Blog

PCI Compliance Demystified blog

Bottom line: Educate yourself about PCI Compliance, take what ever steps you must to become PCI compliant and stop paying these fees if they provide no real value for your business.

Please feel free to add your comments below. I would love to have someone defend these fees, I am very open to being wrong on this.

Merchant Account Blog - Straight Pass Through » Compliance

Why You May Need Multiple Merchant Accounts

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Merchant Account Compliance Fees – Legit?

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