The Benefits of Multiple Acquiring Banks
Putting all of your eggs in one basket can be risky.
Especially when it comes to service providers, such as banks, which have strict compliance rules and guidelines for accepting merchant account customers and supporting card-not-present (CNP) transaction processing.
As anyone who’s applied for a merchant account knows, the process isn’t easy; even for large companies. The financial services sector is more risk-averse than ever before, with a much greater compliance burden than used to exist before the 2008 economic crisis. At the same time, fraud, friendly fraud and cybercrime are on the increase.
Financial Risks for Merchants
Merchant acquirers need to manage this risk carefully, which often means taking longer to approve accounts and closing them more quickly if a merchant poses too much of a risk or they suspect fraudulent activity.
Unfortunately, as merchants know, not everything is under their control. It isn’t their fault when criminals steal cards and use an unsuspecting merchant to process fraudulent transactions and take the goods. Effectively stealing from the merchant.
Customers who ask for chargebacks despite receiving the goods (friendly-fraud) are doing the same, which puts merchants in a difficult position with acquirer banks and card schemes. Both types of fraud put merchants at risk of ending up on the MasterCard MATCH List (Member Alert To Control High-risk Merchants), effectively a blacklist, which can make it more difficult to get an international merchant account.
One way to reduce these risks, and avoid getting shut out of the card payment system, is to open more than one merchant account.
Benefits of Multiple Merchant Accounts
- Access more markets and cross border trade. Not every merchant bank wants to expose itself to the risk of international markets, even when they say coverage is worldwide. A chargeback in a domestic market may not cause a red flag, whereas the same thing happening in a country on a banks’ “high risk” list could put the account under greater scrutiny. Therefore if your organisation wants to take cross-border payments you may need a specific merchant account for different territories.
- Process more alternative payment methods. We are witnessing the rise of an increasingly diverse range of payment options across the world. If you have customers overseas, then you need to offer the payment solutions popular in different regions, which means that your payment service provider and merchant bank need to offer specific alternative payment methods. Similarly, not all acquirers handle all the major credit cards in different territories. It may be necessary to have different merchant accounts to accept certain card payment methods in different countries.
- Reduce the risk of blacklisting or account closure. By having multiple merchant accounts, in the worst case if one merchant bank closes your account your business can fall back on another merchant account. You will be to alert them beforehand that payment volumes are going to increase and where these payments are coming from. This approach can be especially useful for merchants operating in high risk verticals.
When you are assessing merchant acquirers, remember that this is a two-way conversation. You need to provide them with enough information to approve your account – be upfront, do your homework – but you also need to know whether this bank will serve your business well. Ask questions about chargeback policies and international payments, so you can get a clear idea whether they will prove a useful partner to your business.
Secure Trading partners with global acquirers as well as offering our own merchant account services. To discuss your organisation’s requirements or for advice on finding a suitable acquirer, contact our team: Call +44 (0)808 159 7217 or email [email protected]