One merchant account for multiple websites

This is a great question that often comes up with new Internet businesses. Many e-stores are started on a small budget and in the interest of keeping costs low the owner or webmaster uses a single merchant account to process credit card transactions for multiple websites.

The Answer
Card originators (VISA, MasterCard, AMEX, Etc.) and most acquiring banks require a merchant to have a separate merchant account for each website.

Originators and banks look at a website the same way they would a physical retail store. Each website is viewed as a unique location. Just like with brick-and-mortar businesses, each location must have its own merchant account.

 

The Reason for The Regulation
When you charge a customer's credit card, the doing business as (DBA) name that is on file with the processing bank is going to be printed on their credit card statement. DBA names are very important because the customer uses them to recognize your charge on their account.

 

If you use a single merchant account to process transactions for multiple websites, many customers will not recognize the charge to their card, and they will issue a chargeback against you.

For example:
if you open a merchant account for your largest website located at www.abc.com, chances are pretty good that the DBA name on the account will read something to the affect of "ABC.com". If you then use this same merchant account to process transactions for another website that is located at www.xyz.com, the charge will still appear on your customer's credit card statement as "ABC.com". This will cause the customer to become confused because they never made a purchase from ABC.com, and they will issue a chargeback against you.

But People do it Anyway......
Despite warnings many online merchants choose to ignore processing regulations and use one merchant account for multiple websites. We do not recommend this approach, especially since it directly violates processing regulations. However, if you are considering using one merchant account to process transactions for multiple websites there are some things that you need to consider.

Consequences -
The excessive chargebacks that often result from using one merchant account to process transactions for multiple websites will inevitably bring your account to the attention of the risk department at your processing bank. Once they realize what you are doing, there may be a number of different repercussions such as:

• Immediate Account Termination - This is almost a definite.
• Frozen/Held Funds - The processing bank will most likely freeze all of your unsettled funds until they are sure that no further chargebacks will be issued by your customers or the issuing banks.
• Terminated Merchant File - While most processing banks will not place a merchant on the terminated merchant file (TMF) for a violation such as this, it is a possibility depending on the severity of the misuse, and the number of website that were discovered to be processing through the same merchant account .

 

Choose Your DBA Wisely -
We do not recommend using a single merchant account for more than one website, but if you are going to do it anyway you must create a universally recognizable DBA name. Create a DBA name that will allow your customers to identify your charge on their account regardless of which website they purchased from.

Communicate with You Customers -
Repeatedly tell your customers exactly how your business name will appear on their credit card statement so that they can easily recognize your charge.

• At Checkout - Have a notice displayed in the "checkout" section of your website that reiterates how your business name will appear on the customer's statement.
• On Receipts - Have a notice at the top of your email receipts and order notifications that once again tells the customer how your business name will appear on their statement.
• Click Confirmation - Make your customers confirm that they know how your charge will appear on their statement by having the customer submit a small confirmation checkbox form prior to order completion.

 

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