Multiple Merchant Accounts, One Credit Card Terminal…

Why would you need to setup multiple merchant accounts on one credit card terminal?

There are a few reasons that a business/businesses would want to setup multiple merchant accounts on a single terminal. There are a huge number of businesses that could benefit from using multiple merchant accounts, and they may already have all the equipment they need to do so.

The first scenario for multiple accounts is when a business has multiple merchant accounts for different transactions that they accept. Many restaurants and businesses that have a delivery service, or a phone order department, have a merchant account for their keyed transactions and another for their swiped transactions. Using a single terminal often is a much simpler system for charging credit cards than using multiple terminals or software programs.

The second situation that I commonly see is hair salon type businesses where there are multiple, independent parties that all need to accept credit cards in a single location. Rather than using some complicated system to deposit money into each professional’s account at the end of the month, a merchant account will automatically deposit each person’s money where it needs to go.

Setting up a terminal for multiple accounts:
The most important part in setting up a terminal for multiple account processing is to use a terminal that is compatible with multiple merchant accounts. Not all terminals are compatible with a multiple account setup.

Compatible Terminals:

• Verifone Tranz 380×2 (2 Accounts)
• Verifone Omni 3740 / 3750 (# of accounts depends on memory and how complex each account is normally ~9)
• Nurit 2085 (9 Accounts)
• Nurit 3020, 8320 (9 – 11 Accounts)

Other important things to remember when you need to setup multiple merchant accounts through a single terminal, are that the merchant accounts must be on the same processing platform through the same processor. The exception to this is the Tranz 380×2, as it is able to handle two completely independent merchant accounts through the same terminal. The Verifone Omni 3740 and 3750 could potentially do the same thing as the Tranz 380×2 using a function called split dial, but I have never seen it successfully done.

As for the rest of the terminals, I highly recommend using a single merchant account provider for the setup to ensure the terminal is programmed correctly and that each account is setup in the right place from the start. Also, if more accounts need to be added in the future, they can correctly setup each additional account from the start, and can easily program the terminal with the additional account information.

Why two merchant accounts for a single business:
A business can actually save money by having two merchant accounts if they do a decent volume of both keyed and swiped transactions. Keyed transactions will downgrade through a swiped merchant account, and swiped transactions are more expensive to process through a keyed account, so the lowest cost solution ‘can be’ to use a separate account for each transaction type. Very low volume businesses will probably not benefit from a multiple account setup, but businesses with higher volume can save a lot of money and can make their banking easier if they use separate bank accounts for their transaction types.

How to actually process a card through a terminal with multiple accounts:
This will vary from terminal to terminal and from processor to processor, but generally your terminal will prompt you for the id assigned to the merchant account in the terminal (Ex: 1, 2, 3…). All you have to do it remember which id is used for each account, and then process the card either by swiping it or by keying it in.

Quick example of a business that could save using multiple accounts:
Assume the business does about $20,000 per month in sales at an average ticket size of $75 split between keyed entry and swiped entry. Assume 2.3% + $.30 / transaction including AVS for keyed transactions and 1.75% + $.20 / transaction for swiped transactions.

Scenario 1 – Keyed Account
Processing Fees: $20,000 x 2.3% = $460.00
Transaction Fees: ~267 transactions at $.30 / transaction = $80
Total = $540

*Scenario 2 – Swiped Account
Assume keyed transactions downgrade to +1% over the swiped rate. Keyed transactions also get +$.05 / transaction for AVS.
Processing Fees Swiped: $10,000 x 1.75% = $175
Processing Fees Keyed: $10,000 x 2.7% = $270
Transaction Fees: ~267 transactions at $.20 / transaction = $53
AVS Fees: ~ 134 transactions at $.05 / transaction = $7
Total = $505

*This account is technically not allowed. With a swiped account, a business must be swiping at least 80% of their transactions. This account would eventually get shut down by Visa / MC or the processing bank unless they switched to a keyed account. Technically it would be cheaper than a keyed account, but the business risks getting shut down, having their money held or even getting TMF’d.

Scenario 3 – Swiped and Keyed Account
Swiped Processing Fees: $10,000 x 1.75% = $175
Keyed Processing Fees: $10,000 x 2.3% = $230
Swiped Transaction Fees: ~134 transactions at $.20 / transaction = $27
Keyed Transaction Fees: ~134 transactions at $.30 / transaction = $40
Total: $472

Not a huge savings (about 13.5% over a keyed only account), but over a few years it could really add up, and there are the other benefits that multiple account businesses have that often would be worth paying more for from an accounting perspective.