High risk merchants with substantial month-on-month processing growth quickly discover that load balancing payment processing volumes between more than one merchant account is the best way to protect their business.
Processors and agents often promise that fast growth will be “no problem”. Don’t believe it.
Fast growth scares many processors. Despite promises, when push comes to shove, processors hold pending settlements, implement or increase reserves, or simply refuse to increase volumes.
One company tells the story of working with a well-known payment processor. The company was originally approved for $100,000 per month in processing. That amount was reached within the first 3 months.
An excellent product combined with strategic advertising resulted in month-on-month growth of 40% over the approved processing volume. The company advised the processor to expect growth to continue. The processor agreed that it would increase the volume as needed.
But, guess what? As the volume grew from $100,000 to close to $200,000 per month, the processor started holding all settlements. The processor refused to release settlements for anything over the original $100,000 per month it had initially approved. The rest of the settlement funds went to a “reserve” that the processor could hold for up to 6 months.
All of this was done without informing the company. Suddenly, working capital from product sales was no longer available. The entire future of the company was at risk.
There was no reason for the processor to hold the funds. The company had 5 months of processing history with no chargebacks. There were no problems with the merchant account.
The only reason that the processor held the funds was that the merchant grew too fast for the comfort of the processor. The merchant had to quickly scramble to get another account that would accommodate his growth.
The company was using a payment gateway integrated to his website that accommodated only one merchant account. There was no way that the merchant could keep his current account and simply add others to add more volume.
The next merchant account was approved for $250,000, based on prior processing history. Yet, without a gateway that could load balance between accounts, the merchant would quickly reach his processing limits on the new account. And be faced with the same dilemma.
Fortunately, the merchant was able save his business by getting a payment gateway that allows load balancing. He now has 3 merchant accounts and the processing volume needed to accommodate his business growth.
If you are a fast growing high risk merchant, don’t risk the future of your business by depending upon a single payment processor. Establish more than one merchant account. Use a payment gateway to load balance between accounts. And enjoy the ride.
Are you a high risk merchant that wants to load balance among multiple accounts?
Contact email@example.com today.