Using merchant account on another business

I set up a merchant account to accept credit cards online a couple of years ago for a business that has been put on hold.

Ironically, I have been paying fees each month to keep it open because the approval process was so difficult, and I fear if I applied again, I would not be approved. (Just trust me on this one.)

Recently I have been trying to get a web development business started, and the thought occurred to me that it might help me get business if people could pay online via credit card. (It would also protect me from a lot of flakes out there who might stiff me!)

Speaking in general terms, how risky would it be to accept payments for company-A on company-B’s merchant account?

I legally own each business, and they are registered with the same state. The IRS might not like it, but since everything ties back to me, and just me, anyways, what’s the diff?!

I would disclose to people who wanted to pay that way by saying, “Your card will be charged by ACME-2 even though I go by ACME-1…”

I’m not trying to break any rules or laws, but rather to utilize something I have already paid thousands of dollars for and never used.

I could contact the vendor, but I’m sure they would make me reapply, and then I risk being declined.

From where I stand, it shouldn’t matter - short term - since everyone still gets their fees.

And it sure would make it easier to accept out-of-state work knowing I have been paid at least half up front.

Any advice on this?

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This depends, first is the company with the merchant account registered to do business in this kind of industry? (This is something that might or might not be required depending on where you are setup).

If the issue I mentioned above is not a problem, the easiest is setting up a contract between the companies. In short it will detail that Company A sell the service on behalf of Company B, and for doing this service they will keep x% of the sale, and then transfer the rest back to Company B. Basically similar to a license agreement.

The key here is that the % they keep has to be large enough that the tax government will accept it as a workable arrangement.

In addition to this, you would want to look into the terms of your merchant, to make certain they do not explicit say this is not allowed. If you have not transferred money through the merchant account on a while, you also want to give them a heads up that you will start processing through it again.

Note: As mentioned, this is not legal advice, and you would do well to bring this either by a lawyer or accountant.

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Merchant accounts are way overpriced, in my experience, and you can basically bypass them these days. For example, Stripe—one of the most popular, dev-friendly payment processors—lets you accept payments into a regular bank account.

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Thanks for the tip, although I would not be interested in dealing with a company thinks this is appropriate customer service and sales…


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Suit yourself. But you don’t need to contact them in this way. The service is ready to use when you want.

Since you are down under, I don’t suppose you have ever dealt with them, right?

It just seems tacky for a “legitimate” company to have no practical way to reach a human being - especially for sales. (That is a business model like 1&1 Hosting has…)

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There’s a contact form and an e-mail address, both of which will, I’m sure, elicit a response from a human being. What did you want that is missing?

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They’re available here as well as a number of other countries around the world. They are one of the few most favored payment systems around at the moment (quite possible number 1) because of they clean way their system works. As I say, it’s not a matter of talking with them as such. You sign up, use their API, done. No chit chat needed.

If I want to buy something from a company I have never dealt with, I sure as hell don’t want to have to give out my e-mail and form out a form!! :smirk:

I think their approach is arrogant - give us your details and then we will contact you.

How about a telephone# like everyone else has been using for sales for the past 100 years?

There is a time where you need to be available and open in business, and enticing someone to make a purchase is one of them. If you make me feel like you are doing me a favor, or you’ll get back to me when it is convenient for you, then you can screw off as far as I am concerned…

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A toll-free tele # would still go a long way.

I am a people person, and I like to get to know a new company via their staff before I start filling out web forms, downloading manuls, using API’s, etc.

They are very easy to contact if needed - just that the communications are via email and it might take a day or two to get an answer. I ended up having email discussions with three of their staff about various matters while I was investigating whether their service met specific requirements for membership renewals for a club. All three of the staff I dealt with (with three totally different questions) provided detailed responses that fully answered my questions.


I have had to speak to the Stripe team a couple of times, fortunately I was able to reach out on Twitter to them. Personally I have no issue regarding how a company lets me contact them if I have issues as long as I can contact them and they respond.
The fees to use Stripe is really good and by the sounds of it, much cheaper then your merchant account


I don’t use a telephone, so I don’t pay attention to whether or not sites offer telephone numbers for contact. But it does seem to me that while that would work fine for a US company only doing business in the US, it would be problematic for a company operating in multiple countries. Presumably, it would require call centre staff in each country, increasing the running costs (and therefore the price to customers). And I wonder what percentage of customers - or potential customers - would actually use such a service?

[quote=“mikey_w, post:10, topic:206715”]
I like to get to know a new company via their staff before I start filling out web forms,
[/quote]So you don’t shop at Amazon, or buy any kind of software online without first telephoning the company? Interesting.

But the decision to use Stripe or not is yours, of course. You were offered a good suggestion for a cheaper alternative to a merchant account, and if you don’t like it, that’s fine. In addition to wanting a toll-free phone number, do you have any other criteria we should know about? It would save members wasting your time (and theirs) by making unsuitable suggestions.

Good to know, but I still don’t see why they wouldn’t have a tele # for SALES. (I get why you would channel customer service inquiries through a web-form/e-mail.

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I don’t shop at Amazon because they are an evil company, but that s another issue.

Yes, I buy things online from companies without calling first. But credit card processing is not buying a pink sweater for my poodle…

Was that necessary?


If you read my OP, I was not asking for advice on alternatives to my current merchant account provider…

Thanks @ralphm for telling me about Stripe. I’ll keep it in mind, but the tele # thing still bugs me. (I always expect toll-free sales #'s to call. I can handle web support after I speak with humans in sales.)

What do your current ToS say?

[quote=“mikey_w, post:1, topic:206715”]
I could contact the vendor, but I’m sure they would make me reapply, and then I risk being declined.
[/quote]If they approved your account for one type of business, they may well require you to reapply to use a merchant account for a different type of business. You have a legally-binding agreement between you and the provider; it normally requires the consent of both parties to vary such an agreement.

I don’t really see how you can do this without contacting the provider; they may surprise you by agreeing readily, but until you ask you won’t know.

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