If you've ever been lucky enough to go through the process of setting up a merchant account and payment gateway, you know it can be a long and tricky process. The terminology, the fees, the forms to fill out...it's not fun. But it's a necessary evil. The alternative is PayPal, so let's not even go there.

Once you have a merchant account setup, it tends to run fairly smoothly. You pay the monthly fee and money shows up in your account, minus the occasional chargeback.

But what happens when you need a second merchant account? Why would you even need a second merchant account, or a third or fourth for that matter?

If I told you I can bring $250,000 in revenue to your business every month, you would probably do whatever it takes to work with me. But it's not that way with merchant account providers. Surprisingly, merchant accounts have a monthly cap on the total amount of transactions. So if your business is doing $75,000 per month in transactions and your growth shows that you will be at $100,000 next month, and your merchant account is capped at $80,000 per month, you had better find a second merchant account soon.

You would think that the more money you send to a company the better, but not with merchant account providers. It turns out they do not like chargebacks. The more transactions you send their way, the more likely they are to have to process and pay chargebacks - which eventually get billed to you, but not immediately.

So if your business is processing a high dollar amount in transactions each month, you will end up with multiple merchant accounts. This causes some interesting problems in whatever application or billing system you are running. First, refunds must go through the same merchant account as the original transaction. Merchant account providers will scream if you charge a customer $20 on a separate merchant account and refund the customer on their system - and for good reason. It's easy to commit fraud when you can't trace the flow of money through a system. Second, if you 'use up' the monthly limit on one account half way through the month, you must send all new transactions to a different system. You will end up creating what amounts to a 'load balancer' for merchant accounts to ensure that you do not reach the limit on one merchant account too soon.

The client I am working for processes a large amount of transactions each month and we have done what I've outlined above. Our team has essentially learned on-the-fly and built a system that can handle refunds and charges correctly. A load balancer for merchant accounts. Along the way, we've added a half dozen merchant accounts to the system and more are on the way. Once again, the ActiveMerchant library has been great. Some of the new merchant accounts were supported already, and with others, we've had to add support. Here are two that we are using that will someday make it into the ActiveMerchant library -

ActiveMerchant Support for the JetPay Gateway

ActiveMerchant Support for the FirstPay Gateway

An interesting side note on this issue. Many companies deal with this multiple merchant account issue and it can be very tricky. In particular, the chargebacks can really cause problems. A few years ago, the Denver-based airline Frontier had to file for bankruptcy. The cause, in simple terms, had to do with merchant accounts and chargebacks. So many flyers were telling their card company not to pay for already purchased tickets (for weather delays, cancellations, etc) that Frontier ended up having cashflow issues with their merchant providers. The only solution was to file for bankruptcy and fix system.