12, Jan 2013
The Security of Separate Business Merchant Accounts
Most people assume that they can just use their regular bank account when they set up their new company. While it is true that this can be done, it is not always the best idea to mix business and pleasure in this manner. Most enterprises prefer to use dedicated business merchant accounts in order to keep their accounts manageable and comprehensible by the time the end of the year rolls around.
Another reason for maintaining separate business merchant accounts is that these are generally established for the purpose of accepting credit cards from their customers. The rub with these types of account is that all of the credit card gateway providers insist upon two-way access for the account that services one’s credit card transactions. In other words, not only can they deposit money into your account when a transaction is approved, but they can also automatically withdraw money back out if a transaction is later cancelled or voided in some fashion.
This is not a question of sinister intent, but merely of common business practice. However, one would not really want other people to have free access to any funds other than the ones specifically derived from credit card transactions. It is much better to keep a separate general business account as well as a separate personal account that is not subject to someone withdrawing money from the account without your knowing about it.
The issue is not whether such action is justifiable, but whether it might cause you heartache through spending money which you assume is in the account but has actually been withdrawn without prior notification. This can unwittingly damage a business reputation that is otherwise sterling. Because we live in an era where credit cards are a major part of any businesses revenue stream, merchant accounts are an absolute necessity.
Insulating one’s general affairs from credit card fraud, hackers, or simple reversed payments is a wise precaution as well as an easy way to track the relative percentage of credit sales as opposed to cash sales.