No, most businesses should NOT be using multiple payment processors.
Anyone who tells you otherwise is likely trying to sell you payment processing services or a payment orchestration platform (which only exists to manage multiple processors).
There’s a ton of misinformation online about the supposed “benefits” of a multi-processor payment acceptance strategy. But the majority of those arguments don’t hold water, and I’ll debunk them below.
Why it Doesn’t Make Sense for Businesses to Use Multiple Payment Processors
The case for using multiple payment processors is based on outdated information about payment processing capabilities and how processor pricing actually works.
When you examine the practical reality of having multiple payment processors, you’ll quickly realize that this is actually way more expensive and far more complex than a single processor.
Using multiple processors creates more problems for your business than it solves. And the problems you’re trying to solve may not even exist.
Your Existing Processor Can Likely Support All of Your Needs
Modern payment processors offer virtually identical capabilities across the board.
Are some processors better than others? Absolutely.
But basically every processor can still handle any combination of card-present transactions, online transactions, mobile wallets, recurring billing, and whatever else you need. The technology in payments has reached a point where feature differentiation between major processors is minimal.
Need to add online payments to your retail operation? 99% chance your current processor supports that. Want to accept contactless payments? Your existing processor has terminals for that. Most processors also handle multi-currency processing.
So the idea that you need a second processor to access specific payment acceptance features is basically a myth invented by sales reps trying to win your business.
You’ll Actually Lose Negotiating Power (Despite What Others Might Tell You)
Some sources claim that having two processors creates negotiating leverage because you can pit one provider’s rates against the other to drive down costs. This is completely backwards.
Volume is one of your strongest negotiating levers.
When you split processing between two providers, each one just sees half the volume. That means each one has less incentive to offer competitive processing.
Processors don’t have any incentive to offer you better discounts if you’re only giving them 50% of your transactions.
But if you’re processing $1 million per month through a single processor instead of $500k, they’re far more likely to offer you volume discounts and other concessions.
It’s More Expensive
Cost is typically the number one reason why businesses consider any changes to their payment processing in the first place. But using multiple payment processors is not the answer and won’t do anything to help you from a cost perspective.
In fact, this will only increase your costs.
Beyond your per-transaction rates, every processor charges some form of monthly fees. From gateway fees to statement fees, PCI compliance fees, terminal fees, minimum processing fees, and some other bogus costs.
These charges hit your account regardless of volume. A few hundred dollars per month in fixed fees is standard (though not ideal). Now double that because you’re maintaining two processor relationships.
Even if you somehow negotiated slightly better rates with a second processor. Those extra fees can quickly erase any marginal savings. You’re paying two sets of fees for the same core service.
The Perceived Benefits Don’t Outweigh the Complexity
Let’s pretend for a second that some of the advantages of having multiple processors are actually legit. Would it be worth the headache?
Consider what it takes to maintain two (or more) payment processors.
- Bookkeeping and reconciliation nightmares: You’re now tracking deposits, chargebacks, and transactions across multiple platforms with different formats, settlement schedules, and fee structures.
- Technical and operational complications: Multiple processor integrations, API credentials, various platforms to troubleshoot when something goes wrong, and your staff needs to know which transactions went through which processor for customer service issues.
- Monitoring costs becomes impossible: Tracking rate increases, analyzing fee structures, and catching bogus charges are already challenging with one processor. Now you’re doing it twice, having to audit hundreds of line items across multiple statements every month.
- Equipment and hardware issues: Are you going to use one terminal for one processor and another terminal for the other? Or do you need new terminals that can route to either processor? How is this routing configured?
Even if you are theoretically optimizing for the best cost on each transaction, the reality is you won’t be able to effectively manage that optimization in real-time. This complexity just completely overshadows any marginal benefit, and it’s expensive to both set up and maintain a multi-processor acceptance strategy.
Authorization Approvals Shouldn’t Be a Problem
Another supposed “benefit” floating around from other sources is that your authorization approval rates will increase with two processors because if one declines a transaction you can run it through the other processor that might approve it.
This makes no sense and could actually get you into trouble.
First of all, how often are you getting authorization declines on legitimate transactions? This shouldn’t be happening often, and if it is, there’s some underlying issue that can be addressed with your current processor. Running declined transactions through as a second processor doesn’t fix anything — it just masks a bigger issue.
Second, systematically running declined cards through alternative processors as a workaround for authorization safeguards is exactly the kind of behavior that raises red flags with the card networks.
Immediately running a declined card through a second processor is the type of suspicious activity that could trigger fraud monitoring or even get your merchant account terminated.
Neither Should Downtime
Just like authorization declines shouldn’t be a problem, downtime shouldn’t be either.
I’ve seen MULTIPLE articles on the web say that a benefit of having two processors gives you backup redundancy in case the other goes down.
Really? How much processor downtime have you actually experienced in the last year?
For most businesses, the answer is zero. Or maybe a few minutes during a scheduled maintenance window.
Modern payment processors have robust infrastructure with 99.9%+ uptime rates.
Catastrophic processor outages affecting your ability to accept payments for extended periods are extremely rare.
Can it happen? Sure. But maintaining an entirely separate processor relationship with all of the extra costs and complexities to guard against something that MIGHT happen once every few years for an hour or two is overkill and completely unnecessary. You’re spending thousands of extra dollars (or more every year) to protect against a potential problem that barely exists.
When it Might Make Sense to Use Multiple Payment Processors
There are a handful of unique reasons when your business might want to consider using a second processor. 99% of the time this won’t apply to you, but you might fall into that 1% scenario if:
- International Growth — If you’re expanding into a specific international market where your current processor genuinely doesn’t support local payment methods or currency, then you may need a second processor.
- Surcharging in Different States — If your existing processor doesn’t support credit card surcharging and you’re expanding operations into states where it’s legal, you might consider a second processor that allows surcharging in those locations (though we still don’t recommend this).
- Small Business Sales Channel Expansion — Say you’re running a local retail store and want to start selling online via Shopify and Shopify Payments for simplicity, while keeping your existing processor for in-store transactions. But there will be zero connection between your online store and retail operation (no online returns in-store, no shipping in-store inventory online, etc.), essentially running two businesses under one roof (and even here, your existing processor should still be able to support you).
- Single Use Case With Embedded Payments — You’re getting new software with embedded payments (like a booking platform, marketplace software, or industry-specific tool), and you’re only using that software for those specific payments that’s completely separate from your main processing.
Even in these rare scenarios, you’re still much better off trying to get our existing processor to handle this stuff for you.
There’s a good chance that they can, and it will be much cheaper and easier to figure out than going to another provider altogether.
Final Thoughts
Unless you’re running an ultra-complex, multi-national business with different subsidiaries and divisions that almost operate as separate entities, there’s rarely a scenario where it makes sense to use multiple payment processors.
For the average business, two processors is always going to be overkill, and 3+ processors pretty much never makes sense.
This includes businesses processing millions of dollars in credit card volume per month. One processor is plenty.
The reality is that your current processor can handle everything you need. You just need to negotiate the best possible terms with them to ensure you’re not overpaying. So focus on analyzing your current costs, identifying bogus fees, and looking for ways to get better rates with your current provider.
If someone is telling you that you need multiple processors, ask yourself what they’re selling. Chances are, their services are directly tied to businesses using multiple providers.