I am interested in using sub-merchant accounts for settlement and tracking purposes...

Jessica Benzakein — Thu, 07 Jun 2007 18:42:07 GMT

Sub-merchant accounts are very useful for all merchants but especially for payroll processors. A sub-merchant account allows the “parent merchant” to track different aspects or layers of your business. For instance, if you are selling TVs, Radios and Cell Phones, you may want to track how much money you are making from TV sales vs how much money you are making from Cell Phone cells. Or if you are a payroll processor, you may want to track the different employers you process for – keeping their debits and credits grouped together by sub-merchant code. Remember, that when you, the payroll processor, send over a file, the gateway creates an individual transaction for each item but it does not automaticly keep those items or future items in "batches." By using sub-merchant, we can incorporate information already sent over on the batch header (or 5200 line) that would allow us to label each debit and credit with a specific code. That code can then be used for reporting and settlement purposes.

Not only can you track items, but you can opt to have the settlements for your sub-merchants deposited into or withdrawn from bank information you specify - your company bank account (escrow or holding) or directly from the employer's bank account. This is especially important if you have opted for a 1 day prefund requirement rather than the standard 2 day prefund requirement.

To set up a sub-merchant account, you will need to either manually input the information or if you have a large amount to input, you can send Support an email containing the sub-merchant code, company name, and bank information.

When it comes to the sub-merchant code, the information on your file must match the code you enter in our system. If the information does not match, or if you forget to add a sub-merchant prior to uploading transactions for them, the items will be defaulted to the parent account. This means that settlements for those items will be made to the bank information listed for the parent.

When establishing the sub-merchant code, the Gateway looks for whatever appears immediately after the 5200 but before the first space in the line. So an example would be:

5200DANDY DOG PET GROOMERS000000 0000000000PPDPAYROLL 075395070605 1063114700000001

52004001 DANDY DOG PET GROOMERS00 0000000000PPDPAYROLL 075395070605 1063114700000001

In the first example, the sub-merchant code must be DANDY because that is what appears immediately after the 5200 and before the first space in the line. It should be noted that if you have clients with the same first word, then the use of sub-merchants will be ineffective for those clients unless you altered the NACHA file prior to uploading it.

In the second example, the sub-merchant code must be 4001 because that is what appears immediately after the 5200 and before the first space in the line.

Also, please note that the the 5200 line also contains the pay date which we are going to use as the effective date for all the transactions in that batch. In the examples above, the date of the items is in red.

If you assign unique company ID numbers and wish to use those as the sub-merchant codes, you will either need to contact your software provider to ensure that they can make that change on your file or you will have to manually edit the entries prior to uploading to the Gateway.

Once you have added the submerchant, you are immediately taken to the "merchant summary page" of that sub. Before going back to the parent account to create additional subs, you will need to edit the bank information listed for the newly created sub if you intend for settlements to go directly to the sub rather than to your own company bank account. Once you have made this change, you can go back to your parent account (using the Go To Parent link in the Merchant Information box on the summary page) and create additional subs.

As always, if you have ANY questions regarding account set up, please contact our merchant support department.

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I am interested in using sub-merchant accounts for settlement and tracking purposes...