Visa & Mastercard Services for Collection Agency
A strategic way to allow credit card transactions for collection agency, debt brokers, debt consoldiation, commercial collections, collecting on loans, collecting on NSFs, collecting on past due medical bills. Merchant accounts are now essential for most businesses especially the online merchants. Though we now find a variety of payment options, credit card transactions continue to be the most commonly used methods. The convenience of the whole procedure and the ease of obtaining a credit card make it important for businesses, big and small to allow credit card payments. Merchant accounts would also ensure that the funds, irrespective of the value of the order, can be received on time.
High Risk Options and Merchant Solutions
You would be able to find several credit card processing banks but then not all of them cater to the high risk businesses. Unlike popular belief it is not just the gambling and other industries that are considered high risk. Any business that would involve advance payments, high rates of chargebacks and higher possibility of fraudulent transactions would all be considered to be high risk. And payment delays are imminent in collection agencies’ routines. But this is a business that needs a merchant account very much. There are some online merchants involved in debt collection as well. They too would fall in the high risk category and would need special high risk merchant accounts. And in fact some banks would prefer to cater only to brick and mortar stores and not online merchants. This puts them in a higher risk of finding a credible option.
Why Do Processors Avoid Collection Agencies?
If you consider the debt collection norms, these are pretty volatile in every region and they would also vary largely from one area to another. Given that there is no assurance of what the laws would allow tomorrow, any normal credit card processor would hesitate getting into any kind of trouble. The payments are already delayed from a customer and it is these delayed payments that are being handled by the debt collection agencies. Expecting timely payments from a customer with bad credit records would be pointless and this makes the job of the debt collection agencies a riskier bet for the merchant accounts. After all if the debt collection agency doesn’t get the payment on time the processing bank would have to bear the costs.
There are numerous other such reasons that lead to the debt collection agencies being considered as high risk bets for the merchant account providers. So you would be forced to pay exorbitant fees or your application might be rejected. Approaching a high risk merchant account provider with a good ACH Processing/Check Processing cap, and one that would also have a suitable payment gateway for card not present situations would be a robust solution.
High Risk Merchant Account Provider
High risk merchants would know the high risk vs low risk scenarios and they would also have the best strategies to handle unexpected large chargebacks.
- Most of them come with no setup fees and they would also offer support with the virtual terminal and the gateway setup for the payment. This would make an economical choice for a small business that is just starting up.
- High risk merchants are well-versed in handling Startup/Business which has just been launched. These are often the most unpredictable. With little to no credit history and without a clear projection of their performance it would be a risk to bet on such companies. So a high risk merchant would come as a boon in such cases
- High risk merchant account providers function with the support of multiple underwriting banks. So irrespective of the amount involved they would be able to handle the situation without any trouble and would be able to initiate a timely refund for the party who is to be paid.
- You would also get additional benefits like easy check drafting, alteration of the processing limits and lots more which might be useful as your business starts growing.
Domestic USA Based Approvals
If you are confused whether an offshore merchant account would be essential for your business consider the legislations in the location chosen. Laws governing debt collection would vary from one region to another. Restricting to the domestic accounts would only narrow down your list of available options. But domestic accounts are often popular because they come with lower fees than offshore accounts. The application procedure would also be simpler in this case. Underwriting procedure would also be done in a shorter duration with a domestic account. There would be other differences that occur in the payout terms, pricing and account monitoring procedure. But then for some high risk businesses an offshore account would end up to be a better option. If the laws make it tougher to find a domestic high risk merchant sometimes the price paid would totally be justified for an offshore account. It is finally dependent on the actual business.