Due to the nature of their business, it can be quite challenging for a debt collection agency to secure credit card processing services.
Debt recovery agencies attempt to recover a debt from a person or business that is struggling to pay their creditors on time (or in some cases, not paying at all). It’s a classic example of “borrowing from Peter to pay Paul”, which historically has resulted in higher than average charge backs for the debt recovery industry.
We understand how critical it is for all businesses – including collection agencies – to be able to accept credit cards as payment from their clients. This is why we’ve established relationships with a variety of credit card processing banks that service the debt collection industry.
How can we help?
- If you’re currently processing credit cards for debt recovery, there is an excellent chance we can save you money by lowering the rates you are paying.
- If your collection agency is new, we can assist you in setting up dependable credit card processing services.
There are number of risk factors that can affect your application for a merchant account for your debt recovery agency.
First is your business model. Processors look at the type of services you provide; how your business promotes & publicizes its offerings; the type of customer care proffered; and the value associated with your services. In the event your business model is seen as risky from the processor’s perspective, your enterprise will need to set up the credit card merchant account by utilizing a provider that welcomes merchants with ‘risky’ businesses.
Second is the likelihood of charge backs your debt collection business venture might encounter. Why are chargebacks a possible problem? Well, in case your card processing company permits a merchant to carry on accepting credit cards while experiencing a higher chargeback ratio than is approved by the credit card associations, it can be subject to heavy penalties. And on top of that, if the merchant has a great number of chargebacks but cannot deal with the ensuing debt, the processing bank must do so.
Third, it goes without saying that when you already have a pretty good processing history, you will enjoy a lot more influence concerning negotiating processing rates and fees with the credit card merchant account company. But even if your venture is determined to be risky, you can still get competitive fees, based on your reasonable track record.
Howevr, even if your debt recovery agency business has a weak processing profile, you may still be alright, but it may well be more of a struggle to get approved. And if your collection business is fortunate enough to get approved, you will likely be assessed greater than normal credit card processing fees and charges.
Also, due to the elevated prospect of fraudulent activities, a good number of high-risk merchant credit card accounts contain special provisions such as funding delays, cash reserves, and possibly limits on processing volume.
Your Next Step:
Here at The Transaction Group we understand the difficulties with which decision makers have to cope when trying to locate a responsible credit card processing partner. One size doesn’t fit all when dealing with high risk processing for debt collection agencies. For this reason our company has developed multiple connections with credit card processors in order to be certain that we can identify the best suited merchant service for your specific enterprise.
To begin accepting credit and debit cards at your debt recovery business without delay, or for more information concerning applying for a merchant account so that you can enjoy credit card processing, apply online today or call us.