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Check out why merchant account is a good choice for collection agencies

If you are a debt collector broker you must be at your tether’s end with the constant rejections and denials for credit. In the credit card processing industry debt collection falls into the high-risk category. The reason is obvious:

  • Some merchants adopt unethical ways of extorting the debts which often are against the federal rules

  • They quote very high and often unreasonable rates

  • Staggeringly high number of disputes filed by customers over unlawful collections over phone and online

  • A biased view of underwrites about debtors and their moral values

  • Most often debtors never end up clearing their debts leading to high chargebacks

Because of the above factors, the industry is considered very toxic and unstable. The frequent changes to the rules and regulations that govern the system make the whole process very risky and inevitably in favor of the debtor. It is, therefore, no surprise that traditional banks and some credit card processing companies reject your application.

How can I become an online merchant and open a merchant account? 

It can be demotivating to find all doors closed when you want to begin your startup. But there are merchant account providers like us who have been in the market for several years and have the required expertise in high-risk merchant accounts. We can take you step by step through the entire process and not weigh you on the scale of low risk vs high risk.

Despite the risky nature of the business, there is stiff competition in the market of debt collectors. So, to begin with, you must open a website wherein a debtor can find out more about your company and approach you for help. Until a few years ago ACH processing was sufficient but not anymore; today you need to provide several payment options to your customers to retain them and build your business.

With credit card usage rampant everywhere there was a time when physical gateways and terminals were set up in stores to process payment and to deal with recurring billing, but with online transactions gaining speed payments are not dependent on the physical card anymore; actually, your signature is also not needed for online transactions.

The way forward is by becoming an online merchant who can offer payment in a variety of forms. Any reliable merchant account provider will help set up the payment gateway and virtual terminal essential for all online transactions. This way you can receive payments not only online but also via phone. These transactions are the typical card, not present transactions that require no signature.

You must choose an option wherein you are in a position to accept all major credit cards like Visa, Mastercard, Discover, and Amex. The more payment options you offer your clients the more business you can hope to generate.

Am I still eligible for a merchant account when I am denied/ closed and shut off by credit card processors?

Most credit card processing agents review accounts on a case by case basis. They check the payment processing history, bank statements, chargebacks if any before they approve your application. The application process is long and intimidating. Their fees and rates vary startup vs history and most often they are on the higher side because of the greater risk at hand.

If you began your business by using aggregators like PayPal, Stripe, and Square who at the hint of a chargeback will not hesitate to freeze your account and their customer service is also nothing great to talk about, then it is natural to be left cold and high and dry with nowhere to go.

If, as is the case with many collection agencies, your next resort was low-risk merchant account, it is natural to get rejected and denied because of the unstable nature of the industry. You will be heartened to know that there are a few high-risk merchant account providers like ours where you are eligible despite frequent denials and shutoffs from credit card processors.

What if I anew venture with zero experience and history?
Startups are a rage and you wanting to join the bandwagon is no surprise but your lack of experience in the field must not discourage you from moving ahead. Merchant account providers like us are pioneers in the field and have simplified the process of opening an account.

  • Our application process is extremely simple and quick

  • We do not collect any setup fees and there are no application fees.

  • There are no rolling reserve requirements are in place, unlike some others who keep a percentage of your credit card sales in reserve for a stipulated period of time and release it only at the end of the time period.

  • We liaise with multiple underwriting banks which ensures there is a constant flow of capital even if some banks reject the application.

What about Domestic and Offshore Options?

Ideally, a domestic account is suitable because of the security and the hold of the federal laws. But the criteria for opening this account are many – the company must be based in the US, it must have a bank account in the US and so on. Furthermore, not all businesses can hope to open a domestic account. Offshore accounts are better suited for high-risk ventures like debt collection.

Opening an offshore account is simple. The company can be anywhere on the globe. These accounts are not under the US law and your credit scores and history have a lesser role to play in deciding the fate of your account.

We work with a number of gateway providers and credit card payment processing companies that offer domestic and offshore options for our clients.

We are here to help, call us…

If you are concerned about the future of your debt collection business you can talk to our friendly support staff. Our customer care personnel are knowledgeable and will provide you with all details on how to open a merchant account and how beneficial it is for your establishment. Our merchant accounts are conveniently accessible from your smartphones, just download the iPhone and Android Mobile Apps and you are good to go.