We provide merchant accounts for Debt Collection Companies and Agencies. The debt collection business is booming right now, even more so in a recessionary environment. Anything debt related in considered high risk for the following reasons: chargeback ration is higher than normal, the average ticket size is high, and technically, it’s against Association rules to process credit cards with debt related products and services. The risk category is also due to the function of debt collection agency which is to collect outstanding debt from people who are having a hard time paying their creditors or just don’t have the funds available, so there is an increased risk. Additionally, there are several rules and regulations that the industry has to obey.
Because of the risk, merchants will find that when searching for rates to open an account, they will notice that the rates are significantly higher than a regular merchant account sich as a retail card present environment where the customer swipes their credit card.
The ACH merchant accounts that we offer is very flexible in terms of chargeback. So long as the transaction are authorized by the customers via written authorization or phone recorded authorization, then merchants don’t have to worry so much about chargeback ratio. There are certain merchants with chargeback ration over 10%. It will cost a business more money as chargeback fees are generally between $30 $55 on average. If a merchant is able to find a credit card processor for collections (which is very difficult), the chargeback ratio are not as flexible and too much can cause the account to by shutdown permanently.
It is quite difficult for companies involved in this type of business to negotiate a lower rate unless the companies’ monthly volume is in the rage of $250,000 per month and up. Most processors and lending institutions are willing to work with you on a case by case basis. The rates we provide are already lower than other when it comes to this industry.
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