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Collection Agency Merchant Accounts

Our Best Picks for Debt Collection Merchant Account Providers

  1. Easy Pay Direct
  2. PaymentCloud
  3. eMerchantBroker
  4. Helcim
  5. Dharma Merchant Services

1. Easy Pay Direct

Easy Pay Direct works with high risk businesses, e-commerce, and retail stores. They will take time to understand your specific needs in order to cater to your business directly. EPD has worked with 60,000 different merchant accounts. Easy Pay Direct is designed to make your life easier. EPD accepts payments online, in store, and on any mobile device.

2. PaymentCloud

PaymentCloud works with low risk, medium risk, and high risk businesses. They offer customized merchant services in order to fit your unique business needs. PaymentCloud is your full suite merchant provider. They offer protection against fraud and chargebacks. They also offer multiple ways to process payments whether it's online, in store, or via credit card.

3. eMerchantBroker

eMerchantBroker prides itself on being high risk merchant account specialists. They offer aggressive prices, the best services, and excellent customer service. They are a full service merchant provider. EMB will approve you for an account whether your business is low or high risk or even somewhere in between. EMB considers themselves to be high risk merchant account specialists.

4. Helcim

Helcim offers unlimited access to all the tools you will need for seamless credit card processing. They also offer 100% transparent pricing with no hidden fees. With one free account, you get unlimited access to all Helcim has to offer. They believe when your business wins, they win too. Helcim can also work very well with small businesses.

5. Dharm Merchant Services

Dharma will provide you with all of the tools you need for easy credit card processing. There are no contracts or hidden fees when working with Dharma. They offer 24 hour priority funding and 24 hour tech support. Dharma will pass 100% of processing fees to credit card paying customers. With Dharma you get low rates and great solutions.

Being a collection agency, you deal with payments on a daily basis. Indeed, according to the most recent data, approximately 28% of Americans with a credit file have debt that is being paid for by someone else.

You want to make sure that your current merchant account provider does not charge you a high fee every time you process a payment. We can also help you with this. Individuals who work for collection agencies should look at this page to see who we recommend for merchant service providers.

What is a Collection Agency Merchant Account?

It is critical to collect money from debtors, and having a merchant account makes this possible. A merchant account works in the same way that a bank account does. When people pay, money is deposited into this account. The merchant account provider waives any transaction fees in this case.

Because the funds are sent directly to the business, there are no fees. Employees of certain businesses are not required to have a merchant account. Instead, they can manage their money with a payment aggregator. Individuals who work for collection agencies should avoid this and similar methods because they put themselves in danger.

Why are Merchant Accounts Needed by Debt Collection Companies?

Any business that wishes to accept and process payments must have a merchant account. Payment processing is a complex process that necessitates a significant amount of effort behind the scenes to ensure that everything runs smoothly. Between the customer's account and the merchant's bank account, there is a lot of work to be done.

Do Merchant Account Providers Also Offer Payment Processing Services?

Some people believe it, while others do not. They most likely do, and they are better known as "merchant service providers." They offer merchant accounts as well as payment processing services.

A merchant account can be opened so that another company can process your payments. If you already have a merchant account, this type of arrangement is possible.

How is the Process of Payments for Collection Agencies?

There are two ways in which collecting agencies can be compensated. It is possible to carry out the following actions:

  • Through a payment gateway - Payment gateway, also known as an online point of sale system, works similarly to a credit card terminal. It enables people to make online purchases. Debt collectors can accept payments from debtors by integrating debt collector software with shopping carts and payment forms. 
  • Through a virtual terminal - You can log in using a virtual terminal if you have access to the Internet or a data connection. For each transaction, the merchant goes online and logs into their account. They filled out the information for each payment method (credit cards, debit cards, electronic checks, and ACH payments).

Payment Methods for Debt Collection Agencies

Collection agencies can accept a wide range of payment methods. That is correct, but it is dependent on the merchant service provider you choose. You might not be able to provide them all to your customers.

Debit Cards

Individuals have debit cards that are linked to their bank accounts. When they use them, the funds are deducted from their account immediately. The vast majority of people own debit cards and frequently use them to replace cash. This payment method should be compatible with any merchant account provider. They also have some drawbacks, such as a lack of resources.

Due to data breaches, lost or stolen cards, and card expiration dates, cardholder payment information is updated on a regular basis. Despite this, it is a convenient payment method with typically lower transaction fees.

Credit Cards

Some merchant account providers do not allow collection agencies to accept credit cards as payment, while others do. To be honest, there are numerous reasons for this. Many businesses believe that they will simply add to their existing debt in order to pay it off.

As many people who are in debt are aware, disputing a charge is simple. They can also do so for six months before being required to pay. They may seek chargebacks on payments made to collection agencies in order to postpone or completely eliminate payments.

Chargebacks pose a real risk to debt collectors, and a large number of them can result in the closure of your merchant account.

ACH and Electronic Checks

Clients can make payments by ACH or electronic check. They accomplish this by withdrawing funds from their personal bank account. This is a much safer payment method than using a credit card. It is also more stable because most people do not change their bank account information on a regular basis. In this case, there is no need for updates, and recurring payments can be set up quickly.

What is the Difference Between ACH and Echecks? Do You Really Need Both?

If you are the one receiving payment, the difference between electronic checks and ACH is minimal. Clients will be irritated. The back end of payment processing is distinct, and it has to do with how debits work. Because it is processed through NACHA's ACH network, an ACH payment is the least expensive method of payment.

According to NACHA's established rules, return rates must be less than 15% and chargebacks must be less than 0.5 percent. This can be difficult. They accomplish this by utilizing technology that connects banks and allows money to be exchanged between them. For chargebacks or returns, they do not use the ACH network. This gives them more alternatives for dealing with them.

Some debt collectors use electronic checks at first until their clients establish a payment history. They ultimately transfer them to ACH.

What to Consider Before Choosing a Collection Agency Merchant Account Provider

Before choosing a merchant service provider, there are numerous factors to consider. It is prudent to look into all of the following.

Chargeback Protection and Prevention

A credit card can be stolen, and if the owner reports it to their credit card company, a chargeback may occur. Occasionally, for whatever reason, someone will decide to contest a transaction. Because the debt collection industry employs a large number of people with bad or poor credit, it is a high-risk job.

Individuals who are deeply in debt and have limited financial resources are more likely to contest legitimate charges. It is very easy for a merchant account to be frozen or even closed if it receives an excessive number of chargebacks.

It's not just that there are a lot of providers who offer chargeback protection. There are also methods to avoid them. This is something to look for because it will help you keep your merchant account in good shape.

Payout Timeframe

When you receive payment, the funds will not be deposited directly into your business bank account. We had previously discussed what we needed to do. You'll want to know how long it will take to get paid for your company.

Some merchant account holders may eventually receive their money back. However, for high-risk businesses such as collection agencies, this may take longer. It is reasonable to expect payouts in 48-72 hours.

Rolling Reserves

You will almost certainly have rolling reserves regardless of which merchant account provider you choose. You are almost certain to receive them as a high-risk business, regardless of which company you choose.

This is something that many businesses, including debt collection agencies, do on a regular basis. This means that a portion of your payouts will be withheld for a set period of time, usually six months. This is what is known as a "rolling reserve."

After six months, a portion of the payments will be released. As the rolling reserves process is completed, new payments will be made. Certain merchant account providers will require high-risk businesses to keep a certain amount of cash on hand at all times.

That could change for others, as long as they don't go over the chargeback limit. There may be no rolling reserves after a while, or the percentage may be reduced.

Transaction Fees and Other Costs

Prior to working with a merchant service provider, customers must typically agree to specific fees. Among these are the following:

  • Transaction fees
  • A monthly gateway fee
  • A PCI compliance fee
  • A monthly minimum amount fee
  • A statement fee

In high-risk businesses, transaction fees can range from 3% to 5%. Each merchant account provider will charge different fees. This could be done on an interchange-plus, tiered, or flat-rate basis. In addition, each payment method will be charged a fee. E-checks are the most cost-effective method of payment.

How to Choose the Best Merchant Account Provider for Your Debt Collection Company

Let's get down to business and talk about how to choose a reliable merchant account provider. What to look for and what not to look for:

Avoid Long-Term Contracts

While it may be difficult to find a merchant account provider, there are some out there who will not lock you into a long-term contract. A company that asks for a three- to five-year contract should raise red flags.

If you change your mind and choose another company, you could face additional fees in the thousands of dollars. Contracts make sense because your business is high-risk in some ways, but they also make sense in other ways. Nonetheless, some companies offer short-term or even month-to-month contracts, making it possible to strike a deal.

Check to make sure you understand everything there is to know about what happens if you decide to stop using the service. Nothing irritates me more than having my account frozen or being overcharged for leaving early.

Check Reviews Carefully

There are numerous details about any payment processor or merchant account provider you are considering that you should be aware of. The Better Business Bureau will most likely be extremely helpful to you.

These three websites all offer the same service: online reviews of various payment processors. Furthermore, these reviews will provide you with some useful information to help you make your decision.

Make Sure Customer Service Is Top-Notch

Customer satisfaction is essential. It makes no difference who you use for merchant services. There will be complications from time to time. When they occur, you want to know that you can deal with them right away. Customer and technical support should be available from the best merchant account providers for collection agencies.

You could even hire a personal assistant to help you with everything. You should be able to contact customer service at any time of day or night, if possible.

Additional Information on Debt Collection Business Merchant Accounts Providers

After you've found a merchant account that meets your requirements, the next step is to get ready to apply for one. It's a good idea to think about what you'll see before you go.

What Documents are Needed to Open a Merchant Account?

Any merchant account provider with whom you wish to work will require you to provide proof of your business. Bring the following items:

  • Any information you have about your credit card processing history
  • Your business name and DBA
  • Business bank account and routing numbers
  • Contact information
  • Your business license and/or articles of organization
  • Your tax ID number
  • How long you’ve been in business
  • Bank statements

What is Underwriting?

The job of an underwriter is to assess risk. They want proof that you run a legitimate, reputable business that follows all applicable rules and regulations. They also want to know that your company will not pose a significant risk to the bank.

As long as your business or personal credit is clean, you should be able to get a loan. Underwriting doesn't have to be difficult.

How Long Does it Take to Get Merchant Account Approval?

The time it takes to approve your merchant account will depend on a variety of factors, including the following:

  1. How long does it take you to get your paperwork to the provider?
  2. How long it may take to find a merchant account acquiring bank.

All of your documents should be received by the company within a week. While the integration process will take some time, it is possible that it will be completed in less than a few minutes on occasion.

While we're talking about the best merchant account providers for collection agencies, here are some of our favorites:

In Review: The Best Merchant Account Providers for Collection Agencies

  1. Easy Pay Direct
  2. PaymentCloud
  3. eMerchantBroker
  4. Helcim
  5. Dharma Merchant Services

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