There are several reasons a business is considered high risk. Not all debt collection companies are appropriately compliant. Lack of compliance as well as bending the rules by certain debt collection companies have caused the industry to be considered high-risk by banks & ISOs. The debt collection industry is also plagued with consumer complaints and a majority of those complaints are not made in good faith. This can lead to a high chargeback rate for your collection agency.
Unfortunately, there just seems to be a lot more concern by the banks when it comes to the number of chargebacks. Since the typical debt collection client already has a history of defaulting, this makes them notorious for calling the issuing bank and initiating a chargeback. Just like almost all industries that are considered high risk by the banks, you should have a great chargeback mitigation program in place in order to keep that rate low. Too many chargebacks can result in higher merchant account fees and even account suspension.
The banks and independent sales organizations (ISO’s) give a little more leeway to high-risk industries such as debt collection compared to more traditional industries. For instance, traditional industries are allowed up to 1% chargeback ratios without causing concern to the banks or ISOs. The high-risk industries are typically allowed higher chargeback ratios depending on the particular bank or ISO without causing them concern. Good news, though! This is at least 1 advantage to being considered a high-risk industry.
Low Fees for Collection Agency Merchant Accounts with WNY Merchant consulting
WNY Merchant Consulting offers numerous solutions for the debt collection industry. When you have everything in order, approvals are fast and easy. Having fostered relationships with over 30 banks and ISOs, our terms are the best in the industry.
The fees we are able to get for high-risk collection agency merchant accounts will make it seem like it’s actually low risk, whether you’ve been in business for 20+ years or you are relatively new. After speaking with one of our representatives, you will have a smile on your face.
Why Debt Collectors Partner with WNY Merchant Consulting
No application or setup fees–unlike just about everybody else. We don’t believe in hidden fees or nickel-and-diming our clients. Month-to-month contracts are available, eliminating early termination or cancellation fees.
Whether you have been in business many years or you have at least 6 months of processing history, First Card Payments will save you a minimum of 25% of the markup of your current fees most of the time
WNY Merchant Consulting has relationships with the owners, presidents, and CEOs of 30+ banks and ISOs, so our experts have the best chance to help you get approved for a high-risk collection agency merchant account.
WNYMC offers solutions regardless of the situation, including high chargeback rates, bad credit, and card not present (CNP) transactions, among countless others. Backup merchant accounts for debt collectors as an added layer of protection in case the primary account is terminated for any reason. Additional consultation services are available. Our expertise is what sets us apart. Not only will our experts help enable quick approval for your collection agency merchant account, but they also offer chargeback prevention tips and a mitigation program to keep those rates low. First Card Payments allows your debt collection business to grow without being limited by merchant processing caps.
Payment Gateways for Debt Collection Agencies
We have multiple secure payment gateways available strictly for the debt collection space to allow clients to use only the appropriate forms of payment. The advanced technology of these gateways makes them ideal for the debt collection industry.
What Is Debt Collection?
There are so many moving parts involved in running a business, so if one of those parts isn’t cooperating, it can cause issues. If a customer doesn’t pay within the allowed timeframe, a business has to go out of its way to chase them down, so to speak, and collect payment. When a business does not collect an outstanding balance from a client or customer, a debt collection agency steps in to assist with the task so the business can focus in order to keep things operating smoothly. Even though there’s a fee for these services from a debt collection agency and a business may not receive the full payment amount, it’s a huge plus for business owners to at least get part of what’s owed to them, where otherwise they might not have received anything at all.
Debt collection companies will sometimes purchase outstanding debt at a highly discounted price and then collect on it for themselves. Debt collection companies have been helping businesses collect lost revenue since what seems like the beginning of time; it has always been a necessary service.
Debt collection isn’t that simple, however, as issuing brands like Visa and Mastercard have certain guidelines. The types of debt collected by third parties can include, but is not limited to:
- Credit Card
- Auto loans
- Retail store credit and installment sales
- Returned checks
- Student loans
- Tickets and Fines
As a business owner in the debt collection industry, you need to have all your ducks in a row in order to be approved for a merchant processing account. Debt collection agency merchant accounts are among the most regulated. These high-risk accounts will always be subject to very thorough risk monitoring evaluations and periodic reviews based on processing activity, chargeback rates, marketing claims, as well as other factors.
Debt collectors must also be compliant with both FDCPA and TCPA regulations, which are frequently altered; it doesn’t make things any easier for businesses in this industry. The great news is that our team at First Card Payments stays on top of all necessary adjustments to keep your merchant account running smoothly. We will always keep you well informed and one step ahead of the game when it comes to having a healthy debt collection merchant account!