Posted by NationalACH on Oct 12, 2020
Collections Merchant Accounts

Collections merchant accounts offer flexible and cost-effective payment solutions for the collections industry. The accounts present the ideal solution for consumer and business debt collections, account, bill and debt collection services, delinquent account collections, and 1st, 2nd and 3rd party collections. National ACH’s collections merchant accounts enable collections agencies in the US to accept credit card and debit card transactions from payees at affordable rates and with exceptional benefits.

Why is the Collections Industry Considered Risky?

Collections Merchant Accounts
Collections Merchant Accounts

While the debt collection growing into a bigger and bigger industry every year, the industry is considered a risky one by regular banks.

Firstly, given that debt collections companies seek to recover funds from people already in debt, the risk of chargebacks immediately becomes higher.

This issue is exacerbated by the fact that using a credit card to pay a debt collection agency means that individual is creating more debt to pay off existing debt. The risk of chargeback to banks then increases as the payee can claim it was not authorized.  The fact that the chargeback window is up to 6 months only increases the risk of this happening even further.

Also weighing into the risk factor of the debt collection industry are external factors that have taken place in recent years. These include the global financial crises in the previous decade, the declining US economy, the coronavirus pandemic, and the additional regulations imposed on the banking industry.

Outside of these factors, many banks consider the reputation of the industry as one that should not be associated with their brand. This is despite debt collection firms providing valuable recovery services to companies owed money by debtors.

What Choices do Collection Agencies Have?

The choices of payment processing accounts are fewer than those available to companies in lower risk industries, and because of this, the costs for them can be at a premium.

Despite this, collections agencies can get access to good payment processing accounts at reasonable rates.

An increasingly important aspect of running a successful debt collection business is the ability to accept debit card payments. With more and more borrowers either not having a credit card or being declined the credit to obtain one, the need for debt collectors to accept debit card payments becomes more important.

How can National ACH’s Collections Merchant Accounts Help?

Not only do debt collection agencies find it difficult to gain approval for payment processing accounts, but they often need more than one account. This is because more than one account is advisable in order to diversify the company’s processing capability and volumes.

Diversifying payment accounts also means collections firms are not reliant on one bank, which can be risky for smooth business operations.

Given the additional regulation that is likely to be imposed on debt collection agencies in the not-too-distant future, now is the perfect time to consider opening new collections merchant accounts.

With a dedicate collections merchant account from National ACH, you get a payment processing partner that understands the debt collection industry and the risks involved. Instead of dismissing legitimate debt collections companies as being too risky, National ACH’s approach is to understand the complexities of the industry and help to guard against fraud and chargebacks.

With this acceptance of the risks and complexities of the industry, National ACH’s collections merchants accounts are uniquely positioned to provide effective payment processing solutions. Working in partnership with our customers from the debt collection industry enables us to provide a range of solutions tailored for the market. This enables our payment accounts to offer competitive processing rates, flexible terms, and specialized services to suit all types of debt collection firm.

Find Out More

Find out more and apply online for our collections merchant accounts

Free free to email  Or call 866-ACH-7600 today.