Posted by NationalACH on Jun 11, 2020
Debt Consolidation Merchant Accounts

Proven payment processing method for debit relief, debt settlement, and debt consolidation merchants. 

Many debt consolidation companies have challenges obtaining card processing merchant accounts.  The primary reason is that debt relief, settlement & consolidation firms traditionally have high chargebacks.

Now you have a payment processing option to help you protect your card and ACH merchant accounts. 

And gives you an effective payment option that allows much greater flexibility for higher chargebacks & returns than any other payment method.

Reasons Debt Consolidation, Relief, & Settlement Firms Have High Chargebacks.

Debt Relief, Debt Settlement and Debt Consolidation Merchant Accounts
Debt Relief, Debt Settlement and Debt Consolidation Merchant Accounts

No matter how well debt consolidation, debt settlement & debt relief companies manage card or ACH merchant accounts, chargebacks frequently exceed chargeback ratios required by the card brands or ACH network to keep accounts in good standing.  

Card brands require chargebacks be no higher than 1%.  ACH requires chargebacks to be 0.5%, less than half the number allowed by card brands.  This is often challenging for the industry due to the nature of the debt consolidation, settlement, and relief.

The consumer demographic for those requiring help with debt means that cash flow is often an issue.  Therefore, when a payment for debt consolidation, settlement or relief services comes due, the consumer initiates a chargeback to avoid paying for the service.

How Debt Consolidation, Relief, & Settlement Companies Keep Chargebacks Under Control

Debt Relief, Debt Settlement and Debt Consolidation Merchant Accounts
Debt Relief, Debt Settlement and Debt Consolidation Merchant Accounts

Debt consolidation, settlement & relief companies often offer recurring billing plans to make it more convenient for consumers to pay. The greatest risk for chargebacks occurs with the first few recurring billing transactions.

To control chargebacks, companies can vet consumers using a unique method of processing payments with echecks.  

The echeck file is processed electronically end-to-end via X.9 files.  The processor assumes liability for chargebacks & returns.  Cleared funds are settled to your business bank account via an ACH credit, like the way card & ACH settlements are made.

This payment method allows for chargebacks & returns to be substantially higher than allowed by the ACH network or card brands. Giving you the freedom to confidently accept payments without jeopardizing your ACH or card merchant accounts.

Debt consolidation, relief or settlement merchants can use this effective payment method for the first few recurring payments to vet the customers.  When the company verifies the consumer will not chargeback a transaction and the consumer has established a good payment history without returned items, the customer can be transferred to ACH or card payments if you so desire. 

Additional Benefits to Debt Consolidation, Relief & Settlement Merchants

Merchant account providers for cards & and ACH merchant account generally have monthly caps on volume, stifling your ability to grow your business.   Our unique echeck payment processing platform eliminates caps on volumes.  You can process as much volume as you want.

Once your echeck merchant account is approved, unlimited processing capacity is available to you.  You can grow your business without worrying about arbitrary limits set by card & merchant account providers.

The echeck payment processing platform is integrated with ten financial institutions.  There are major benefits to you for using a payment processor that has multiple banks on the back end. 

Having multiple banks means that you always have payment processing backup.  If a bank decides to exit the high-risk arena, the other banks integrated with the echeck payment processing platform take over seamlessly.  Processing continues uninterrupted, with no risk to your account.  

Using multiple banks also gives the processor the ability to distribute revokes & returns amongst various financial institutions.  Ultimately this protects your echeck merchant account because diversified processing eliminates the dependence on a single bank. 

How the Echeck Platform is Different Than Other “Echeck”  Processors

The term echecks is a generic term that is used in different ways. The most common use is by echeck processors who simply create “substitute checks” that look like paper checks. 

The substitute checks are then scanned, couriered, overnighted, or mailed to the merchant’s own business bank for deposit. The merchant is liable for the chargebacks & returns that are cleared through the business bank account.

This method of processing echecks rarely works out well for high risk merchants.  Business banks do not like to see chargebacks or returns flow through a business bank account.  When this happens, the business bank account is flagged.  And the merchant risks losing its operating bank account.

Additionally, some banks that your customers use will not honor “susbstitute checks” and reject these transactions with “Return to Maker” increasing return rates. 

Interested in finding out more?  Contact info@NationalACH today.  Or call 866-ACH-7600.