Posted by NationalACH on Jul 26, 2017
Lenders Merchant Account

If you’ve ever needed to take out a payday loan, you know how essential the service can be for some people who just need a little help. If you manage a payday loan servicing business, you know how difficult it is to find a merchant account provider willing to work with you to provide convenient repayment options to your customers.

This difficulty arises because loan servicing merchants are considered “high risk” by most financial institutions due to the increased likelihood of defaulted payments. Because most of the customers taking out a payday loan are financially vulnerable, repayment can be difficult to collect. When payment is not collected, the merchant account provider, not the loan service providers, is held financially accountable.

Loan servicing businesses therefore must open a merchant account with a provider that specializes in the industry

Many banks refuse to provide merchant accounts to loan servicing businesses, but luckily, there are account providers that specialize in processing high-risk payments, including for loan servicers, lenders and brokers.

A merchant account provider that works with high-risk merchants will be able to reduce risks associated with your business. One of the simplest ways to reduce risk and collect more payments is to offer more electronic payment options for customers.

How can electronic payments make a difference for loan servicing merchants?

This is simple: offering your customers more ways to repay their loans makes it more likely that they will do so. Especially if you offer convenient repayment methods. If customers have to go out of their way to figure out how to repay their loan, when they may already be in a financially tough spot, your customer is probably on his or her way to defaulting.

Electronic payments are essential to the convenience of repayment, especially in today’s society of online shopping, online bank accounts, cell phone abundance and the decline of the use of cash to make recurring payments. Though many customers are at risk for neglecting to repay their loans or make payments on time, most customers want to improve their financial standing, and the easier to do this, the better for your business.

The following are electronic payment methods that all loan servicing businesses should offer their customers:

  • Electronic Checks

E-check payments can be made by phone, mail and fax through a virtual terminal. These payments are much safer for merchants than card transactions, especially for recurring charges. After all, customers shouldn’t pay off debt by incurring more debt, so you absolutely need to accept electronic check payments.

If your customers are repaying their loans on a set monthly basis, e-checks prevent you from having to deal with expired or replaced credit cards and frequently updated payment information. There’s also less room for customers to initiate a chargeback through payments coming directly out of their bank account than from a credit card.

  • Same Day ACH

Same Day ACH payments means you can disperse loans to your customers the same day they discuss their financial situation with you. Same Day ACH means that there are three windows for batch processing every day, to be settled the same day. Besides simply giving your business a competitive edge over others, Same Day ACH debits allow for mistakes between transactions to be identified and corrected the same day they happen.

Learn more about Same Day ACH, and the introduction of same-day debits to be introduced in September.

  • Debit Card Processing

Debit card payments are a convenient option for customers who need to pay by the phone, in person or online. Some customers also prefer to set up recurring payments via debit card, but the safer option is, again, accepting electronic checks.

This service is available for retail locations and online lenders with payment processing history and a monthly minimum processing amount of $50,000.


National ACH Merchant Accounts

To be successful in a high-risk business, you need a merchant account provider that you can trust to be reliable and helpful at all times. Processing electronic payments not only offers convenience to your customers, but supports your business’ growth. Besides an array of processing services offered, National ACH offers constant technical support and dependable account management.

If your business has a high chargeback ratio, National ACH has fraud-fighting and chargeback prevention tools to lower that rate. If you need high ticket or high volume payment processing, we specialize in that as well. And all of these services will be managed under one source to make your business operations simpler and easier.

Will your business qualify for a merchant account?

To apply for an e-check, ACH or debit card merchant account, submit an application to be reviewed and approved within 5-7 business days. You will need to submit documents like statements indicating payment processing history, information about your business and bank s