Debt Collection Merchant Account

Debt Collection Merchant Accounts

Are you a debt collection agency that needs to accept payments from debtors?  You’ve landed in the right spot.  Easily accept credit / debit cards, ACH, and echecks online, by phone, mail, and via mobile devices.

Debt collection agencies in all industry segments are welcome to apply including:

  • Student Loan Debt Collection
  • Debt Collection for Lenders and Loan Service Provider
  • Debt Consolidation
  • Health Care Medical Debt Collection
  • Installment Lending Debt Collection
  • Payday Loan Debt Collection
  • Personal and Commercial Debt Collection
  • Debt Collection for Auto Lenders, Title Lenders, Mortgage Lenders
  • Debt Collection for Memberships / Subscriptions
  • Any Business that Collects Payments from Debtors

Electronic payment processing automates collections of receivables & improves cash flow.  Recurring billing plans are a standard feature on all accounts.  Recurring payments make it convenient for debtors to pay you on a regular basis.


Debt Collection Agencies Primed for Growth

Is there a need for debt collection agencies?  You bet there is.  Industry growth is escalating as US consumers continue to borrow money without thinking about how to pay it back down the road. 

The average American household carries $7000 in revolving credit card debt a month.  Americans with student loans owe an average of $48,000. 

Overall, Americans owe $1.3 trillion in auto loan debt, $1.4 trillion in student loan debt, and $9.1 trillion in mortgage debt.  You can easily see the reason US household debt load averages $136,000

The increasing cost of living combine with high credit card interest rates & student loan burdens put the squeeze on debtors.   Miss a few payments and the debt is referred to collection agencies that work on behalf of the banks and creditors to get the money that is owned to them.

Debt collection agencies need smoothly efficient merchant accounts systems to maximize profits.  Along with recurring billing plans that make it convenient for debtors to repay on a regular basis. 


Multiple Payment Methods for Debt Collection

The primary electronic payment methods US debtors use are credit cards, debit cards, and echecks / ACH.   Naturally, the more payment methods you accept, the more money you make. 

Of course, credit cards offer a handy payment option.  Still, credit cards are not necessarily the best payment method for debt collection merchants.  Debit card payments and echeck / ACH  offer significant benefits over credit cards for repayment of debt.  


Debit Card Merchant Accounts for Debt Collectors

Debit cards are linked to bank accounts whereas credit cards are tied to a line of credit.  Many debtors no longer have access to credit cards or have maxed out existing credit lines.  Most debtors with bank accounts have debit cards.

Americans now use debit cards more often than credit cards for payments.  A debit card debt collection merchant account gives you the ability to accept debit card payments from debtors on a one time or recurring basis.

Although debit card payments are important to debt collection agencies, the downside is that debit card payment data frequently changes.  Every year more than 20% of debit cards are reissued due to expired dates, lost / stolen cards, and data breaches. 

Each time a card is reissued, you need to get updated payment information.  Updating card data is particularly important with recurring billing where a recurring payment will decline unless the payment data is current & accurate.  


Benefits of ACH / Echecks for Debt Collection

 Echecks & ACH payments electronically debit funds from debtors’ bank accounts.  ACH and echecks are the most effective method of processing debt repayments.  And expose you to less risk than card payments. 

ACH & echecks are more stable than card processing, particularly for recurring payments.  The reason is simple.  Bank accounts rarely change.  It’s a hassle to change bank accounts because payments for household bills are often tied to bank accounts.  As are direct deposits for wages. 

Since bank accounts are very stable over time, it is seldom necessary to update payment data associated with bank accounts.   Recurring payments continue without interruption.  Stabilizing cash flow and preventing  unnecessary revenue leakage.

Compare this to debit & credit cards.  Each year 20% of cards are reissued due to data breaches, lost or stolen cards, or expired dates.  Unless updated card information is received, recurring payment transactions will decline.  And you won’t get your money.

It takes time, money & labor to update card info.  And no matter how hard you try, you still may not get the data you need to run the payment.   This problem is eliminated with ACH / echecks payments. 


Difference Between ACH and Echecks & Why You Need Both

ACH and echecks are similar payment methods.  Both electronically debit funds from debtors bank accounts and settle cleared funds to you. The user experience is the same. The debtor provides routing & account numbers for the bank account from which. debt payments are debited on a one-time or recurring basis.  

The difference between ACH and echecks is the way the debits from the bank accounts are processed on the back end. 

ACH is the lowest cost processing method for collection agencies.  ACH payments are processed through the ACH network.  The ACH network is governed by which sets the rules for the network.   

To keep an ACH account in good standing, debt collection agency merchants need to keep revokes (chargebacks) under 0.5% and returns less than 15%.  Maintaining these ratios is challenging for merchants in many industries.  And particularly so for debt collectors due to the consumer demographic of debtors. 

Echecks are a great alternative to ACH if you have higher returns or revokes than are permitted by the ACH network. Echecks use bank-to-bank clearing technology for processing transactions rather than the ACH network. 

Therefore, ACH requirements regarding revokes & returns do not apply to echecks.  As a result, echecks give debt collection agencies  far greater flexibility for revoked and returned transactions than allowed by the ACH network. 

Some debt collection merchants use echecks for the first few recurring payments to “vet” the debtor. The collection agency verifies the debtor will not revoke a transaction and has a good payment history without returned items. At that point, the debtor is transitioned from echecks to ACH processing, primarily because processing rates for ACH are generally lower than for echecks. 


Credit Card Merchant Accounts for Debt Collection Agencies

Credit card merchant accounts are available to qualified debt collection agenciesDue to the nature of the industry, only a few acquiring banks accept debt collection agencies for credit card merchant accounts.  These banks prefer high volume merchants with payment processing history.

Acquiring banks classify debt collection agencies as high risk due to the high risk of chargebacks.  Disputing a credit card transaction is standard operating procedure for many debtors, who know that a chargeback can get rid of or delay payments.

The card brands do not like the idea of debtors using credit cards to incur more debt by paying an existing outstanding debt.  Most debtors already have issues with credit cards and paying bills.  Paying for a debt by going deeper into debt is not a good strategy. 

Once you are approved for a credit card debt collection merchant account, the real challenge begins after you start processing. It takes skill to keep chargebacks under control. If chargebacks go up, your credit card processing can be affected. 

Chargeback mitigation & prevention programs are helpful to keep chargebacks under control.  Still, due to the nature of the debt collection industry, chargebacks need to be monitored closely.


Applying for Your Debt Collection Merchant Account

A dedicated account debt collection merchant specialist is assigned to you to guide you through the application process.  The goal is for you to get the fastest approval possible with the best possible rates.

Applying for a debt collection merchant account is a straight forward process.  You apply along with supporting documents.

Supporting documents include:  ID for the signer on the account; voided check for the bank account where processing funds will be settled; 3 months of the most current bank statements; 3 months of the most recent processing statements, if applicable; and corporation or LLC documents. 

A complete application package is important for a quick approval.  Account approvals can be as fast as 1 day although most approvals take 3-5 days due to the high-risk classification associated with the industry.


How Underwriters Review Debt Collection Merchant Account Applications

The more information you can provide that presents your company in the best possible light, the better. 

Underwriters review the application file completely.  They also ensure debt collection merchants are properly licensed.  And that debt collection agencies comply with the Fair Debt Collection Practices Act. 

It’s wise to have a signer on the account who has good personal credit.  Otherwise, consider adding a co-signer who does.  Have enough money in your business bank account to support the monthly processing capacity you are requesting. 

Debt collectors with online operations must have a fully-functioning, secure website.  Be sure that all pages & links are operating correctly.  And that customer service contacts are clearly displayed along with privacy, refund & other polices.

During the application process, underwriters often “cold call” or email to see how service is handled.  If calls go to voice mail, make sure the message includes your company name and when the caller can expect a response.  If auto responders are used for emails, include the same information. Then respond as promised.


Reason Debt Collection Merchants Choose Us

Below are some of the reasons debt collection merchants chose to work with us:

  • Fast Approvals. A complete application package can be approved as quickly as one day. 
  • Low Rates.  Contact us today for a no-obligation rate comparison.   
  • Multiple Payment Methods.  Accept credit / debit cards and ACH / echecks quickly & easily.
  • Unlimited Recurring Billing Plans.  Customize recurring payments to meet the needs of your customers.  Convenient for debtors.  Profitable for you 
  • Secure Payment PCI Gateway.  Military grade encryption protects sensitive payment data.  And keeps your business safe from data breaches.  Integrate with your in-house systems.  Or to software & CRM platforms.
  • Rapid Settlements.  Next day funding.  Processing funds are deposited quickly. 
  • Multi-Channel Payments. Accept payments online. Use virtual terminals for phone & mail payments.  Take payments from mobile devices.   Or upload files for bulk processing.

Let Us Work for You

Your Success is Our Mission

At National ACH, we’ve done our homework on payments. Use our expertise to get the payment processing capacity you need to manage & grow your business. Our “niche” market is high risk & high volume payment processing. Yet, standard risk merchants also benefit from our services. We are always happy to talk with you, with no obligation. Discover top notch service along with the iron-clad secure processing solutions you are looking for. Payments power your business success.


National ACH is a one-stop-shop for all your merchant service needs.

Debit Credit Card Processing

High Volume US & International merchant accounts

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ACH Processing

Auto debits your customers’ bank accounts.  Electronically settles funds  to you

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Same Day ACH Credits

Money sent today is received today

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Echecks Processing

More flexible than ACH for high risk merchants

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Contact us at 855-562-ACH2