Collection Merchant Accounts

Collection Merchant Accounts

The collection industry has been growing along with debt for unpaid purchases, bills, services, and other debts. There are over 1 billion credit cards open in the U.S. alone, and each American household owes an average of about $135,000 in debt. Factor in the complexity of the ever-growing internet marketplace, and it’s no wonder that consumers slip through the cracks and neglect to pay for provided goods and services.

Despite a notoriously bad reputation, debt collectors work hard to get companies money, and are often honest, legitimate agencies. A reliable and timely merchant account will help lower the risks inherent to the collection industry, but since collections accounts are high-risk, it is difficult for newer and smaller agencies to get approval for merchant accounts that ensure timely and reliable payment processing.

Why is debt collection a high risk business?

Payment processing companies often deny applications for merchant accounts from collection agencies, especially smaller, or less established agencies because of unstable cash flow and poor reputation. A lot of profit stands to be made from pursuing debts. Unfortunately, a variety of factors make it difficult to collect payment successfully and consistently, in turn destabilizing cash flow and harming your agency’s reputation. The following are some of the more common risks faced by collection agencies and how to decrease them.

The risk: Debtors can’t afford their debt

Many consumers simply have other priorities for their paychecks than paying off debt collectors, especially for amounts owed years prior. They know that they need to pay off debts eventually, but that their credit score may have already been damaged, regardless of whether they now close out their account with the creditor.

What to do about it: Make it easier to pay and inconvenient not to pay

If you don’t offer convenient ways for debtors to pay, they won’t try very hard to comply with requests for payment—especially those who owe money on delinquent accounts. One of the most likely ways to deter someone from paying their debt as soon as possible is not offering several clear options for payment. These options should include

  • ACH / echecks
  • Debit card payments
  • Accept payments online on your website
  • Accept payments by phone

Accepting payments through various formats and methods will make it more difficult for debtors to delay paying your agency and thus destabilizing your agency’s cash flow. 

Keep in mind that many debtors cannot afford their payments, and may not have room on their  cards to make payments on their debts. E-checks are a more convenient payment option that can be used by a wider range of consumers to pay off debts. This improves the consumer’s credit score, and profits your agency. The right merchant account will offer several payment processing options, and should also offer verification services to prevent fraudulent or otherwise unreliable payments.

Read more about e-checks for more reliable payment.

The risk: Chargebacks

Cardholders can easily have their bank withdraw money from yours without permission if the cardholder claims he or she did not authorize a payment. This happens for a number of reasons, some legitimate and some not, but the bottom line is that it hurts your business to have money taken back out of your bank account, after which, you are forced to continue attempting to collect the debt.

This also poses a problem for the employees of collection agencies, many of whom are paid based on how fast they can get consumers to pay their amount owed. Bank account information is more reliable than card information, improving financial stability for your employees and lowering the turnover rate at your company.

What to do about it: Use e-checks, make it inconvenient to dispute charges

Consumers are protected by the ability to claim identity theft or otherwise unauthorized payments. It’s more difficult to reclaim money paid with an e-check than with debit or credit card information. Collecting payment through bank account information also reduces the need to update payment information, and prevents erratic cash flow back out of your company’s account due to chargebacks.

Read more about how to handle and prevent chargebacks.

The risk: Debt collection agencies have a poor reputation

Not only are collection agencies known among consumers for incessant phone calls, angry letters and poor customer service, but those in the collection industry are regarded as high-risk accounts, unless the company has a long, well-established history.

What to do about it: Open the right merchant account, verify debts and operate honestly

With a reliable merchant account, you should be able to verify accounts and payments. This prevents back-and-forth discussion with creditors, consumers and credit bureaus to settle accounts and collect money owed. ACH payments or e-checks also decrease time spent having to contact and re-contact consumers to successfully transfer payment. The less time calling or writing debtors, the less likely you are to be perceived as aggressive and more likely you are to be paid.

Some collection agencies purchase debts that may have been acquired previously by other collectors, and attempt to collect the debt without verifying its legitimacy. To encourage a positive reputation for your agency, don’t purchase debt that hasn’t been verified. “Zombie debt,” though cheap to purchase from creditors or other collectors, is easily disputed, and leads to negative perceptions of your agency and limited cooperation of debtors.

Now what?

If you’ve decided that you do want to pursue better ways to ensure financial stability and higher collection rates, find the right merchant account to help lower the risks associated with the collections industry. Take advantage of different payment options to make it easier and more convenient to pay, and inconvenient not to pay. Bank account information is more reliable for your business than credit card information, and your merchant account provider should offer services against fraudulent payments.

Why Echecks are Replacing Paper

What is an Electronic Check

An eCheck or electronic check is an electronic version of a traditional paper based check.

An echeck account gives you the ability to automatically debit funds from your customers bank accounts.  Funds are then deposited into your business bank account.

Customers  provide their bank routing & account numbers.  Along with an authorization for you to debit their bank account for the money due. That’s all it takes.  

Echecks are the modern way to accept check payments. No trips to the bank. No paper to deal with.  

Great, But How do they Work?

You can accept checks online with a simple API integration to your website. You can take check by phone, fax and email orders through a virtual terminal.  

ACH echecks are remarkably effective for recurring payments.  Customers rarely change bank accounts. Payments continue uninterrupted month after month, with no need to update account information.  

Compare this with card payments.  Since one in five cards are reissued each year, you have to constantly update card data in order for recurring transactions to be approved.   Which is time-consuming, labor intensive, and costly.

Numerous Benefits of Electronic Checks

Echecks  save you time and lower your operating expenses.  And you eliminate the hassle of dealing with paper checks.  

You can easily and digitally send and receive payments without moving an inch. However, these aren’t the only advantages of eChecks.

Minimizing Processing Expenses up to 60% – Electronic check processing can save you 50-80% over the cost of credit card processing

Quick Funds – eChecks are processed electronically and clear much more quickly than paper items.

eChecks are Greener – No more dealing with paper. eChecks minimize carbon emissions by saving 67.4 million gallons of fuel and reduce greenhouse gasses and emission by more than 3.6 million tons.


Paper checks are quickly becoming extinct. Electronic checks are faster, safer, and more cost effective. And are rapidly becoming the payment option of choice for businesses that accept check payments.  

How are you processing your check payments?  

Contact today 


eChecks for Online Merchants

Accept Checks Online

Want an easy way to increase sales 8-20%?  While saving money on payment processing costs? Simply add echecks  as a payment option to your checkout page.

Get More Orders

Electronic checks give customers another way to buy from you. Obviously, the more ways customers have to pay you, the more sales you will make.

The Federal Reserve reports than 27% of Americans do not have credit cards. Yet more than 90% of US households have bank accounts and can make purchases with electronic checks.

Moreover, many Americans with cards are either near or at their limits. When a card sale is denied, offer the buyer the opportunity to pay with an electronic check instead. You’ll be amazed at the number of sales you’ll capture that otherwise would be lost.

Reduced Risk for You

Credit card transactions have a higher risk of contingent liabilities for merchants than do electronic check transactions.

Buyers can chargeback a credit card transaction for up 180 days after a purchase is made. Yet, with echecks, a consumer has only 60 days to revoke a transaction. And for business-to-business transactions, the buyer has only 3 days to revoke a transaction.

It’s also more difficult to revoke an electronic check transaction than a credit card transaction. For card payments, customers are able to call their card issuing bank to initiate a chargeback. The issuing bank usually takes the side of the consumer against the merchant.

However, to revoke a check transaction, a consumer often has to swear out an affidavit to chargeback a transaction, a more challenging and time consuming process.

Competitive Advantage

Online shoppers have virtually unlimited sites from which to buy goods and services. After all the time and effort you spend trying to get buyers to visit your site, it is a shame to loss a sale because you don’t accept echecks.  

With a fast click of a mouse, you can lose a sale to your competitors who offer echecks as a payment option if you don’t.


Alternative payment options such as electronic checks are among the fastest growing sources of increased revenues for internet merchants.

Shoppers trust electronic check payments.  Millions of Americans regularly pay for goods and services with echecks. If you don’t accept electronic checks, you lose sales to your competitors who do.  

Add electronic checks to your checkout page.  Get more sales from customers who don’t have cards or are maxed out on cards.  Or simply prefer to pay you with an electronic check.

Interested in increasing sales with echeck payments?  

Contact info@nationalach today.

High Volume Merchant Accounts

Echecks Boost Profits for High Volume Merchants

High volume merchants discover that adding electronic check processing is one of the easiest ways to increase sales and profits.  

The ACH network the oldest and most reliable electronic payment method available in the United States. As the ACH network continued to expand over the years, it managed to preserve its versatility and dependability.

For high volume merchants, using ACH payments is extremely beneficial in converting shoppers to buyers. 

A Snapshot of the ACH Network

While the overall results for 2015 are still not in, the processing capability and outstanding potential of the ACH network are illustrated by the results of 2014. In April 2015, the National Automated Clearing House Association announced that in 2014, the ACH network facilitated 23 billion payments, which is a 1 billion increase compared with year of 2013.

The WEB transactions represent one of the most promising segments, as they went up by 10.2% in the same interval. The introduction of Same Day ACH will further improve the efficiency of the network by allowing all parties involved to move funds with the speed that is needed in our fast-paced modern times.

High Volume ACH Payments for Your Business

You will find multiple advantages in using ACH payments on your website. The popularity of electronic check payments among consumers results from the favorable way it compares with credit card payments.

Not having to provide card information introduces a degree of convenience that makes a great deal of difference when the customer reaches the checkout page. High volume merchants discover that the fees for ACH payments are considerably lower compared with the ones for credit card payments.

ACH payments provide higher security to both you and your customers through its low chargeback and fraud rate.

ACH payments are compatible with the increasingly popular subscription-based business models through its recurring payment option.


Once implemented, ACH payments make an enormous difference in terms of profits for high volume merchants.  

ACH processing accounts give you an affordable way to accept payments. And ACH merchant accounts are easier to obtain than card processing accounts.  

Offering your customers the ability to pay you with an ACH echeck on your website increases your sales while  lowering  your processing expenses.  

Are you interested in adding ACH echecks to your high volume merchant account?  

Contact today.

High Risk ACH Processing Compared Echecks

High Risk Merchants Prefer E Checks

In the US, there are two methods of debiting a bank account.  First is ACH debits, which process transactions through the Automated Clearing House network.  The second is echecks, which processes payments via bank-to-bank transfers.

Many merchants who were using high risk ACH processing are moving away from ACH payments and are using echecks instead.  The reason for the change is that NACHA is changing the rules regarding the number of returned transactions that are permitted to flow through the ACH network.

Beginning in September 2015, the threshold for unauthorized returns (also known as revokes or chargebacks) is being lowered to 0.5% from the current from 1%.  Returns for administrative or account-data errors must be no greater than 3%,   In addition overall returns for any reason must not exceed 15%. 

If return rates go over the levels, ODFIs risk investigation or enforcement proceedings.  The proceedings includes an 8 step process that examines every part of the banks’ ACH processing. 

Let’s get real.  How many ODFIs do you think are going to be willing to risk an examination?   In reality, most banks will get rid of high risk ACH processing merchants rather than take any chances.

Echecks Different than High Risk ACH Processing

The user experience with both ACH processing and echecks is the same. The customer provides bank routing and account number information and authorizes the transaction.

The difference is on the back end processing. 

With ACH, transactions clear through the ACH network.  Therefore, the transactions are subject to NACHA rules. 

Echecks are cleared through bank-to-bank data exchange.    These transactions are governed by the UCC and long-standing laws regarding checks.

As a result, echeck transactions do not need to adhere to the tight and rigid rules governing ACH payment processing.  There is substantially more leeway for returned and revoked transactions.

How High Risk Merchants Set Up E Check Processing

The application for electronic check processing is very simple.  You submit an application along with supporting documents.   Allow 5-7 business days for the account to be activated.  Then you’re good to go.

You can integrate echeck processing with your websites via an API to accept checks online.  You can accept check by phone, mail and fax orders using a virtual terminal.  And you also have the option of uploading batch transactions through a secure FTP site.

Are you a high risk merchant that wants to increase profits with echecks?

Contact today.

Online Money Transfer ACH and Check 21 Processing

ACH and Check21 echeck processing service for online money transfer companies.  US customers can quickly and easily send payments using a direct debit from their bank account.

The World Bank reports that money remittances were $436 billion in 2014 and will increase to $518 billion by 2016. The majority of the payments are sent by migrants to families left back home.

Payment Processing and Online Money Transfer Platforms

Integration to your online transfer processing platform is accomplished via an API. All transaction, management, and reporting functions will reside on your system, simplifying account reconciliation. Virtual terminals and batch uploads to a secure FTP site can also be provided.

There are two methods of debiting a US consumer bank account. One is through the ACH network. The second is through Check 21 technology.

Many online money transfers companies are moving to Check 21 processing.  Check processing is quicker to setup. And Check 21 requires far less paperwork to establish an account compared to ACH processing.

Comparison of Check 21 echecks with ACH

The end result of both eCheck21 and ACH processing is the same. Money is debited from US consumers’ accounts and settled to the online money transfer company account.

The chart below shows the benefits for money transfer companies of  Check 21 compared with ACH payment processing.

3 days to clear transactionsFast clearing. Same day clearing for transactions submitted before 3 pm. Next day clearing for transaction submitted after 3.
Settlements take 2 days after transactions clearSettlement available same day transactions clear
Third party ACH processor receives the funds and settles to youDeposits directly to your business account, eliminating the third party
Extensive paperwork and documentation necessaryRapid account set up with minimum of paperwork
Returns and revoked transaction thresholds requiredMore flexibility on returns and revoked items
US transactions onlyInternational and US transactions

eChecks on the Checkout Page

On the checkout page, your customer selects “pay with echeck” option. Customers enter the transaction information, including name, address, and account information and hits the “submit” button. Digital signatures can be used as an additional security feature for online payments, although this is not required for processing.

Electronic checks are a trusted way of making payments online. Any customer with a US bank account can send money. Rates for echecks are much less than for card transactions and are the preferred method of payment for most money transfer firms.

Are you an online money transfer company that wants to accept echecks?

Contact today