Payday Loan Merchant Accounts

Payday Loan Merchant Accounts

Lenders Increase Profits with E Checks

Payday loan merchant accounts with electronic checks are proven way to get more payments.  

In addition to payday loan merchant accounts, title lenders and installment loan companies can readily set up an echeck account.    

Echeck processing makes it easy for online installment and payday loan merchants to accept electronic checks for  for repayments from borrowers. Borrowers repay loans by authorizing direct debits from a bank checking or savings account.  The funds are then transferred to the lender’s bank account.

In addition, lenders use ACH credits to deposit funds into borrowers’ bank accounts.  Direct credits to borrowers’ bank accounts ensure receipt of funds in a timely fashion

Echeck services add value and profits for lenders. Standard features of an echeck account include:

  • Echeck debit repayments from borrowers’ bank accounts
  • ACH credits of funded loans into borrowers’ bank accounts
  • Stablizes recurring payments, protecting cash flow.
  • Full online reporting quickly tracks all transactions enhancing customer service

Echecks Better than Cards for Recurring Payments

Millions of Americans are already use the ACH network to pay bills.   Electronic checks are a trusted method of payment for US consumers.  

More Americans have bank accounts than cards.  And many US consumers are comfortable paying back loans with an echeck.

Echecks let you debit payments from US checking or savings account. Borrowers can receive ACH credits for loans to their bank account.  

Most importantly, echecks are a more stable and reliable source for collecting recurring payments of loans than are cards.  

Once a bank account is established, it is rarely changed.  Most borrowers find it’s simply too much of a hassle to change a bank account.  Especially when that account is already linked to payroll deposits, online bill payments etc.

Compare this with cards.  Each year more than 20% of all cards are reissued due to data breaches, expired numbers, bank mergers etc.  Updating recurring card payments is a challenge. 

And, it’s far easier for a card payment to be charged back to the merchant than an electronic check payment.  


Lenders can easily set up echeck processing services.  The application paperwork is straight-forward.  You submit an application along with supporting documents.  Approval of accounts takes 5-7 business days.

With an echeck account, you can accept checks online.  Accept check by phone, fax or mail payments. 

APIs make it easy to take interface with your website.  Or you can process payments through virtual terminals or FTP batch uploads.

Setting up your customers for automatic recurring billing is simple.  Schedule payments on any interval you choose.

Are you a lender searching for an echeck account?

Contact today.


Echeck Processing for Subprime Lenders

Echecks are a proven effective way for lenders to collect payments from consumers in the subprime market.  This article discusses the benefits of electronic check processing.

What is the Subprime Market?

Subprime lenders make loans to consumers who may have difficulty keeping up with repayments.  Subprime lenders include payday loan companies, title lenders, loan modification companies, and installment lenders.  Debt collection agencies also work with the subprime market.

Working with sub-prime customers presents special challenges to lenders.  The demographics of the customer base mean that there are higher levels of returns for non-sufficient funds (NSF).  In addition, customers will often revoke a transaction (chargeback) claiming it was unauthorized.

Electronic Check Processing for Lenders

Lenders and collection agencies have long used echecks to collect loan repayments.  And with increased restrictions on using cards to repay loans, electronic check processing is more popular than ever.  

Echecks are particularly effective for loan repayments.  Bank accounts rarely change.  Most Americans have payroll direct deposit. And pay monthly bills automatically from a bank account.  As a result, changing an account is a major inconvenience,

As a result, when you set up electronic checks for loan repayments, recurring billing information seldom changes. Payments continue uninterrupted month after month.  

Echecks Now Replacing ACH Processing for Lenders

The biggest concern for lenders is returned and revoked transactions.

Changes in ACH network has forced many lenders to find an alternative.  ACH processing accounts now need to maintain returns under 15% and revokes under 0.5%.  Due to the demographic of the subprime market, these ratios are very hard to maintain.

As a result, most subprime lenders are moving to echecks that use bank-to-bank data exchange to process transactions.  Echeck technology, based on Check 21, is a fast, safe method to accept electronic check payments.

Echecks are an effective alternative for lenders who want to avoid restrictive ACH rules regarding chargebacks and returns.

Electronic checks are not subject to the same rules as ACH transactions.  Check 21 transactions are governed by check laws, and the Uniform Commercial Code, not ACH regulations.  Giving you far greater flexibility for higher returns and chargebacks.  

Electronic check transactions appear on the borrower’s bank statement in the same place as a paper check transactions.  Making it easier for borrowers to remember what was the payment was for and reducing revoked transactions.  


Echecks are the most effective way to assure repayment of subprime loans. Bank accounts rarely change.  Therefore, recurring payment continue uninterrupted.

Subprime lenders get many returns for non-sufficient funds.  And some borrowers try to revoke transactions to avoid repayment of loan.

Subprime lenders and collection agencies discover an echeck account is the best solution for loan repayments. Convenient for borrowers.  Profitable for you.

Interested in finding out how Check 21 electronic check processing can benefit your business? 

Contact info@NationalACH today.