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Are You Looking for a Debt Collector or Collection Agency Merchant Account?

The debt collection agency industry is one that grossed over $40 billion in 2018, domestically, collecting $150 billion in acquired debt, and these numbers just continue to grow with every passing year (approximately 15% each year since). And with the average American household having reportedly $190,000 in debt, it’s clear why the debt collection business is such a profitable one.

If you’re thinking about capitalizing on this industry, you need to seek merchant account services for collection agencies that understands your business. The collection agency industry is considered high risk, and if you need collection agency credit card processing solutions, you need to know how to secure a high risk collection agency merchant account.

Here at Double Helix Processing we pride ourselves on being the go-to processing company for debt collection agency merchant accounts and merchant account services for collection agencies within this industry, including:

  • Debt collection agencies.
  • Debt buyers.
  • Debt purchasers in the healthcare, commercial, and attorney industries.
  • Corporate collection and retail departments.

While this industry is one that shows its worth in the numbers, collection agency credit card processing is considered high risk due to a few factors. A business is considered high risk for a variety of reasons, but the biggest drawbacks for these merchants is in having a difficult time finding a reliable processing partner. Luckily, Double Helix Processing specializes in working with high risk merchants and we have multiple acquiring banking partners that offer debt collection merchant accounts.

Have You Recently Lost Your Merchant Services for your Collection Agency?

Collection agency payment processing doesn’t have to be an impossible task. The likelihood of obtaining payment processing for collection agency businesses increases substantially if you seek out collection agency merchant services with a company who specializes in providing high risk merchant accounts.

If you’ve applied for collection agency credit card processing to get a collection agency merchant account before, you have likely been told that the person responsible for whether or not you get approved, and with what conditions (e.g. rolling reserve, financing delay, transaction caps, monthly caps, etc.) will be based on the individual underwriter assessing your account. And that is generally true, therefore it is important to understand exactly what this decision maker is searching for.

An underwriter’s job is to protect the debt collection credit card processor from losses, which may take the form of unpaid chargebacks, yearly fees, or regulatory losses from the card manufacturers (Visa, MC, AmEx, Discover) or by a local, state, or national government body as well as losses from FDCPA (Fair Debt Collection Practices Act) violations.

Debt collection merchant services come in many forms, but unless you go with the experts, like those at Double Helix Processing, you’re subject to higher fees or worse yet a declined application.

When underwriters are considering your business, they’re trying to decide how serious the risk of loss is by allowing your collection agency merchant account to process through them.

Specifically, they’re looking to make sure you’re only operating from the countries or regions that you are licensed in, that you are complying with applicable laws, particularly the Fair Debt Collection Practices Act (FDCPA), that you are supplying clear receipts and otherwise being transparent with your customers, and that you have a very clear and understandable business model.

Obviously a high risk payment processor that takes on collection agency merchant accounts is well aware that few businesses have everything figured out perfectly, but the greater your case that your company is well-capitalized, has a good business model and is currently working legally and responsibly, the more probable your debt collection merchant account application is going to be approved.

How Does Being High Risk Affect Collection Agency Credit Card Processing?

Among the many reasons that smaller companies get shut down with their chosen credit card processors is not because they are scammers or operating a poorly run business, it is typically because they don’t know how to properly calculate their chargeback ratio, and they don’t understand what a suitable chargeback ratio is.

So, here’s the answer…

Your company’s chargeback ratio is the total count of chargebacks in a month divided by the total amount of sales transactions in the month. Banks view two major things related to chargebacks, one is the percentage and the other is the total amount of them.

It is important to note that the number is not calculated by the number of chargebacks you might have lost, won, fought or didn’t fight. The relevant number is in exactly how many of your customers called their issuing bank and initiated a chargeback. That’s it. You can’t “win” enough chargebacks to decrease the ratio, because the number of wins doesn’t go into the calculation.

Therefore, if your debt collections merchant account has 100 sales transactions in a month and five customers in that exact same month call their issuing bank to initiate a chargeback, you have a 5% chargeback ratio for that month regardless of whether those clients were right, wrong, or otherwise.

Common Issues with Debt Collection Accounts are Listed Below:

Collection agency merchant accounts are considered high risk due to the following reasons.

  • Reputational risk.
  • Dissatisfaction with services delivered.
  • Recurring or continuity billing model.

So, where can you turn when your chargeback ratio is too high and traditional banks won’t approve your debt collection account? Who can you trust to get your business set up with the payment processing you need? Who can you count on to get a merchant account for collection agencies?

The answer is very clear, you come to Double Helix Processing, where we make the application process for your collection agency account as seamless as possible, we can get you approved and set up to accept credit card payment.

Why Does this Matter and How Can Double Helix Processing Help Me Get Merchant Account Solutions for Collection Agencies?

At Double Helix Processing, we provide comprehensive high risk collection agency credit card processing solutions ranging from startups to businesses that process millions of dollars a month, and those that range from debt buyers buying charged-off debt to agencies collecting on behalf of the card brands, department stores and Fortune 500 companies.

If you owned a brick and mortar retail organization, nearly every bank and credit card processor would be more than happy to offer you collection agency credit card processing. Unfortunately, for the debt collection industry, especially those applying for a debt collection agency merchant account, that is not the case.

It’s not that these payment aggregates (like PayPal, Square and Stripe) and traditional banks don’t want your business, but rather because their sponsor bank or their credit card processor will not write collection agency merchant accounts due to the regulatory and chargeback risk.

You don’t have to go through the run around of applying with several banks only to get declined, Double Helix Processing makes getting approved for a debt collection agency merchant account simple. Just fill out our simple, online Merchant Account Application to get started.

Why Should You Choose Double Helix Processing?

We understand the unique needs of the different Debt Collection or Collections Agency related business types and have established numerous acquiring banking relationships to become your best resource in getting Debt Collection or Collections Agency merchant accounts set up and accepting online payments. Our expertise is your ticket to getting the stable processing you need to further your business.