Collection agencies require a compliant, reputable, well-established payment service provider for Their debt collection merchant accounts. Even high-risk payment service providers have a certain threshold of risk beyond what their underwriters may not be comfortable with for various reasons. Given that as underwriters, they are responsible for determining how risky a particular business is by mainly reading through the application form, they are often more stringent when taking on most types of businesses they consider to be high risk.
The underwriter will also want to make sure that the debt collection agency is based and operated in regions where it is licensed. The underwriting team may check to see if your collection agency is adhering to federal and state laws like the Fair Debt Collection Practices Act. Underwriters will want the collection agency’s services and ensure they stick with the business model.
Generally speaking, underwriters understand the risk associated with doing business with debt collection companies. And most times, your first impression on the underwriters will make or break your case. That’s why you typically need to show significant, if not sufficient, capital as an agency with many of the payment processing companies you may be considering. You will also be required to prove that you’re running a legitimate business.
However, before applying, a debt collection business must find the an ideal payment process for their needs. While there aren’t many high-risk collection agency merchant account providers, to make it even more complicated, most have varying policies. So, to ensure that you get the service your business needs, it is imperative to understand the following factors so you choose best fit for your business.
Find A Reasonably Priced Payment Processor In The Debt Collection Industry
Let’s face it many payment processors that accepts high-risk businesses charge increased fees. However, when it comes to expenses, how much you end up having to pay in terms of fees and other charges like those for chargebacks will vary. Obviously, you will want to find the best financial fit for your needs.
Even though debt collection means following strict rules, most, if not all, high-risk credit card processors will refuse to work with agencies. Interesting given that some providers are even willing to do business with other high-risk businesses like online casinos. This makes finding a reasonably priced payment processing partner much more complicated.
Fortunately, at FLEX Payment Solutions, our underwriters, despite keeping their eyes out for red flags, also understand that we are in the high-risk credit card processing industry. Not only do we provide debt collection agency merchant accounts, but we also offer competitive rates.
It is worth understanding that chargebacks often signal to the payment processor that something isn’t right. It could be anything from poor communication to a lack of clarity and poor customer service. Unfortunately, most collection agencies don’t understand the importance of minimizing chargebacks and that affects debt collection businesses as a whole. That’s why we educate our clients about having an effective chargeback mitigation program in place.
Excellent Customer Service For Collection Agencies
You want to avoid selecting a payment processor that handles your account via primarily through a series of automated emails and a phone customer service team that rarely is available to take your calls.
You should always test a payment processor’s customer service skills by contacting them before adding them to the short list for consideration. Having a payment processor that only uses an automated system often leads to ongoing issues when important matters need to be addressed.
At FLEX Payment Solutions, we often work with merchants or debt collectors offering advice and assistance. For instance, we advise merchants like debt collection agencies about keeping their chargeback rates under 2%. While many assume it is easy to sign-up with a different high-risk payment processor if the first account provider doesn’t work for you, this certainly isn’t the case. Usually, a terminated merchant account is a liability to the processor. That being said, it is important that you are careful in selecting the ideal process the first time around, and that their long-term customer service will consistently meet your expectations.
If you have a large number of chargebacks along with an adverse account history, our team will want partner with you to develop a solution. Through our experience, we will be able to share potential solutions that have been effective for other clients that may be able to help you turn your chargeback challenges around.
Quick To Respond
As a business in the debt collection industry, you understand that there will always be challenges and so you need to offer flexible payment processing solutions. Chargebacks may be the least of your worries. However, having a payment processor that responds to your questions and offers assistance may be of critical importance.
Ideally, you will want to find a payment processor that provides you with a dedicated account manager that helps address issues with credit card payments. Having ongoing access to your account manager provides a high-degree of confidence and reliable assistance when needed.
Make Sure To Fully Evaluate Cheap Debt Collection Merchant Accounts
Like everything else in life, if you opt for a payment processor that’s simply the “cheapest”, you may find that you are compromising important capabilities and services. And, these compromises come at a cost.
While you certainly want to select a reasonably priced payment processor, be sure to fully evaluate fees that seem to good to be true. Ultimately, you must find the best value for the services that your business needs to be successful.
Final Word
Choosing a payment processor can take time and effort. However, with a bit of research, you should be able to find the best option for your unique business needs. Again, always be sure that the debt collection merchant services provider offers the best balance of capabilities, fees and customer service.
If you would like to know more about selecting the ideal payment processor contact FLEX Payment Solutions for a complimentary consultation. We are more than happy to help you identify the factors that you should be considering as you identify the ideal payment processor partnership for your business.
