For the business overwhelmed with accounts receivable, collection agencies are the good guys. They step in and hold the business’ customers financially responsible for the goods/services they have yet to pay for. Even so, some collection agency’s actions tarnish the reputation of others who operate honestly. Thus, collection agencies are typically classified as “high risk” and struggle to secure the merchant accounts they need.
Even the collection agency startup with honest intentions will feel the effects of this industries reputation when they apply for a merchant account. This stress only adds to the overwhelming and intimidating process of collecting debts as a startup. What your new collections agency needs is safe debt collection agency payment processing from a high-risk provider.
Where can you secure a merchant account?
Traditional sources for merchant accounts – banks and credit card companies – shy away from the reputation surrounding this industry. High risk providers, on the other hand, specialize in working with business types and industries categorized as high risk. For example, First American Merchant works with a long list of high risk industries, including: collection agencies, automotive, restaurant, retail, hotel and motel, construction, beauty salons and many others.
In an industry with a high employee turnover (due to job-related stress), any added stability is a huge benefit. The advantage of working with a high-risk provider like FAM is that collection agencies can secure a wide range of merchant services. The collection agency merchant account allows your agency to safely process credit and debit card payments and secure chargeback prevention and protection services.
In addition to the payment processing options, collection agencies can also secure the business funding they need. One of the biggest problems in running a collection agency is dealing with individuals promising to make a payment, but later requesting that their bank or credit card processor cancel the payment. This leads to a lot of constant cash flow to and from the business, making it hard to maintain sufficient capital for expenses and growth. This is where the high-risk provider’s funding options can help; the quick cash solutions offer your collections agency the flexibility it needs to react to changes and take advantage of opportunities.
How difficult is it to secure a merchant account?
The biggest advantage of securing a collection agency merchant account is the speed in which the application process can be completed. The application itself takes only a few minutes to complete, and the merchant account can be setup in as little as 24 hours following approval. Minimal documentation is required. Because approval is not based on credit scores, industry or financials, a collections agency merchant account is quickly becoming one of the most popular alternatives for both the established collections agency and startup.