Collection Company Merchant Services

Collection agencies are high-risk businesses. Because the main function of this industry involves, there is an increased risk that a customer/client will not pay the money owed. They may not be paying that debt due to processing errors, credit card theft, or simply because they lack the money. When this occurs, there is a strong chance they will also not pay the agency. A merchant credit card processing firm puts their finances online by accepting your account. If you cannot get a client to pay, they may well end up eating some of that cost. For this reason, you will find the rates incurred by these merchant processors are much higher than those many other businesses face. PSbill routinely approves your type of business each and every week. Startups or established companies!

Charge backs are credit card charges that are reversed at the customer’s request. Credit card companies like American Express, Diner’s Club, Discover, MasterCard, and Visa generally side with the company unless proof can be established that the client authorized a charge. Charge backs are expensive, generally resulting in a $20 to $60 penalty that is paid by the merchant. Too many charge backs can cause an online or physical storefront business to jeopardize their merchant credit card processing account. Other issues with businesses like a collection’s agency is that a client can delay payments while battling that the charge was fraudulent, the merchandise was never delivered, or that the product was of poor quality and returned. Unless you can prove the client is lying, odds are high that the client will end up owing nothing.

The Process

Your agency is hired by another company to handle their debt collection. Most companies will spend a few months tracking down late payments by themselves, but after that they hand over delinquent accounts to a collections firm. You receive payment from the company for this service, but then the bulk of your payment comes from successfully getting payment from the client so that you can submit the payment to your client. It is a risky business and one that comes with some of the highest start-up fees out there. It is important to remember that the merchant credit card processing company that you use is often required to put aside a set amount of money into escrow to cover any amount that is not received by the client or that results in a charge back. If the processing company ends up losing their money, they will come after you to make up for it. Therefore, you must really be successful at your job while remaining in the legal boundaries. You are not allowed to threaten those who haven’t paid their bills. Doing so can put your company at risk, exceptional customer service is required to do well in this business.


No Setup Fees

Typically, from other companuies the start-up fees for a high-risk credit card processing account range from $200 to $1,000 if your application is accepted. We do not charge any setup fees. On average, most companies will pay the credit card processing company 2.5 to 5% of every card transaction, face monthly fees of $10-25, and may be required to create an escrow account that requires you to make a payment of 5 to 10% of your monthly profits to cover unpaid bills. Some banks also require you to provide some of your estimated monthly income starting out. For example, if you expect to earn $5,000 per month, you will be required to pay $2,000 into an escrowed account before they agree to extend credit card processing services to your company. We can typically avoid you having to pay many of the fees that other companies charge collection agencies for merchant accounts.


Finally, you must be aware that many high-risk businesses are now required by the merchant processing company to verify all credit card mailing addresses are legit. If your client pays you via a credit card, you will need to call the client and the client’s credit card issuer to verify the billing address given by the client. If you do not take this additional step known as AVS, you can lose your account.

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