Collection Agency Challenges: Opening a Merchant Account

Dec 05, 2013

One of the pivotal aspects of running a small business or enterprise, such as a collection agency, is finding a way to accept credit or debit card payments. In credit and debt-based economic system, the necessity of opening a merchant account to accept these forms of payment can break a new business. If you are an entrepreneur, this complication can lead you to ask yourself how to address the need for a merchant account for your collection agency.

Collection agencies by nature are high-risk businesses. The most profitable areas of collecting debt—delinquent business debts—are also the highest risk. There may be a time gap for collecting the debt that can create the image of instability that repels banks from sight. You need a merchant account because you want to accept payment from your debtors in the most convenient fashion, but you can’t open a merchant account without already displaying profit and stability.

Traditional banks become wooden and unbending regarding merchant accounts if you cannot provide proof of cash reserves, an operation history for your agency, credit history, your debt load, and even a fundamental business plan. To top off the complications, if you can’t provide an upfront reserve of several thousand dollars to protect from chargebacks, you will not likely be permitted to open a merchant account with a bank.

This is where alternative sources of merchant accounts such as can give you a competitive edge. This new option allows a collection agency, new or old, to open beat the system by opening a merchant account by bypassing the traditional banks. This allows you to level the playing field for your business and reduce the danger associated with a high-risk, small business.

Emerchantbroker will offer you rates anytime, anywhere regardless of the bad credit history that can plague high-risk entrepreneurs and collection agencies. Adjustable rates compared to those of the banks will help you accelerate your business plan and prove to be the economical choice for your collection agency.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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