Feds Review Collections Laws

Jul 16, 2015

The Federal Reserve is looking over current collections laws. This is long overdue, according to merchants and consumers. While the vast majority of collections agencies and their employees are good people, the few bad employees that threaten and harass consumers have ruined the industry for many. Even so, the industry is booming, and the reviewing of the laws could not come at a better time.

Collections agency merchants are often looked down upon by processors, banks, and even consumers. The industry is viewed by many are unscrupulous, which is not true. One of the major issues facing collections agency merchants is the lack of options when it comes to a collections agency merchant account. Every collections agency merchant, big or small needs a merchant account. This is how you will accept and process all payments. While some consumers will pay cash, the majority will pay either with their debit or credit card. The problem with a collections agency merchant account comes from the industry itself. The industry is notorious for its few badly behaved employees, and also its higher risk of having a business closure or fraudulent activity.

We all know that every business is at risk of fraudulent activity and hackings, but some businesses have a higher risk, and a more common occurrence. This causes collections agency merchant accounts to be placed into the “high risk” category when it comes to the processing industry. Few legitimate high risk processors exist, and it can be even harder to find one that is experienced in dealing with the type of business you operate. Most claim to specialize in all types of high risk accounts, when in reality few actually do. This can harm your business, because all high risk businesses are different.

You need to make sure that you do your research when searching for a collections agency merchant account. Ask questions before you sign up with a processor. This is your company – your lifeline – and you need to be assertive before you end up in a jam. While Google is a great place to start your search, an even better one of BBB, or Better Business Bureau. There, you can check their rating for collections agency merchant account providers, such as EMB.

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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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