In the first quarter of 2015, it is estimated that US consumers paid off $35 billion in card debt. This number seems astronomical, but it shows that the economy is growing. Credit card default are also declining, with numbers showing $350 million less defaults in the first quarter of 2015, as compared to the first quarter of 2014. While these numbers may look like bad business for collection agency merchants, they mean just the opposite. While payoffs are up and defaults are down, US consumers closed out 2014 with $57 billion in new debt, and this new debt will eventually have to be paid off, by payments either to the companies, or through a collections agency.
Collections agencies are a tough business, but they are necessary in an environment that thrives on credit cards. The US economy does so, and has for years. Collection agencies often get a bad rep from those who take their jobs too far, from threatening voicemails to threatening letters. A reputable collections agency merchant does not behave this way, and there is always room in the US market for fair and balanced collections agencies. However, while it can be a great and lucrative business, there is a downside to the industry. Namely, the “high risk” label that the banking and processing industries have placed on the businesses.
This label can cause a great deal of difficulty when it comes to finding a collections agency merchant account. While they are offered, they are not all created the same, and it can take a lot of time and research to find the right collections agency merchant account from your business. Every processor has its own specialty, and many who claim to work with collections agency merchant accounts do so for the profitability. The industry is tough, and while lucrative, it can bring a lot of issues that other companies do not. Namely fraudulent charges and chargebacks. You need to make sure that you have an experienced and reputable collections agency merchant account, like EMB, to help your business succeed.