Payday Loans Win Big in Louisiana

Jan 30, 2015

Payday loan regulation advocates will not be getting their way in the 2015 legislative year in Louisiana. For the last few years, consumer advocates have pushed for constraints on the number of payday loan companies in the state and the amount of interest these organizations charge. Consumer advocates tried, and failed, to point out that payday loans may hurt citizens more than they help – throwing them into long term cycles of debt. This perspective was not shared by the Louisiana state capitol, which decided to enforce protections for payday loan merchants in the state.

Over 300 out of 1000 payday lending organizations that exist in the nation, operate in Louisiana. Payday loan opponents believe that Louisiana is saturated with payday lending because these companies target low-income individuals who will have a difficult time paying back the money they will borrow – and instead wind up paying excessive amounts of money in penalties and interest.

When a customer takes out a payday loan, they usually only borrow a few hundred dollars. However, payday lenders give them only a short period to repay the loan. Usually, consumers must write a check for the cost of the original loan plus fees. This arrangement isn’t really scandalous, in and of itself, but more often than not consumers make multiple loans while being charged between $20 and $55 per transaction. Payday loan rates can reach as high as 700 percent annually.

Capping payday loan rates at 36 percent was one of the goals that consumer advocates wanted to meet. Democratic state Rep. Ted James, sponsored a bill that would cap interest rates at 36 percent last year. The bill also included a provision that limited the number of payday loans a person could take out in a year to only 10. The bill did not pass.

Louisiana is just one of many states whose consumers allow for savvy lender to take advantage of lender-friendly governments that protect your rights to own and operate payday loan companies. In order to increase your profits, your company will need a reliable payment processor to give your customers more channels to pay back loans with a payday loan merchant account.

 

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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 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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