How to get around merchant account processing limits and reserves.

So you have decided to open a collection agency.  Congratulations! 

One of the first roadblocks you will encounter is when you apply for your high risk merchant account to process credit cards.  Often, especially in the high risk space that collection agencies fall under your merchant account provider will normally do one or two of these things when you first start taking payments.

  1.  Restrict your processing limits.  This is done to protect the underwriting bank to prevent loss.  They might set an initial limit of $5,000 – $10,000 per month. 
  2.  Make you set up a reserve.  This is usually a large amount of say $20,000 – $40,000 over a period of time to insulate the underwriting bank of loss due to charge-backs or fraud.

So what are your options when faced with one or both of these dilemmas? 

If you decide to open another merchant account for credit cards you could be faced with the same dilemmas as above plus who wants to create an additional reserve if they don’t have to?

Plus your processing rates are usually on the high side for credit cards when it comes to high risk.  So what is the best option?  Short answer: Echecks.

Payments made with Electronic checks (echecks) don’t count against your merchant account processing limits.  And since they are not using the ACH system they don’t fall under NACHA rules…so basically ANY BUSINESS can qualify for them.  PLUS…they are extremely affordable.  MUCH LESS than what you are currently paying processing debit and credit cards.

For example….the Echeck system that Decca Payments uses only costs 1.69% and 35 cents per check with an $8/month gateway fee.  That price includes unlimited echecks.

Larger agencies with $50k per month or more can qualify for even lower rates.

Collection Agencies and any other business that does not qualify for a credit card merchant account can EASILY QUALIFY for echecks!!

Checks are deposited into your account in as little as the next business day (depending on which bank you use).  Currently our Payment Portal has a direct integration with this echeck system (it uploads the check itself) but you can also use it’s own online website for you to input your checks.  Future Collections MAX software updates will include this echeck system integration.

So if you have a debtor on the phone with verified funds in their bank account simply use an echeck instead of their debit card and save yourself from reaching  your processing limits…and save yourself some cash as well!

For an online application for echeck processing with Decca Payments please click here.


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