Debt Collection Merchant Account

Finding a merchant account for your debt management business may prove to be a little tricky.

Why do I hear you ask! – well, this might be for a host of reasons.

Sometimes acquiring banks do not like the repetitional risk of being attached to debt management companies or sometimes they deem it to be too high risk for them to board as a merchant because of chargeback risk. As frustrating as this might be for your debt management business, if you are going to gain that merchant account you will need to speak to an expert that has a history of placing debt management firms with the correct acquirers who WILL approve your application.

Step forward – Modern World Business Solutions.

We are specialists in obtaining merchant accounts for high risk business, just like a debt collection agency. We have links with several acquiring banks that will accept your business on merit and approve your application for a merchant account, We have experience in placing several of the largest UK debt collection firms.

However – just like all merchant accounts, it’s very important to get the correct solution in place for you as a customer.

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Below are 10 things you should know or ask the provider about getting approved for a merchant account for your debt collection agency.

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Make sure you have all of the necessary licensing and accreditation in place to be able to collect debt. Our banks will not board unlicensed collection agencies.

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 Our acquirers might place a rolling reserve on your account to begin with if you do not have any history of taking card payments – a rolling reserve means the acquirer will hold 5/10% of your takings for up to 180 days to negate any potential chargebacks that you may encounter.

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Allow a little longer to get your merchant account approved for your high risk business. Debt collection agencies usually take around 4/6 weeks for us to get fully approved and underwritten, also please expect a lot of communications going back and forth to get you approved.

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Expect slightly higher rates than normal, as your business will be classed as high risk please expect the rates to be a little higher than you would usually see on the high street – rates between 1.5 and 4% are to be expected.

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The KYC and KYB you will need to get your application started are listed below.

  • ID for Directors or shareholders over 25%
  • Proof of business bank
  • Proof of business Address
  • Proof of directors address
  • Licences required to operate
  • 6 months acquiring history you may have, if not 6 months bank statements
  • Terms and conditions
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Always check how the acquirer is looking to allow you to accept payments and what card types you are allowed to transact, some acquirers will not allow you to accept credit cards for debt repayments. Are you looking to accept payments via a virtual terminal or by use of GPRS or WIFI terminals.

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There might be a high risk registration fee of $500 to register your debt collection business with Mastercard for your merchant account, Visa does not charge a fee. Please be aware of this charge.

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Modern World Will apply a set up charge to open your high risk merchant account. This will only be applied at the end once you have agreed terms but please be aware in advance that this fee will apply. The amount will be outlined before you progress.

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If you require a gateway setting up for your merchant account for your debt collection agency it’s very important that we understand the platform that your website was built on to ensure that the integration is in place. Please contact us to find out more about this.

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You might have a settlement delay attributed to your account, it’s usually around a 7 day settlement, this may improve in the future after the acquirer knows how your account is managed but as to start with please expect to have a settlement delay on your account.

There are many other factors and variables that might be thrown into the mix whilst your application for your debt collection merchant account is being opened however we have tried our best to set expectations as per the above points.

If you have a debt collection business and you need help and support around setting your business up with a merchant account to allow you to accept card payments then Modern World Business would love to help you with a solution.

Why not start the ball rolling by submitting your interest by submitting the below form and one of our friendly team will be on hand to help.

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