Collection Agency Merchant Account


Many people take out loans and lines of credit to pay for things they need, getting themselves into debt in the process. And those debts need to be repaid. This is where collection agencies come into play. A collection agency, with the help of a collection agency merchant account, is responsible for collecting debts that are owed. This guide will cover all you need to know about collection agency merchant accounts.

There are many situations in life in which people need to pay for something or buy something, but don’t necessarily have the cash to cover the full bill right away. For example, when buying a new car, a new home, paying for a vacation, or paying off medical or legal bills, many people simply find that they don’t have enough money in their accounts to cover the full costs.

Fortunately, there are various financial services and products out there, like loans and credit cards, that can be used to help people pay for the things they need by borrowing money from banks and lenders. Most people try not to borrow more than they can pay back, but in some situations, people can find themselves dealing with debts and not having enough income to cover the repayments.

If banks and lenders aren’t getting repaid, they may turn to the services of a debt collection agency. The agency will then work to get the debt paid off. They can use various means to do this, usually beginning by contacting the borrower and informing them of their debt, building up to more severe actions, such as repossessing cars or property, and even taking legal action against borrowers to get the money that is being demanded.


The High-Risk Collection Agency Industry

Debt is a common aspect of modern society, with many people across the US having some degree of debt, from student debt to medical debt to home loan debt. Statistically speaking, the average American has more than $90,000 of debt, and the most common sources of this debt include home and student loans, as well as credit cards.

The debt collection is, therefore, a very necessary one, as these debts need to be collected and paid off somehow. Without debt collection agencies contacting people and taking action to get debts paid, many debts would simply go unpaid and ignored for years and years, doing a lot of damage to banks, lenders, and other businesses in the process.

Debt collection agencies may make use of various methods when chasing up debts and getting in contact with people who owe money. They may begin with a simple letter to the borrower, informing them of the debt they owe, but if no payments are made, further actions can be taken, like repossession of vehicles and legal actions, too.

What Is a Collection Agency Merchant Account?

If you want to run a collection agency, you’ll need to have your own collection agency merchant account. Every successful agency has one of these accounts. But you might be wondering what exactly is a collection agency merchant account? How do collection agency merchant accounts work? And why are they so crucial for collection agencies to have? 

Well, in order to understand what a collection agency merchant account is, it’s important to have a basic understanding of merchant accounts in general. These accounts are used by businesses of all kinds all over the globe, and their primary purpose is to make it possible for businesses to receive digital payments.

A lot of payments are happening digitally or electronically nowadays, with many people paying by card online or over the phone. But you can’t just accept these kinds of payments directly into your regular account. You need a merchant account to facilitate the process, and that’s where collection agency merchant accounts come into play.

With these accounts, your collection agency will be able to get paid online. So, if a business you’re working with wants to make a payment, or if a borrower that you’ve contacted is ready to pay some of their debt, they’ll be able to pay you easily and conveniently with their card in a matter of minutes, without any unnecessary hassle or delay.

Difficulties Obtaining Collection Agency Merchant Accounts

A collection agency merchant account is clearly a very important part of the collection agency industry, and it’s almost impossible to run a collection agency without one of these accounts. However, if you contact your local bank and request a collection agency merchant account, you may find that they simply say no, right away.

Why? Well, the big issue here is that debt collection is seen as a “high risk” industry. And many banks and financial institutions do not want to work with high-risk businesses, as they don’t want to worry about those risks affecting their own financial situations. In other words, banks prefer to offer accounts and services to low-risk businesses that won’t put them in any jeopardy.


So what makes the debt collection world so risky? Well, one of the main problems is that, by its very nature, debt collection involves working with people who are in poor financial situations and may not be able to pay bills on time or in full. This means that debt collection agencies can never be sure how and when they’re going to get paid, and this can make them quite unreliable and hard-to-run businesses in general.

There’s also an issue of chargebacks. Sometimes, people make card payments to pay off debts or have money taken from their accounts automatically and then dispute those payments, initiating a chargeback to try and get their cash back. This causes more hassle and inconvenience for banks, and there can be lots of chargebacks to deal with when you’re negotiating with people who are in debt.

Applying For A Collection Agency Merchant Account

It’s clear to see that debt collection agencies have to deal with a lot of high-risk payment processing and difficult working conditions. This can make it very hard to get the collection agency merchant accounts these businesses need to operate effectively. So what can you do if you need a collection agency merchant account but all the banks are saying no?

Well, that’s where Shark Processing comes into play. At Shark Processing, we’re experts in high-risk credit card processing and high-risk merchant accounts, working closely with a network of trusted, reputable banks and merchant service providers who are willing to offer the services and accounts you need. 

We’re here to help you get a collection agency merchant account, with the very best rates and terms to suit your business needs. If you’d like to learn more, get in touch with the Shark Processing team today. Our friendly, professional agents will be happy to hear about your business and tell you all about what we can do for you.


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