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Debt collection merchant accounts can be difficult to obtain. Instabill, however, has the domestic and international acquiring banks in place to get debt collection merchants approved.
Why debt collection merchant accounts are difficult to get?
Over the last five years, acquiring banks, particularly domestic, have grown leery when considering debt collection merchants for payment processing solutions. There are two major reasons for this:
- Debt collection agencies were purchasing old debt without verifying its validity, marking it up with huge fees and interest, and contacting the debtors to pay up.
- The tactics of many debt collectors was called into question, with debtors citing increased threats and harassment from certain agencies to urge them to make good on the debt.
Due to the volume of complaints by consumers in recent years, the Consumer Finance Protection Bureau took note and has since proposed a number of reforms which will make debt collection agencies reevaluate and adjust their models.
What does it take to get a debt collection merchant account?
While fewer banks are giving approvals for debt collection merchant accounts, they are not impossible. In speaking regularly with a number of our domestic and offshore acquiring banking partners, they prefer to see several specific traits from merchants.
- When applying for a debt collection merchant account, banks frown upon debt that is purchased from another entity (after it has failed to recover it). See the bullet points above.
- Instabill’s solution involves an offshore, aggregate merchant account with a shared billing descriptor.
- Preferred six months of favorable payment processing history.
- Debt collection businesses preferred revenue limit is $100,000 per month.
Contact us – We likely have a solution
While the above criteria for debt collection merchant accounts is stringent, Instabill merchant account managers are always open to having a conversation about your collections business. With a 10-minute conversation, we are usually able to identify one of our banking partners that could provide your solution.
Instabill merchant account managers are available direct at 1-800-530-2444, Monday through Friday, from 8 a.m. until 6 p.m., U.S. eastern time.