Debt collection businesses are tasked with collecting on past due bills, and receive fees for doing so. When run well, debt collection businesses can be profitable and stable. However, many merchant services companies do not work with debt collection businesses, for three primary reasons:
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Many debt collection businesses have a moderately high chargeback rate, due to the various disputes and challenges that can occur when collecting debts.
- Debt Collection is somewhat of a “political” issue, and many sponsor banks and their credit card processors have decided that the political costs to their business outweigh the benefits, and therefore refuse to offer merchant services to legitimate and well run debt collection businesses,
- Third, a few “bad apple debt collectors” within this sector have given the industry a bit of a black eye (in the context of merchant services).
Due to these three risks, many merchant services providers decline to accept any debt collection business, no matter their business model.
M&M Merchant, by contrast, has consistently offered solutions for the debt collection industry since our founding. Our extensive relationships with credit card processors and sponsor banks who have the capability to underwrite regulated industries, in addition to our integration of chargeback and fraud prevention software, uniquely positions M&M to offer debt collection businesses with stable, effective, long term credit card processing options.
