First Card Payments – Collection Agency Merchant Accounts

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Collection Agency Merchant Accounts

First Card Payments has over 20 years of experience as a collection agency merchant processor. We are the EXPERTS.

Unfortunately, debt collection agencies have a bad reputation. Since the 2008 financial crisis and subsequent recession, there have been a number of unsavory debt collectors charging customers high fees using scare tactics and sometimes even crossing the lines of decency by using harmful debt collection methods. This is part of the reason why this business is considered high risk. While not all debt collectors adhere to questionable practices, it can be difficult to get approved for a collection agency merchant account without the help of a reliable payment processing company.

Fast Approvals for Collection Agency Merchant Accounts

The First Card Payments team can get you approved for a debt collection merchant account quickly. Our team has spent years building relationships with banks and ISOs; we use our experience and good standing in the community to ensure that your business is given access to a merchant account. We are more than just a company that offers high-risk merchant accounts, we are on your team!

Why Are Debt Collection

Agencies High-Risk Businesses?


T here are several reasons a business is considered high risk. Not all debt collection companies are appropriately compliant. Lack of compliance as well as bending the rules by certain debt collection companies have caused the industry to be considered high-risk by banks & ISOs. The debt collection industry is also plagued with consumer complaints and a majority of those complaints are not made in good faith. This can lead to a high chargeback rate for your collection agency.

Unfortunately, there just seems to be a lot more concern by the banks when it comes to the number of chargebacks. Since the typical debt collection client already has a history of defaulting, this makes them notorious for calling the issuing bank and initiating a chargeback. Just like almost all industries that are considered high risk by the banks, you should have a great chargeback mitigation program in place in order to keep that rate low. Too many chargebacks can result in higher merchant account fees and even account suspension.

The banks and independent sales organizations (ISO’s) give a little more leeway to high-risk industries such as debt collection compared to more traditional industries.  For instance, traditional industries are allowed up to 1% chargeback ratios without causing concern to the banks or ISOs. The high-risk industries are typically allowed higher chargeback ratios depending on the particular bank or ISO without causing them concern. Good news, though! This is at least 1 advantage to being considered a high-risk industry.

Low Fees for Collection Agency Merchant Accounts with FCP10

First Card Payments offers numerous solutions for the debt collection industry. When you have everything in order, approvals are fast and easy. Having fostered relationships with over 30 banks and ISOs, our terms are the best in the industry.

The fees we are able to get for high-risk collection agency merchant accounts will make it seem like it’s actually low risk, whether you’ve been in business for 20+ years or you are relatively new. After speaking with one of our representatives, you will have a smile on your face.

Why Debt Collectors Partner with First Card Payments

  • No application or setup fees–unlike just about everybody else. We don’t believe in hidden fees or nickel-and-diming our clients
  • Month-to-month contracts available, eliminating early termination or cancellation fees
  • Whether you have been in business many years or you have at least 6 months of processing history, First Card Payments will save you a minimum of 25% of the markup of your current fees most of the time
  • First Card Payments has relationships with the owners, presidents, and CEOs of 30+ banks and ISOs, so our experts have the best chance to help you get approved for a high-risk collection agency merchant account
  • FCP offers solutions regardless of the situation, including high chargeback rates, bad credit, and card not present (CNP) transactions, among countless others
  • Backup merchant accounts for debt collectors as an added layer of protection in case the primary account is terminated for any reason
  • Additional consultation services are available

Our expertise is what sets us apart. Not only will our experts help enable quick approval for your collection agency merchant account, but they also offer chargeback prevention tips and a mitigation program to keep those rates low. First Card Payments allows your debt collection business to grow without being limited by merchant processing caps.

Payment Gateways for Debt Collection Agencies

We have multiple secure payment gateways available strictly for the debt collection space to allow clients to use only the appropriate forms of payment. The advanced technology of these gateways makes them ideal for the debt collection industry.

What Is Debt Collection?

There are so many moving parts involved in running a business, so if one of those parts isn’t cooperating, it can cause issues. If a customer doesn’t pay within the allowed timeframe, a business has to go out of its way to chase them down, so to speak, and collect payment. When a business does not collect an outstanding balance from a client or customer, a debt collection agency steps in to assist with the task so the business can focus in order to keep things operating smoothly. Even though there’s a fee for these services from a debt collection agency and a business may not receive the full payment amount, it’s a huge plus for business owners to at least get part of what’s owed to them, where otherwise they might not have received anything at all.

Debt collection companies will sometimes purchase outstanding debt at a highly discounted price and then collect on it for themselves. Debt collection companies have been helping businesses collect lost revenue since what seems like the beginning of time; it has always been a necessary service.

Debt collection isn’t that simple, however, as issuing brands like Visa and Mastercard have certain guidelines. The types of debt collected by third parties can include, but is not limited to:

  • Credit Card
  • Auto loans
  • Retail store credit and installment sales
  • Medical
  • Returned checks
  • Student loans
  • Utilities
  • Telephone
  • Tickets and Fines

As a business owner in the debt collection industry, you need to have all your ducks in a row in order to be approved for a merchant processing account. Debt collection agency merchant accounts are among the most regulated. These high-risk accounts will always be subject to very thorough risk monitoring evaluations and periodic reviews based on processing activity, chargeback rates, marketing claims, as well as other factors.

Debt collectors must also be compliant with both FDCPA and TCPA regulations, which are frequently altered; it doesn’t make things any easier for businesses in this industry. The great news is that our team at First Card Payments stays on top of all necessary adjustments to keep your merchant account running smoothly. We will always keep you well informed and one step ahead of the game when it comes to having a healthy debt collection merchant account!


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Tips to Get Approved for a Collection Agency Merchant Account

Running a collections agency is not easy. Aside from dealing with the stress that comes with collecting debt, you also need to live with the negative reputation that comes with being in the industry. This is part of the reason why it’s not easy for you to get approved for a collection agency merchant account; most traditional financial institutions would shy away from high-risk merchants like debt collectors.

To increase your chance of success, follow these tips when applying for a high-risk collection agency merchant account:

Find a good merchant account provider.

Although you’re tagged as high risk, you can still find merchant account providers that accept businesses in the debt collection field. To make sure that you won’t be swamped with hefty fees and tied to a bad contract in the long run, you need to find a good merchant account provider that has clear terms and conditions stated in its contract.

You should also look for good ratings from the BBB and, of course, good reviews from other clients.

Prepare all the necessary documents.

At the very least, you will be required to submit bank statements from the most recent three-month period, a voided business check, your EIN number, your company articles of organization or business license, and a valid driver’s license along with your application.

Preparing these documents ahead will not only save you time but will also allow underwriters to review your account quickly to determine if you’re credible enough or not.

If you’re already processing credit card payments, it’s very important to keep your chargeback ratio at less than 1%. The greater number of chargebacks, the lesser your chances of getting approved for a high-risk collection agency merchant account, especially if you don’t process a lot of payments every month.

Know what underwriters will look for when reviewing your account.

Underwriters are professionals who review your application and determine whether or not you should be approved for a high-risk merchant account.

Underwriters research the risks associated with the nature of your business. You need to prove that you are reputable, that you follow rules and regulations, and that you’re a good credit risk.

As a collections agency, underwriters will most likely look at a solid business model, proper state licensure if applicable in your area, a secure website with proper credit card regulations, a good credit score, extensive experience within the ARM industry, and good processing history if available.

If you are going to prove your worth to these professionals, you need to take care of any outstanding issues before submitting your application. It also helps to be honest and upfront about past business struggles; they don’t automatically disqualify you from getting a high risk merchant account. You just need to provide the right explanations and let underwriters decide using their best judgment.


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