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Bill Collection Merchant Account

Bill collection merchant accounts allow businesses to collect money for bills, usually bills that are past due. This is an important service since it cuts down on consumers that have defaulted or discontinued to pay bills that they have originally agreed to pay for. Many payment processors will not touch bill collection services because these businesses are considered high risk and more prone to fraud and chargebacks. High risk payment processors will setup bill collection merchant accounts also known as debt collection merchant accounts. These merchant accounts are setup with the intention of processing payments for overdue bills. High risk merchant account providers will charge extra and add additional clauses into the processing agreement to make sure they are protected in any case that the account is closed or the merchant is unable to handle chargebacks. Normal fees for this type of payment processing will be an additional 3-5 percent which will cover the processor for the extra risk that is being accepted. A 10% rolling reserve will normally be accessed to the account as well. A 10% 6 month rolling reserve means that 10% of what is processed in the account will be held for 6 months and then paid out to the merchant. For example; 10% of the merchant’s sales from month 1 will be held and paid out to the merchant during month 7. 10% of the merchant’s sales from month 2 will be held and paid out to the merchant during month 8. This is rolling so it continues in this fashion for the life of the account. The rest of the processed volume minus any fees will be paid to the merchant in the normal payout schedule.

Bill collection merchants will need to provide a number of documents in order to be approved for a merchant account. It is important that these merchants compile all of their documentation before they begin researching a new bill collection payment processor. Most of the documents are standard for all merchant accounts however some of them will be required only because of the higher than normal risk of the account. These documents will include; fully completed merchant account application, photo ID, bank statements for the last 6 months, and processing statements for the last 6 months. They will be requiring a voided preprinted check so processors know where to deposit the proceeds for the account. Secondly, bill collection merchants will be required to provide additional financials including but not limited to tax returns.

Offshore Merchants has been providing bill collection merchant accounts since 2007 and has become a trusted leader in the high risk merchant account field. Merchants are able to apply for a bill collection merchant account and be approved within 7-10 days.

Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.