Merchant Account for Credit Repair Company
The current state of the modern world economy lacks sufficiency in terms of selective pride. Thus, it cannot ignore the existence of credit repair. Merchant account for credit repair company is the backbone of this $4 billion industry. It is an ultimate miracle drug for the sick that need some sort of financial well being. A lot of positive testimonials exist in support of the merchant account for credit repair company. However, despite such glorification’s, it remains an unpopular culture for most banks.
This unfortunate mishap is often a thorn on the foot of many business owners. The credit repair industry thus faces an abnormality in its business operations where there should be normalcy. Hence, we come to the first order of business. That is sorting the ins and outs of the merchant account for credit repair company.
A Walk Through Memory Lane
The mentioned $4 billion worth credit repair industry is a January 2017 statistics. It is a report by the Ibis World market research company. An overview of the survey report reveals 90, 000 plus credit repair businesses exist in their fold. Before the drastic growth to this figure, the year 2016 had a different depiction. Current credit repair businesses were a breakdown of non-employers and small partnerships. Thus, the incidence, moreover, spoke of a truce about the industry’s three-largest firms. The prediction was that each of them would account for less than 5% of the credit repair industry’s revenue. The remaining piece of pie would go to the online merchant account for credit repair company services.
Banks and Merchant Account for Credit Repair Company
Many online credit repair merchants have sufficient credibility in terms of their business operability. They can navigate outside their comfort zone to meet their goals swiftly. However, some banks have adopted a repulsive habit towards them regarding their payment processing requests. Financial institutions, like banks, embrace the aroma of profits. However, the credit repair industry is under the shadow of high charge backs. Thus, to financial institutions like banks, it’s a high risk. Hence the merchant account for credit repair company every time has to toss a coin when considering payment processing.
The growth and popularity of such businesses, however, created a walkover on the payment processing bump. The existence of high-risk merchant account providers initiated a loophole to fix this challenge. Such providers’ services are accessible if a reputable credit repair business takes the initiative to make an application.
It is often through an online platform. The merchant account for credit repair company prioritizes the delivery of quality customer service. This high-risk merchant account is a win for both the online merchants and retailers. There is a waiting period for an application to get approval. It mostly depends on the underlying company in question. Hence, we can speculate it to be between 24 and 48 hours. An approved merchant account for credit repair company will grant you access to charge back management tools. Additionally, you also benefit from fraud filters and payment gateways. Hence no more bumps.
Businesses within Merchant Account for Credit Repair Company
So, what is the role of the credit repair industry, and why should we cherish its existence? The answer is plain and simple. If you value your credit score, then the merchant account for credit repair company should be your friend. The only sure way to know your credit score is through credit reporting. What if the report you receive is inaccurate?
You would not turn a blind eye as you would not want your credit score flagged. The services of a credit repair industry are handy in such situations. It will fix the inaccuracy of data presented by the proposed organizations. The credit repair account will find and dispute the errors on your credit report. The clients that purchase the services of a merchant account for credit repair company are frequent to a typical altercation. It could be a lifestyle change initiated through a divorce or the case of bankruptcy.
Thus, we can assume that the credit report sector lured the existence of the credit repair industry. Therefore, several services exist in favor of the merchant account for credit repair company. The popular ones are as follows:
- Settlement assistance
- Credit repair consultation
- Credit re-establishment
- Dispute processing
- Cease-and-desist collections processing
Such credit repair companies also tend to offer their reach to businesses of all sizes, whether big or small. Even merchants facing rejection from previous credit card processors have other safe havens. It is due to the flexibility of the credit repair industry. Thus, online businesses and retail companies do not have to worry about high chargebacks or bad credit lurking. However, the company’s terms and conditions still need to be in play.
Merchant Account for Credit Repair Company Application Requirements
When considering a retail or online business, the application process is straightforward. The online application platforms for such an account are numerous. Thus, the merchants won’t have a difficult time finding an online platform that reflects their needs. This application process, however, only has two obstacles to surpass. It is the underwriters’ and processors’ demands. Several items or conditions need to pass through their eyes for your application to be valid. They include:
- A government-issued ID. It should be accurate. It can, for example, be a driver’s license.
- A charge back ratio should be under a specified percentage. A typical rate is 2%.
- Employer Identification Number (EIN) or a Social Security Number (SSN).
- A 3-month old bank statement.
- A 3-month old processing statement, if it is a requirement.
- A pre-printed void check or a bank letter.
Moreover, the online merchants seeking the services of a credit repair account need to have an online platform. Hence it needs to adhere to updated security features and be fully operational.
Underwriters and the Merchant Account for Credit Repair Company Application Process
The underwriters and processors oversee the application processes for the merchant accounts. Their concern is mainly on the business model of the credit repair merchants. They need to ensure that the running business is both reputable and legitimate. The underwriters will seek the existence of any red flags by running a risk assessment. Such assessments include compliance with the rules and regulations governing all credit repairs. Sorting out such risks requires several cards to be in play. They include the merchant’s website, credit scores, bank statements, and credit card processing history.
An application can fail to get a positive review due to something as simple as a website’s privacy policy. If privacy and refund policies lack substance, then it becomes a problem. Such a risk is infectious and soon gets the attention of a credit card processor.
The trigger here is the merchant’s negative account balance. Besides, high charge back rates history and late payments or unpaid bills are also contribute to a lousy account review. The underwriter, however, does not have to be the grim ripper of your merchant account application.
There is a simple hack to pass the underwriter’s review. It is quite simple. Firstly, the merchant’s bank account should hold a substantial amount of money. Secondly, the merchant needs to settle any bills and debts that might still be pending. Thirdly, the merchant will need a business stakeholder. This stakeholder must, however, have a remarkable credit history. It is because the stakeholder will be the one to initiate the application process for the merchant account. Therefore, it is prudent to have your affairs in order before presenting it to the underwriter.
Note:
The need to pass the bar of the underwriters should not tempt the merchants towards uncharted territories. There is no need for sailing towards unnecessary risks. The processors and underwriters will be keen on unusual spikes after the approval of the merchant repair account. However, proactive merchants will have a safety net awaiting them. It is because their account approval does not often hold limits. Such limitations might be high processing volumes caps or lower rolling reserve.
Processing Volumes and Merchant Account for Credit Repair Company
Every business has a monthly dream sale objective. If we are to estimate, no business wants to go below the $100,000 sales mark each month. However, this fortune does not favor the boldness of the merchant account for credit repair company. Statistically, a majority of the credit repair businesses are either new or small in size.
This reason alone forces them to be under a credit card processing, volume cap. The cap is applicable on each month. Thus, a merchant cannot exceed a specific figure on the monthly credit card transactions. Attaining this cap means no more credit card purchases hence the closure of a business. The standard cap for most merchants in the credit repair industry is $50, 000.
The sky, however, continues to be the limit. Reason? Successful merchants can get rid of the cap. It only takes a request from a credit repair merchant. Thus, in as few as three months, the cap becomes adjustable. However, the consideration of raising the cap by the processor has its own set of demands. There should be some cash still in the bank and the charge back ratios low. Most importantly, the business should be able to cater to its bills.
Processors and Charge backs under the same Roof
The communication between the processors and charge backs will draw an analytical assumption. A processor will flag a merchant to be having a flawed business model if the charge backs seem excess. The factors that can lead to such charge backs include the absence of a mitigation plan and customer dissatisfaction. The credit card processors will thus not entertain high charge backs due to a simple reason. They tend to attract hefty financial penalties.
Hence credit card companies like Visa or MasterCard will not hesitate to fine processors. That is when the charge back ratio exceeds 2%. Thus, for each merchant, the processors can incur fines amounting to thousands of dollars. Hence excessive charge backs are an unnecessary expense to the credit card processor. It, therefore, leads to the termination of the associated merchant account. Thus a charge back ratio exceeding 3% falls under this category. The processor profiles it as a high-risk merchant account.
A processor will, therefore, resort to shutting down such accounts. It thus makes it challenging for the approval of a second merchant account. A new factor therefore arises, a past terminated account. It is also a factor under consideration when one applies for a merchant account to run a credit repair business.
Merchant Account for Credit Repair Company and Charge backs Susceptibility
The merchant account for credit repair company will always attract vulnerability in the form of charge backs. The logic is simple; customers that seek the services of a credit repair merchant have lousy credit. They thus have little to no financial sources. This low cash flow hence becomes a recipe for dishonesty. Therefore, a customer might initiate a dispute on a credit card transaction that has no-fault.
Another group of clients are those with legitimate transaction complaints but lack the know-how of approaching the issue. Their frustrations get to them when such issues lag towards a viable solution. Their business representatives might also lack the desired customer service skills. An unhappy client thus equals a costly charge back.
A charge back will also suffice when the client lacks the needed paper or electronic receipts. The retailers’ contact information then becomes another hurdle to overcome. Some clients will also forget about their subscription to the merchant account for credit repair company. Thus, when the recurrent bills appear on their statements, its a shocker to them. This scenario then leads to a dispute of the transactions.
The clients will claim that they were no longer in need of credit repair services. Cutting off these services is the clients’ way of hanging on to extra money as the subscription is quite expensive. The smaller credit repair businesses are less likely to give refunds or offer 24-hour customer support services. The case is different for the more established credit repair businesses. Winning or losing the charge back ratio war contributes to the operability of a company. Excessive charge backs equal a crippled merchant account.
Managing Charge back Ratios
The credit repair sector faces minimal fraud or stolen credit card cases. The only prominent dissatisfaction from clients is the issue of charge backs. The processors will thus raise an eyebrow when the charge back ratio strikes a percentage higher than 2%. Offering the clients full refunds will, therefore, in turn, keep the charge backs low. Such credit refunds should come with a receipt. The provision of a new paid service should follow afterward. Hence the first transaction is free from the grip of a charge back potential.
Moreover, the merchant has the leverage to keep on processing credit repairs on a long term basis. The use of explicit billing descriptors will aid the merchants in a way. It is when the clients fail to remember or recognize their credit card statement transactions. The merchant’s contact and name on the descriptor will open a channel or transparency when sorting charge backs.
You can now consider opening a merchant account for credit repair company. Even if you are a client seeking such services, here is the info. It will get you started and on a successful path. The merchant account for credit repair company is a profitable venture for both the clients and the merchants.
Reading Sources
https://paymentcloudinc.com/credit-repair/
https://emerchantbroker.com/credit-repair/