The Best Collection Agency Merchant Services Providers In 2024

These merchant account providers offer high-risk businesses like collection agencies a square deal when it comes to payment processing.

Chris has been writing about small business topics since 2003. He has been featured in Fox Business, ABC News, Yahoo Finance, GoBankingRates, Newsweek, BizJournals, and other publications. He has a Bachelor’s of Arts in English Writing Arts from SUNY Oswego, and a Masters of Science in Interactive Media from the University of Central Florida. He currently resides in the Hudson Valley region of New York.

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  Chris Motola Chris has been writing about small business topics since 2003. He has been featured in Fox Business, ABC News, Yahoo Finance, GoBankingRates, Newsweek, BizJournals, and other publications. He has a Bachelor’s of Arts in English Writing Arts from SUNY Oswego, and a Masters of Science in Interactive Media from the University of Central Florida. He currently resides in the Hudson Valley region of New York.

  Expert Contributor

  Last updated onUpdated February 1, 2024



Frank has been writing about payment processing and business services since 2015. He is a retired Air Force officer and a former practicing attorney. He has a Bachelor of Science degree in Psychology from The Pennsylvania State University and a Juris Doctorate degree from the Ventura College of Law, and currently resides in Paso Robles, California.

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Frank Kehl Frank has been writing about payment processing and business services since 2015. He is a retired Air Force officer and a former practicing attorney. He has a Bachelor of Science degree in Psychology from The Pennsylvania State University and a Juris Doctorate degree from the Ventura College of Law, and currently resides in Paso Robles, California.

Expert Contributor

As a collection agency, you know how many different kinds of hardware, software, and services you need to accept payments online and over the phone.

Because the debt collection industry is considered high-risk, it can be hard to find reliable merchant account services. The best high-risk merchant account providers offer enhanced support for recurring billing, load balancing, payment security and fraud protection features, and fewer restrictions on international transactions.

Here are our top 4 for collection agency merchant services providers!

Learn More About Our Top Picks

Read more below to learn why we chose these options.

Why Is Credit Card Processing For Collection Agencies Considered High Risk?

Collection agencies need a stable merchant account to let their customers pay off past-due debts with a credit card or e-check. But the majority of merchant-acquiring banks reject applications from debt collectors because of the collections industry’s complicated reputation.

Banks consider collection agencies as high-risk for several reasons, the first of which being the sometimes-negative public perception of the debt collection industry.

The debt collection industry is regulated by federal authorities including the FDCPA and CFPB, and is subject to legal requirements that vary on a state-by-state basis. As is the case with other industries that fall into the high-risk category, collection agencies operate in an unstable regulatory climate and unfortunately experience a higher risk of unreliable streams of income.

When banks determine a business’s risk status, they consider that business’s complete history of chargebacks. Excessive chargebacks are relatively common to the collections industry, so merchant account providers that service high-risk businesses like collection agencies should offer features such as payment gateways with fraud detection tools that minimize the long-term damage done by fraudulent chargebacks.

4 Best Collection Agency Credit Card Processing Providers

Collection agencies require a merchant account provider that supports over-the-phone as well as online payment processing and facilitates timely consumer payments to prevent interruptions to revenue streams.

Here are our favorite merchant account providers for collection agencies:

• PaymentCloud: Best For Agencies With A Strong eCommerce Presence
• Host Merchant Services: Best For New Agencies
• Durango Merchant Services: Best For Agencies With Excessive Chargebacks
• Soar Payments: Best For Agencies That Want Quick Underwriting

How The Best Collection Agency Merchant Services Providers Compare

PaymentCloud: Best For Agencies With A Strong eCommerce Presence

Get Started With PaymentCloud

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Host Merchant Services: Best For New Agencies

Get Started With Host Merchant Services

Read our in-depth review

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Durango Merchant Services: Best For Agencies With Excessive Chargebacks

Get Started With Durango Merchant Services

Read our in-depth review

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Soar Payments: Best For Agencies That Want Quick Underwriting

Get Started With Soar Payments

Read our in-depth review

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Payment Processing Rating Methodology

Merchant Maverick has been researching the payment processing industry since 2009. Our writers have reviewed hundreds of credit card processors, merchant account services, and mobile payment apps, evaluating each provider carefully on several different metrics.

When comparing different payment processing companies and applications to one another, we consider numerous data points. Our experts start by comparing credit card processing rates, the presence of additional fees, contract length, sales practices, and the presence or absence of additional features and services, like point of sale software. Each provider is judged on its own merits and how well it stacks up to industry standards; then it is weighed against the other providers on the list.

We spend an average of 10-15 hours researching and updating each one of our lists, making sure every company or application included meets our internal standards for quality and reputation. Any list of recommended payment processors on our site might contain a mix of standard merchant accounts, third-party payment processors, mobile payment devices, and high-risk payment processors, depending on what our expert feels is the best fit for certain scenarios or business types.

For additional details about Merchant Maverick’s review and rating processes, please refer to any or all of the following methodology pages:

• Credit card processor rating criteria
• High-risk merchant account rating criteria
• Credit card reader & mobile payment device rating criteria

What You Need To Know About Credit Card Processing For Collection Agencies

Ready to integrate payment processing solutions into your new business? You’ll first need to navigate the logistics of processing different customer payment types with different pieces of hardware.

Collection agencies that process mostly credit card payments should keep an eye out for merchant account providers that support virtual terminals. Virtual terminals let business owners access a secure web page to process their customer payments with a built-in dashboard that’s similar to a physical card reader. Although most of these terminals can only process card payments, they also typically include smart features like recurring billing and options to automatically collect funds.

Debt collectors that typically process credit card payments rather than alternative transactions such as ACH payments should nevertheless choose a payment processor that supports options for electric check processing and fraud detection. Credit cards are, relative to ACH/EFT payments, more prone to chargebacks. If you’re interested in securing a virtual terminal that you can integrate with your business’s payment processing solutions, we recommend that you choose an online payment processor with systems to combat card-related consumer chargebacks that minimize interruptions to your revenue stream.

Credit cards are prone to chargebacks and tend to be more expensive to process on a per-transaction basis than automated clearing house (ACH)/electronic fund transfer (EFT) payments. Therefore, if you plan on accepting ACH payments online, you’ll likely need a payment gateway. Payment gateways transmit data between an agency’s point of transaction and the receiving payment processor. Certain payment gateways services support ACH payments and may be included as part of a payment processor’s list of basic services. Payment gateways offer an additional level of protection compared to virtual terminals by encrypting payment information before transmitting it to an acquiring bank. These gateways may also support online portals through which users must enter before they can submit their payments online.

6 Tips For Getting Your Collection Agency Merchant Services Application Approved

Now that you’re familiar with the logistics of payment processing you’re likely to navigate, it’s time to consider some tips to get your collection agency approved by an acquiring bank. Consider the following points to more easily smooth over your application process for a collection agency merchant account:

1. Business Insurance: Every state has its unique requirements that new businesses must adhere to. Agencies in the collections industry are no exception to this fact and should purchase business insurance and a surety bond per the laws set by the state in which they operate. Collection agency owners should also choose from the different types of professional liability insurance to protect their business from lawsuits and claims of negligence that are common to their industry.
2. Business Registration & EIN: On the topic of state-level requirements, your state likely requires you to register your business and obtain an Employer Identification Number (EIN). Remember to factor in your registration costs when you estimate your business’s startup expenses and purchase your first pieces of payment processing hardware.
3. Licensing & Bonds: While certain states only ask that new collection agencies register their business, others may require your business to obtain a collection agency license. Double-check your state’s legal requirements for opening a collection agency and get licensed and bonded as soon as possible if you’re required to do so.
4. Chargeback Ratio: Proof of your business’s chargeback ratio is essential if you want to apply for a collections credit card processing account. Although standards vary, we recommend that you possess a chargeback ratio that’s below one percent, historically. A low chargeback ratio instills confidence in merchant acquiring banks that your business’s revenue stream is not subject to regular interruptions due to an excess of fraudulent chargebacks or chargebacks relating to checks made with insufficient funds.
5. Functional Website & Site Security: Your business’s website needs to be functional and accessible 24/7 if you want to process as many online payments as possible. This fact is particularly true for collection agencies that use a payment gateway and online portal through which their consumers transmit payments. Your site should also adhere to Visa and Mastercard regulations that apply to the debt collections industry.
6. Bank & Processing Statements: Though not always required at the state level, it’s a good idea to provide financial statements or other documents such as processing statements that provide your business’s net worth in writing. Proof of a minimum net worth along with financial and processing statements provides acquiring banks the evidence they may need to recognize your business’s stability.

Which Collection Agency Merchant Services Provider Is Right For My Business?

Business owners starting new collection agencies or even expanding existing ones need merchant account providers that minimize the stresses that come with the debt collection industry, not exacerbate them. The path toward getting your collection agency off the ground is rife with hurdles that take the form of legal obligations, a complicated and sometimes bleak industry reputation, and the constant risk of interruption to your business’s revenue. It only makes sense then that the best collection agency merchant account providers offer processing options for multiple payment types and a reliable system to fight chargebacks and fraud.

Consider whether your agency is a relatively low- or high-volume operation, whether you function as an eCommerce or brick-and-mortar business, your chargeback history, and the pricing plans you prefer before you decide on a collection agency merchant account. Even though some providers may appear to be a good fit for you at first, the best payment processors can satisfy your current business needs and grow with your future growth plans.

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