There are two essential reasons credit repair businesses are deemed high risk by
A typically high rate of chargebacks
Merchants exceeding volume caps
Customers turn to to enhance their credit score. Most buyers who look for credit repair services are viewed as high risk clients with bad credit; are likely in financial chaos themselves; and have relatively less money.
Services of Credit repair organizations are costly and referred to for making promises, for example, improving your credit score considerably and rapidly. They do this by searching for mistakes and unjustifiable reasons why a client’s credit score dropped, at that point debating and negotiating with the best possible credit reporting officials to have things expelled from a buyer’s credit report. Most organizations perform several services,such as bringing down obligation with creditors and offering guidance and system on building and maintaining credit.
Be that as it may, this is where credit repair merchants experience inconvenience: On the events when the client pays with a credit card and is disappointed with the outcomes by the dealer – which happens often – the client will file a chargeback. Different purposes behind chargebacks include:
Credit repair isn’t cheap, which, when dealing with high-risk customers, enhances the chances of a chargeback.
Many agencies are small and lack customer support resources, leaving customers impatient.
Moreover, credit repair merchants are always assessed a volume cap which cannot be exceeded. Unfortunately, many merchants do. With solid processing and low chargebacks, however, volume limits are negotiable after 3-6 months.
Why Acquiring Banks Are Turning Down Credit Repair
In recent years, we’ve seen acquiring banks shun credit card processing for high risk businesses, particularly credit repair agencies. They simply do not want to assume the level of risk such businesses have.
Think about it: A credit repair business accepting credit card payments from clients who are trying to repair their own credit. Such a premise borders on the contradictory. Nevertheless, we find the vast majority of credit repair merchants prefer credit card payments for such – not check solutions or cash.
We understand the merchant’s side: accepting credit card payments for credit repair is easy guaranteed payment for the merchant (even if it may be putting the customer further into debt). Cash and check solutions, though more practical (and financially sensible) for the customer, do not guarantee a steady stream of income.
Solutions For Credit Repair Merchants
Credit card processing for high risk businesses, particularly credit repair, has become exceedingly difficult due to the large credit card issuers collective diminishing tolerance for chargebacks.
iPayTotal has credit card processing solutions for many high risk businesses. For credit repair, there is a strict checklist of requirements:
- Our solution is for domestic merchants operating in the U.S. and U.K only
- 3 months of processing history (no startups) with documentation
- 3 months of bank statements
- Chargeback rate below the standard Visa threshold: less than 1 percent of sales or 100 per month
For merchants seeking a credit repair merchant account using check solutions and ACH, iPayTotal can offer stellar solutions and fast approvals. Regardless, we are always up for a discussion with like-minded merchants about payment processing possibilities. Speak one-on-one with a live merchant account manager at +(44) 800 776 5988