Payday Lender Merchant Account
The payday loan industry has been defamed due to deceitful actions of some lenders. But this has become problematic for honest business owners to find the right merchant account solutions.
Merchant accounts are like bank accounts that enable businesses to accept payments through credit cards. Although for most of the businesses merchant account can be simply obtained by going to the bank and applying for it but for businesses which are considered as high-risk, it gets too difficult to find the right merchant account provider.
And banks and many financial institutions are reluctant to provide merchant accounts to businesses that are considered as high risk. Now what makes payday loan industry high-risk? Businesses such as medical marijuana distributors that function in a legal gray area have been entitled as high-risk. Industries in which businesses donâ€™t sustain (have a fewer chance to survive for a long time are considered as high risk. Such industries that are subject to high credit card fraud and chargebacks such as bail bonds and pawn shops have been entitled as high-risk. Therefore, banks avoid offering merchant accounts to any business that can get closed at any point of time or have many customers demanding chargebacks.
Due to unscrupulous lenders, the payday loan industry has been categorized as high risk. One of the reasons for this is that not all companies work as per the legal norms. Some of the payday lender business owners even claimed that the state and federal laws donâ€™t apply to them and were even issued a warning for it. Such companies would charge high interest rates that too illegally which violated the state usury laws. The reason of frauds by such companies is because they are based in some other countries with their customers in the United States and thatâ€™s why they claim that the state and federal laws are not mean for them.
This is not the case with every online payday lender but due to some merchants with unfair practices, it has become difficult for the honest ones to get a merchant account.
Another risk involved with payday loan companies is that some of them do not have solid underwriting criteria. Although it is a payday loan but not every company verifies to ensure that the loan recipient actually has a job. Most of them, donâ€™t do credit checks eve. This can become problematic in future as it not just increases the risk for the company but also increases the risk for the institution providing the merchant account.
So if you are an honest payday lender and facing challenges in getting a merchant account then get in touch with us today. AMSLV specializes in delivering merchant account services to high-risk businesses and have the perfect solutions for your payday loan businesses. Now you donâ€™t have to face repeated rejections and long application process to get a merchant account.
Call us today! 855-267-8472