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A Great Solution To Help The Students And Small Loan Takers

A merchant account is indispensable when it comes to money management businesses. Some of these businesses are considered high risk by the financial institutions due to the space that they deal in. For example, the merchant accounts dealing in students’loans and loan modifications are considered high risk due to many reasons.

Why are these considered risky


These are online services. Students try to repay the loans in small recurring installments. They may default at times. Similarly, many people are looking for a solution to modify their existing loans at a reasonable rate and try to modify their loans. People do not understand the system and may not pay all the installments of recurring payments on time or ask for chargebacks more frequently than in other arenas. The small businesses providing such facilities that need frequent repayments are declined the merchant account services by big banks and financial institutions. These are considered risky businesses due to recurring bills and many chargebacks.

All these are online accounts and need to be carefully monitored for chargebacks and timely recurring payments. People may recall their payment any time and in times of urgent need of money or any other pressing demand, they cancel the advance payments to the account. Then the company may have to pay back the customers. This is why this is considered a risky business by the big banks and financial institutions.

The efficient platform at lower rates

Fees and Rates are really competitive in the market. You need easy access to virtual terminals that can bear a load of multiple transactions as so many students might be paying at the same time. The gateways should be efficient and can handle many transactions at the same time from multiple terminals. Similarly, the system should be equipped to handle the billing process and also the recurring billings of all the loans that come up for payments regularly. Small loans like these always end up being a strain on the system as there are multiple numbers of transactions that need to be paid and then the repayments accounted for. Ensure that the online systems are well equipped to take care of all such technical matters.

You can be amongst the best in the industry

Almost all businesses these days run online using E-commerce platforms. The systems have to be the latest and very secure. That is why you need the complete package through mobile apps that are compatible with both Android and iPhone systems. This way you can control and use the entire operations from anywhere and manage the payments and receipts.

You can see that there is a huge array of services for companies that are looking for merchant account support for student finance and loan adjustments. These extensive services come to you at highly competitive rates and you need to choose the system that does not charge any application fee and sets up your account in an easy and efficient manner.

Banks may shut down and cancel the merchant account

Surprisingly the business is not inherently risky but the model is not stable. The banks may decline or shut off the merchant account due to many reasons-

  1. The number of Chargebacks may be more than the percentage approved by the bank. In many cases, the well-known credit card processing companies, like PayPal and Stripe may stop providing assistance for loan modification processes when they see more chargebacks

  2. The factor that the merchant may accept payments even when the card is not present physically.

  3. The online payments also do not demand signatures on the payments and some established cards do not trust payments made this way and such a business may be considered risky as chances of recalling the payment may increase.

Even in such extreme cases of closed or denial of credit by major banks you still need the merchant account and a solution is needed.

Are you a Startup?

Many banks deny a merchant account to new ventures as there is no available credit history. But this should not be a hindrance in getting a merchant account even if it is a new company. The well-established businesses and even the new ones without any history should be given a similar service albeit they might be charged a different rate.

The problem with financing a merchant in student loan management is that there are many transactions and you need to take the help by setting up payment gateways of all the well-known cards and financial institutions like Visa and Master Card and many more new ones. The system can manage multiple billings and recurrent billings through the virtual terminals and website.

Better financial management

Due to being considered a risky business many times banks refuse to underwrite the loans and payments or they may suddenly stop paying for the same. Such cases can be resolved with the help of multiple banks for underwriting the amounts- the importance of the continuous supply of money to you and the people who take loans is unquestionable. The drafting of electronic checks and the processing of checks for payment (ACH) are done speedily so that you always have access to money.

You should follow a system that does not have any condition regarding rolling reserves. You must have access to all the money that you can, instead of keeping some money as reserves against future payments. Money is continuously needed to run a business that is working on loan modification and student loan processes. If you have registered the company is offshore countries then also some banks may deny the merchant account. You can see that both domestic and offshore accounts need merchant accounts. Domestic companies will attract fewer fees as these are easy to set up and register. But if you have registered your company in an offshore country, many banks and financial institutions refuse to provide the facility to offshore companies as they do not trust them or consider them as reliable or you may be charged a higher fee. But it is worth the trouble as these merchant accounts may need to be set up to ensure more customers and easy tax structures. Students come from all parts of the world and take online loan modification plans and they can continue to pay from anywhere they are. Therefore offshore accounts may be beneficial even if these are more expensive.

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