How Does A Debt Collection Agency Accept Payments?
Debt collection agencies are tasked with the job of collecting debts for customers’ unpaid invoices. In a world where there are so many payment processing options available, though, many businesses wonder how debt collection agencies actually accept payments and what they can and can’t do to obtain money.
Here’s what you need to know:
10 Ways Debt Collection Agencies Accept Payments
A debt collection agency uses various methods to recover outstanding debts on behalf of the companies that hire them.
While the exact payment methods a debt collection agency offers will vary based on the agency’s tech stack, policies, and client agreements, these are some of the most common avenues debt collection agencies use to collect payments:
1. Online Payment Portals
To streamline the payment process, many debt collection agencies offer secure online payment portals through their websites.
Debtors who want to pay their balances can log in to these portals using account information and initiate payments via credit/debit cards or electronic fund transfers.
2. Phone Payments
Some debt collection agencies offer phone payments.
Using a phone payment system, debtors can call the debt collection agency’s customer service department and provide their debit/credit card number over the phone.
The agency's representatives will then process credit/debit card payments and provide an electronic receipt for the payment.
3. Mail-In Payments
In some cases, debtors prefer to send their payments in the mail. Agencies that support this usually provide written instructions for sending checks, money orders, or cashier’s checks to a payment address.
Sometimes, debt collection agencies will also offer a blank credit card processing form, which the debtor can use to provide their credit card information for a mail-in payment.
4. Bank Transfers
Debtors that want a fast, secure payment method may choose to initiate bank transfers directly to the debt collection agency's bank account.
Agencies that support bank transfer payment options will provide the necessary bank account details for the transfer and possibly an electronic receipt for the payment.
5. Third-Party Payment Processors
In some cases, debt collection agencies may decide to use third-party payment processors to ensure that their online payments are secure and easy for debtors to complete.
When a third-party payment processor is implemented, that platform handles the transaction and ensures the security of the debtor’s private financial information.
This is the easiest and most secure way for debtors, debt collection merchants, and the companies that hire them to handle payments and ensure security and privacy at every step of the transaction.
6. Payment Apps
Some debt collection agencies accept debtor payments through payment apps, including but not limited to Venmo and PayPal.
The benefit of using these apps is that they’re convenient for debtors and may make it easier and more likely for debtors to pay their back debts.
7. Automated Phone Systems
One of the most common methods debt collection agencies use to collect payments is automated phone systems.
These automated phone systems are popular because they’re inexpensive for debt collection agencies to run and because they’re easy for debtors to use.
The automated phone system guides the debtor through the payment process, prompting them to enter their financial information using their phones’ keypads.
8. In-Person Payments
In rare cases, debtors may be required to visit a collection agency’s office or another satellite location to make their payments in person. Generally, acceptable in-person payment forms include cash, check, and credit or debit card payments.
9. Payment Plans
When debts are large or beyond the scope of a debtor’s ability to pay, a debt collection agency may work with a debtor to establish payment plans.
Payment plans allow debtors to make smaller, more manageable payments over an agreed-upon period of time. These payment plans may include additional fees, such as interest or installment fees.
10. Negotiated Settlements
In situations where a debtor cannot pay their full debt, the debt collection agency may agree to settle the debt for less than the total amount owed, as long as the debtor agrees to make a lump sum payment or agree to a payment plan to pay the full amount defined in the settlement agreement.
Debt Collection Made Simple With Seamless Chex
If you’re looking for a simple, safe, and streamlined way to process debt collection payments, look no further than Seamless Chex.
We make it easy for debt consolidators to access streamlined, affordable, scalable debt collection payment processing technology that maintains compliance with laws like the Fair Debt Collection Practices Act (FDCPA).
No matter what your needs may be, our debt collection merchant platform makes it easy to stay compliant and offer accessible payment options for the debtors you work with.
Ready to learn more? Contact our team today.