Bail Bond Merchant Accounts
Many bail bondsmen have transitioned from cash-only to credit card-accepting businesses. Understand the risks of the industry and implement a payment solution that complements your objectives today.
There’s no denying that bail bond merchants are considered high risk by the majority of financial institutions, banks and merchant service providers alike. The nature of the job—posting bail for individuals who can’t come up with the money up front—leads to inconsistent revenue and investments that don’t always pay off. For example, someone might agree to pay a bail bond merchant with a credit card, get released from jail, fail to show up in court and never pay the bond bill. The bail bond merchant is left with an unpaid debt and little chance of collection. Though merchants in this category usually have insurance to avoid taking on full financial responsibility, their insurance rates will increase as these kinds of payouts do.
An overall decline in individuals’ personal savings boosts the chance that bail bond merchants will rack up receivables that go uncollected for long periods of time—or indefinitely. According to statista.com, individuals’ personal savings in 2017, on average, were less than half of what they were in 2015, and remain at an all-time low since 2007. High cost of bail and “friendly fraud”—when a customer wins an unwarranted chargeback from a business after filing a false claim—are also pandemic in the industry.
Over the past five years, bail bond merchants have shifted to accepting credit cards online. The trend has proven to reduce housing costs for jailers as more people are released more quickly, but it also increases unpaid bond debts. That’s why we’ve designed a payment processing system with specific security features to accommodate merchants in this account category:
- Advanced fraud filters for your payment gateway
- Address Verification Services (AVS) to match cardholder address to buyer address to thwart fraudsters
- PCI compliance support
- Chargeback management tools to ensure the validity of transactions before they are authorized
- Ability to accept credit, debit, eCheck, Apple Pay and prepaid cards
- Instant Account Verification (IAV) services to confirm the legitimacy of checks and eChecks before you accept them
- Automated recurring billing that matches financing plans
- Automated invoicing
- Virtual terminals for MO/TO payments
- Integration with third-party applications, such as QuickBooks
- EMV chip terminals for the most secure card-present transaction processing
- Advanced online reporting to identify sales trends and guide smart decision making
Mitigating Risk Factors
Contracts, receipts and other customer-signed documents should include clauses in plain language about business and return policies to protect the bail bond merchant from friendly fraud and excessive chargebacks. Having multiple customer signatures on file will increase the chance of successfully refuting chargeback claims. Confirming customer details with AVS and Card Verification Value (CVV) are also important measures merchants can take to help curb fraud. Our preferred payment gateway, Authorize.net, includes a built-in Advanced Fraud Detection Suite (AFDS) through which merchants can customize payment gateway filters, alerts and thresholds to detect suspicious payment attempts and thoroughly confirm customer legitimacy.
BankCard USA’s merchant account application is straightforward and quick to fill out. Our underwriters are experienced in the screening process to ensure bail bond businesses are abiding by industry laws and regulations and have a good history of paying outstanding bills. While a bail bond merchant following industry best practices would qualify for higher transaction volume caps, lower transaction rates and other account perks, we still partner with those that have struggled in the past and impose safeguards such as rolling reserves and transaction volume caps to protect the partnership, while simultaneously working to help the business improve its performance. Our high-risk experts can set you up with a specialized merchant account, even if you don’t have the best track record.