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What is a Merchant Account for Legal Document Prep?
A merchant account for legal document preparation companies is a specialized payment processing solution designed for businesses that assist clients with the preparation of important legal documents such as wills, contracts, and divorce papers. While it functions similarly to a standard merchant account by enabling the business to accept payments, it comes with added considerations. Banks and payment processors often classify legal document preparation services as higher risk due to the potential for chargebacks or disputes that can arise from the nature of the services provided. As a result, obtaining this type of merchant account typically involves a more thorough review process compared to what is required for lower-risk businesses like retail or food service.
Popular Types of Document Preparation Services
Document preparation services have grown in popularity due to the increasing complexity of legal and financial filings. Here are some common services:
- Legal document preparation: Businesses offering help with wills, trusts, contracts, and divorce papers.
- Tax preparation: Companies that assist with individual or business tax filings, including electronic submissions.
- Immigration document assistance: Preparation of forms for visas, green cards, and citizenship applications.
- Financial document filing: Helping businesses or individuals with the preparation of financial reports, loan applications, or bankruptcy filings.
How Is a Legal Document Preparation Merchant Account Different from a Regular Merchant Account?
The key difference is risk. Let’s say you run a small business preparing wills. A client hires you to draft their will, but later they feel the document didn’t meet their expectations, so they ask their credit card company for a refund. This is called a chargeback, and banks don’t like it when there are too many of these. Legal document preparation businesses deal with a lot of this risk—clients might be unhappy with the paperwork or think something’s wrong with the documents.
So, while your typical retail store sells physical products with fewer chargebacks, a legal document preparation merchant account is built to handle more complex transactions and the higher risk of chargebacks and disputes.
Popular Legal Document Prep Services Your Business May Provide
Legal document preparation services are growing, and many people turn to them instead of hiring a lawyer for routine tasks. Here are a few popular ones you’ve probably come across:
- Wills & Trusts: Many folks want to make sure their family is taken care of when they’re gone but don’t want to pay for a full estate attorney.
- Divorce Papers: For couples going through an uncontested divorce, paying for simple document preparation instead of hiring two lawyers can save thousands.
- Business Formation: Starting an LLC or corporation can involve a lot of paperwork, and many turn to document prep companies to get it done fast and affordably.
- Bankruptcy Filings: When people face financial hardships, document preparation services help them file for bankruptcy without needing to hire an expensive lawyer.
These services offer a more affordable way to get legal help, but because of the sensitive nature of the work, banks tend to classify them as “high risk.”
The Legal Document Prep Market Today
The demand for these types of services is booming. More and more people are looking for cost-effective alternatives to traditional legal services, whether it’s forming a business or handling personal matters like estate planning. Companies like LegalZoom have helped make this option mainstream, offering fast and affordable legal solutions without the heavy attorney fees. However, the growth in this market also means increased regulatory scrutiny and a higher chance for disputes.
Why Banks Consider Legal Document Prep High Risk
You might be wondering, “Why is a business that helps people with legal paperwork considered high risk?” Well, here’s why:
- Chargebacks: Customers sometimes dispute charges if they feel their legal documents weren’t done right. Since there’s no physical product to return, they often go straight to their credit card company to ask for their money back.
- Regulation: Legal document preparation companies need to follow specific laws and regulations. If a company doesn’t follow them properly, it could lead to legal trouble, and banks don’t want to be involved in that.
- High Stakes: Legal paperwork is serious business. If something goes wrong, it can lead to significant consequences for the customer, leading to even more disputes or chargebacks.
Because of all these factors, banks tend to be cautious and label legal document preparation businesses as high-risk. That means these businesses often have a harder time getting a merchant account from your typical bank.
How to Get a Merchant Account for a Legal Document Prep Business
If you’re running a legal document prep business, you need a merchant account that understands your business and can handle the risks. Companies like Durango Merchant Services are experts in high-risk industries and can help you get set up with a payment processor that won’t freeze or shut down your account at the first sign of trouble.
To apply, you’ll need to provide things like:
- Your business history and financials
- Estimates on sales and transaction volumes
- Information showing your business complies with any relevant legal requirements
Durango Merchant Services works with banks that are willing to take on higher-risk accounts, making it easier for you to start accepting payments without constant worries about getting your account shut down.
What Features Should a Payment Gateway Have for Legal Document Prep?
When choosing a payment gateway, you’ll want to make sure it has features that fit the needs of your legal document prep business. Here’s what you should look for:
- Risk Management Tools: Since your business is considered high-risk, the payment gateway should offer fraud detection tools and the ability to manage chargebacks.
- Recurring Payments: If you offer subscription services, you’ll need a gateway that can handle recurring billing.
- Flexible Payment Options: It’s good to have multiple ways for clients to pay—credit cards, ACH, and eCheck are all useful options. ACH and eCheck are particularly helpful since they can cut down on credit card fees.
Durango Merchant Services can connect you with solid payment gateways like Durango Pay Gateway, NMI, Fluidpay, or Authorize.net. These gateways offer the features that high-risk businesses like yours need, plus top-notch security.
ACH and eCheck Processing: A Smart Option
For a legal document preparation company, accepting ACH and eCheck payments can be a game-changer. These payment methods are less likely to be disputed and often come with lower fees than credit card processing. If your clients are making large payments—like for preparing a whole suite of estate planning documents—ACH or eCheck can make it easier for them to pay, and you’ll avoid some of the high fees that come with credit cards.
Can You Use Stripe, PayPal, or Square for Legal Document Prep?
Technically, yes—you can use aggregate services like Stripe, PayPal, or Square. But here’s the catch: these platforms don’t specialize in high-risk industries, so there’s a good chance they’ll freeze or shut down your account if they feel your business is too risky. Legal document preparation companies often find themselves in this situation, and having your account frozen means you can’t take payments, which can grind your business to a halt.
That’s why many legal document prep businesses go with Durango Merchant Services, a provider that understands the industry and can offer reliable credit card processing for legal document preparation companies.
What to Do if Your Merchant Account Gets Frozen, Suspended, or Closed
If your account gets frozen or shut down, it’s important to act quickly. First, contact your payment processor to figure out what went wrong—sometimes the issue can be fixed by providing additional information or addressing specific concerns. If the situation can’t be resolved, it’s time to switch to a high-risk payment processor like Durango Merchant Services.
Durango can help you transition smoothly, find a new processor, and get your business back on track.
How Durango Can Help with Legal Document Prep Payment Processing
At Durango Merchant Services, we specialize in credit card processing for legal document preparation companies. Our team understands the challenges that come with running a high-risk business and can help you get set up with a reliable payment processor. With access to top-tier gateways like Durango Pay Gateway, NMI, Fluidpay, and Authorize.net, we’ll make sure your business can accept payments safely and securely. Plus, we offer ACH and eCheck processing, so you have flexible payment options to offer your clients.
Applying for a legal document preparation merchant account with Durango Merchant Services is simple. Just reach out to us, and we’ll guide you through the process. You’ll need to provide some basic information about your business, including your financials, transaction history, and any compliance efforts. From there, we’ll work with our network of high-risk banks to find the right account for you.
If you’re looking for payment processing for legal document preparation companies, Durango Merchant Services has the expertise to help. Reach out today, and we’ll help you secure a merchant account that’s built to support your business.
