Can you share insights on how to develop a payment processing company?

[Julian Brockmann]

I came to it through https://en.wikipedia.org/wiki/Gravity_Payments . They have been making decent money over a 17 year time period, which proves that the concept works well.

 

[beshareds]

Have lots and lots of cash. Or be a supergenius developer.

 

[Sandman_]

Be prepared to spend 100-500k on attorneys or you will eventually go to jail.

 

[blogmen]

A lot of concepts have proven to work very well, but it doesn't matter if it's a cleaning company, Amazon or a payment service, it's all about the implementation and your ability to gather people and resources to make it happen.

I'm curious why did you pick a payment processing company?

 

[theeyeinside]

STOP. Your mindset is wrong.

You are trying to figure out technology as your starting point.

STOP. Stop thinking about "gadgets"

You have an idea. Good.

Your first question should be "How can I add value to that business?"

Then your next question is "What is my unique selling proposition for that product?"

You have to make something THEN you have to convince people to buy it.

Concentrate on solutions to problems

Don't be like the scammers down in Delray Beach that create the pitch, then see if anyone buys it, THEN they try to create a product (usually very cheezy)

Don't be like them.

Sincerely,

The Eye

 

[Julian Brockmann]

@theeyeinside : I am trying to figure out how to develop such a company for it to likely stay.
I am not thinking about "gadgets", I also don't have an idea.
Even if I came up with 1000 ideas on how to add value to this business, they will, just like my USP eventually be copied by others if they work.
Making something to then convince people to buy it is a bad idea.
It has been done millions of times and almost all endeavours failed because they did not solve the customers problems.
Now what ARE the customers' problems?
They won't disclose them.
You'd need intel from a payment provider to then come up with solutions.
Amazon uses its data on what people buy to come up with its own products that are always bestsellers.
So the real question here is: how to understand the real(not stated when asked) issues people need to have solved when it comes to payment providers AND how to get your company noticed on the market by mostly those who are going to use it.

 

[sachinsadevra]

I came to it through https://en.wikipedia.org/wiki/Gravity_Payments . They have been making decent money over a 17 year time period, which proves that the concept works well.

the huge companies like amazon and other can make it work because they are stable and have loads of dollars! the new comers in this field may not be able to make their way through. Go to the app store and see for yourself. There are many good payment processing company applications that are total failure!! You will drop the idea eventually. on the contrary, you can work for a good company if you have knowledge and skills of a developer!
Goodluck!

 

[Danezz]

You need a lot of money to start a processing payment business. Just the visa/maestro license or whatever is called is 10k per month

 

[sachinsadevra]

on the top of that,you need to be a millionaire for starting a company today!

the huge companies like amazon and other can make it work because they are stable and have loads of dollars! the new comers in this field may not be able to make their way through. Go to the app store and see for yourself. There are many good payment processing company applications that are total failure!! You will drop the idea eventually. on the contrary, you can work for a good company if you have knowledge and skills of a developer!
Goodluck!

 

[Julian Brockmann]

It's okay you guys, not everyone has successful founding experience, so who made good money here in a similar niche that we can invite to this thread?

 

[sachinsadevra]

It's okay you guys, not everyone has successful founding experience, so who made good money here in a similar niche that we can invite to this thread?

Maybe none here! but still, good luck looking for someone who doesn't exist

 

[Julian Brockmann]

Of course they do exist, the founder of the mentioned company is no ghost.

 

[Machairodont]

I've investigated this question about a payment processing company, because fits well to extend our existing business.

In most countries you need to have a bank status to do this. To get this approval it's quite a nightmare:
- 1M$ cash blocked as security
- 100s of regulation requirements you need to fulfill

Then, even if you get the needed paperwork and approval done, the operational nightmare starts.
You need to have a very big capital to start such an endeavor.

 

[Julian Brockmann]

I've investigated this question about a payment processing company, because fits well to extend our existing business.

In most countries you need to have a bank status to do this. To get this approval it's quite a nightmare:
- 1M$ cash blocked as security
- 100s of regulation requirements you need to fulfill

Then, even if you get the needed paperwork and approval done, the operational nightmare starts.
You need to have a very big capital to start such an endeavor.

Sounds like a country dependent struggle.

 

[TashaJ]

It's okay you guys, not everyone has successful founding experience, so who made good money here in a similar niche that we can invite to this thread?

What you have been told is correct.
Understand what your selling point is before developing anything, what makes customers choose you over others. Then you plan how you can develop that product or service.
Not how do you develop the product first then try to figure out why people would buy it, this way you'll end up wasting loads of time developing loads of different SAASs that you cant sell.

Anyway, all you need is the payment APIs for the big financial services like Mastercard or Visa. Then build a website and integrate those APIs?

 

[tidelow]

In Canada, you can become an ISO which is basically a reseller of Acquirers/fully licensed CC processors.

You make contracts with merchants and can add your rates on top.

There is alot of paperwork, requires hundreds of thousands to be deposited as a retainer and you need a solid business plan with a team that has extensive financial experience to be accepted.

Most new ISOs will identify a niche that is in high demand but under served, they are likely medium to high risk. Which brings on my scrutiny from your Acquirer. It is best to look at the niche you would like to serve and speak with Aquirers, as they all have different policies and you cannot move forward with a business plan before you do.

https://www.canada.ca/en/financial-consumer-agency/services/merchants/glossary.html#8

https://www.elavon.ca/partners/independent-sales-organizations.html

 

[Julian Brockmann]

What you have been told is correct.

That is your view.

The commonality in all answers is a lack of practical experience, the furthest Machairodont seems to have come with gathering information, yet nobody executed on it, who has participated here.

Anyway, all you need is the payment APIs for the big financial services like Mastercard or Visa. Then build a website and integrate those APIs?

At what stage?
Why would all the money be required if you could just use MC or Visa APIs?

 

[TashaJ]

That is your view.

The commonality in all answers is a lack of practical experience, the furthest Machairodont seems to have come with gathering information, yet nobody executed on it, who has participated here.


At what stage?
Why would all the money be required if you could just use MC or Visa APIs?

Of course its my view. There isn't a concrete way of how to make a multimillion business...

Money may be needed depending on regulations where you operate, and buy the financial services to use the API/
https://developer.mastercard.com/apis

 

[AlexanderTheGreat]

I had a similar idea for a fintech startup in a developing country.

It's really a lot of bureaucracy, getting the banking licence, lawyers, contacts in the political field, etc.

In a nutshell, it's not as easy as you imagine at the beginning.

 

[Julian Brockmann]

Everybody gave up prematurely, discouraged by perceived challenges.