Need to know how to become a credit card processing company .....

November 23, 2008 on 7:50 am | In mybachcars.com |
Need to know how to become a credit card processing company .....
  • I need to know what the process is for becoming a credit card processing company. What are the requiremnts? What are the restrivtions? Most importantly I want to know what the financial model looks like in a general sense. For exampla, CardService International charges a vendor (like a gift store that excepts credit cards) $0.30 + 2.9% of the total transaction. In general terms i would like to know how they make mnoney off of that traansaction? What are their major business costs? Do they have to pay Visa and Master Card a cut of that transaction? All their cost dictated by the costs required to process the credit card transactions, Ect... Thanks, please help.


  • Hello - Are you looking to become a processor that can process transactions from physical terminals (for instance, at stores), or are you looking to become an Internet-based processor for websites? Thanks, jbf777 Researcher


  • No, I am looking to become an Internet-based processor for websites. Actually, I have only one website that does a large volume of credit card transactions so I would like to be my own credit card processor and not have to pay CardService or some other credit card processing company the .30 plus 2.9% per transaction they charge. Arte you familiar with what Card Service and other card processing companies do? To be completely honest I am not certain my self, but I know that they are a go between between Visa / Mastercard (ect) and the sard holder. Or perhaps it's ther banks. So I guess to answer your questiuon, yes these would be all internet transactions. But to clarify, I want to be my own card processor and avoid paying that transaction fee. Or better yet, I would like to know if I can creat an environment where I can pocket that ffee so to speak. Does this make sense?


  • Ok, I see what you're after. Give me a little bit and I'll have an answer. jbf777 researcher


  • ANy status on my answer?


  • I have an understanding of how the system works and what you need to do to get established. What I don't have right now is the who-takes-what income breakout. The individuals I need to talk to about that were not in today. I'm hoping I'll have someone to talk to tomorrow.


  • Hello - Thanks for the very interesting question to research. It took quite a few twists and turns! Please note: if you choose to rate this answer, please ask for any necessary clarification/information before doing so. Thanks for your understanding. Companies like Card Services and Nova Information Systems are "middlemen" processing companies that have direct arrangements or partnerships with the credit card companies they process for. They are on the closest tier to the credit card companies in terms of revenue splitting. To become like a Nova or Card Services, it entails working directly with Visa, Mastercard, American Express and Discover companies directly. The credit card companies charge differing rates per transaction, which ordinarily ranges in the 2-3% bracket (but can be lower based on quantity), and differs based on the type of transaction and risk-level. For the case of Discover Card, for example, travel, hospitality, dining, emerging markets, general retail, petroleum, mail/telephone order, and Internet-based transactions are potential examples, each carrying slight differences in fees. The processing companies can decide how they want to mark-up the transaction, but the rep at Discover says, when you see transaction fees resembling the format "2.9% + 30 cents", that 30 cents can often be what the credit card processing company is taking for its processing fee. It can be more, and it can be less, and there may be some more mark-up built into the percentage side as well. The following is contact information as well as more specifics on how the "big 4" credit card companies work: Visa ==== Visa works with what are called "acquiring" or "member" banks. These are banks or financial institutions which are connected directly to the Visa network. A processing company cannot process with Visa directly; they must transact through one of these member banks. You can contact Visa to get a list of participating member banks on their network that you can choose to work through. Contact information: Visa corporate: 650-432-3200 Example of a member bank: Wachovia 704-374-6161 General Corporate 704-383-2039 x Vanessa Hilton (vendor relations) http://www.wachovia.com/inside/page/1,,136_332,00.html Mastercard ========== Mastercard works similarly to Visa, in that they also have a member-bank network, but they also have the added provision for processing companies to transact directly through their network. Contact information: 914-249-5717 x Connie Pollack 914-249-6117 x Christine American Express ================ Processing companies are able to contract directly with American Express. An "external sales agent" (ESA) form must be filled out, which is in turn forwarded to the appropriate department. Contact information: 800-528-5200 Discover ======== Processing companies are able to contract directly with Discover. Merchant Partnerships (work direct) 262-694-3209 x Brian Campbell Search Strategy/Sources: Visa - Anthony (operator #v82) Emily at Discover (Merchant Partnerships)