How Do I Set Up A Credit Card Processing Agency?

By Author: Daljeet Sidhu
Total Articles: 4762
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Credit and debit cards are becoming a popular payment option all over the world - a shift that has led to small, home-based, and big businesses alike get in touch with credit card processing services. Such a service is the bridge between the retail merchant and the credit card company - Visa, MasterCard, American Express, Discover, etc to get the payment processed.

Running a payment processing service is competitive but very profitable. Let's take a look at the basics of how to launch a credit card processing company.

1. Understanding credit card processing

As a credit card processor, you will be providing the framework that makes it possible for:

* a business owner to swipe cards in credit card terminals
* validation of credit card details over a secure SSL network
* software to process transactions; accept or reject cards
* confirmation of approved transactions by the payment gateway to the store and customer
* moving funds from the customer's account and holding them in the merchant account
* releasing funds to the retailer's checking account

For every ...
... transaction, the processor charges a small part of the amount involved. This is the main source of income, though there are also some monthly and yearly fees.

2. Register your company as an LLC or get incorporated

Acquire details from the Chamber of Commerce or the local Small Business Bureau on how to incorporate or you can get registered as an LLC. This protects you from personal liabilities.

3. Explore reseller options with banks

Banks extend reseller products that allow a company to resell the bank's processing service with its own trademark in exchange for a fee. You thus act as an "authorized agent" for the bank.

4. Provide the banks with a good business plan

Banks are an inevitable part of processing credit cards. Approach different banks with a well worked out business strategy and a list of prospective clients. Be sure to inform them that you will not accept clients with high risk businesses such as adult or gaming portals, and similar categories that are susceptible to a high volumes of credit card fraud.

5. Stock up on credit card processing equipment

You will need to sell or lease POS terminals - integrated and non-integrated, pin pads, payment receipt printers, etc. to your customers, and also implement internet payment gateways for online businesses and software package to process cards. Find out which terminals will work with your bank's systems.

6. Approach equipment leasing agencies

Leasing hardware is more profitable than selling it. Find leasing services that will underwrite lease terms for terminals in exchange for a commission. Banks may also offer these services.

7. Become Cardholder Information Security Program (CISP) certified

The CISP credential gives you an edge as it tells customers that you have mandatory security measures in place of credit card information - firewall, encrypted data transmission, up-to-date anti-virus solution, and actual protection of servers. You will also have to get certifications to prove your compliance to the standards spelled out by the leading credit card companies - Visa, MasterCard, etc.

8. Keep your eyes open for new businesses

Get in touch with the start ups in your area, and offer them a better bargain than your competition. Propose setting up the merchant account, furnish credit card terminals for free for some time, etc., to make the offer more interesting. Give them a brochure so they can compare and contrast prices and services easily.

9. Store equipment properly

Assign a proper place for storing the equipment that you will be providing as part of your services. Package and deliver the items professionally. Ensure that you always have stock to display to potential customers. You can use a drop shipper's services to maintain inventory.

The outlook for credit card processing services is encouraging considering the pace at which businesses of all types - e-commerce and brick-and-mortar establishments - are getting ready to accept credit card payments. You can beat the competition by launching offers that incorporate incentives, cost savings and great service for customers.
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Daljeet Sidhu. Credit Card Processing advice. Credit Card Processing blog. Credit card processing quote