TR EMERITUS

In the quickly developing commercial environment, the sector of card processors is a niche that is only gaining momentum. According to the 2022 McKinsey Global Payments study, between 2020 and 2021, debit and credit card payments grew by 20% and 18%, respectively. Indeed, starting a business that processes cards might be rewarding, but it can also be difficult. However, it can be profitable if you have the necessary data about debit cards and abilities. This article will outline a step-by-step process for getting a specific license, identify the price of doing so, and examine options accessible on the market.

Reasons to start a card processing firm

In 2020–2021, the sector of card processors made news with many acquisitions. A few examples are Worldline’s $8.6 billion purchase of Ingenico, which resulted in the creation of Europe’s biggest acquirer and payment processor. Or the $5.3 billion purchase of SIA by Nexi, which had the lofty ambition of becoming the largest payment service in the EU. It comes without saying that we must also add Stripe, a business that concluded its most recent round of fundraising in March, valuing it at an astounding $95 billion. The corporation increased nearly thrice in a single year, reaching a $36 billion valuation in 2020!

The worldwide payment market is still growing and drawing new participants despite turning into a more and more competitive platform. From 2021 to 2028, it is projected to expand at a CAGR of 19.4%. If you’re looking to join this growing field, it is your turn!

Ways to enter the card processing market

There are three ways to launch your own business.

1. The first is designing your payment-related software or product. It’s a risky approach that takes a lot of time, money, and resources.
2. The next option is a white-label model, which entails acquiring ready-made software from a provider and making it available to companies under your brand and your terms.
3. The affiliate model is the third option that fits individuals who want to make money without development. You’ll sign a contract with a PSP promising to refer them to new clients in exchange for the agreed-upon sum.

Starting a card processing company

The following are the basic steps you must do to establish a business:

1. Acquisition of the necessary licenses and agreements. You must first obtain PCI DSS certification. It is a multilayered, complicated process. You must adhere to 12 key requirements and more than 250 sub-requirements combined that are listed in the PCI-DSS version 3.2.1 documentation. Researching the laws in your area is essential because you might need specific permits depending on where you reside.
2. Installment of the hardware and software. Technologies are employed by processing businesses to streamline interactions between banks, retailers, and clients. You might also be open to the idea of renting cloud-based infrastructure. Your cloud provider will build and maintain the server, saving you money on server costs.
3. Establishment of partnerships with banks and merchants. You must build strong ties with banking institutions to conduct transactions. Contract negotiations and the creation of procedures for onboarding new clients may be necessary for this.
4. Promotion of your services. Once everything is set up, you can begin reaching out to potential clients to market your services. The procedure could involve developing marketing collateral, going to trade shows, and connecting with possible partners. Additionally, keep in mind that there will be strong competition because this sector is already very popular.

Prices of opening a card processing company

Setting up an entity that processes credit cards can be very expensive, depending on a number of variables. Starting from scratch with a minimum viable product will cost you between $150K and $500K, while this amount could be greater or lower depending on your particular circumstances. It will most likely take somewhere between six months and a year to complete. But there are many options available on the market that you might take into consideration if you want to open a business without waiting for a long time and on a small budget.

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