Can you make money selling credit card processing? Are you interested in starting an online credit card processing company? do you need a sample credit card processing business plan?
A credit card processing company helps businesses process payments made by their customers. To start a credit card processing business, you will need to provide your customers with the necessary devices to process the payments. You will also provide a means by which those payments can be sent to the customer’s bank for approval and then credited to their customer account.
Credit card processing is a unique business that can be performed by individuals who are just starting out in business and by business professionals. The industry has grown considerably in recent years and is considered a multi-billion dollar industry.
The economic recession contributed greatly to the boom in the credit card processing business because many people turned to credit cards as a means of paying for goods and services instead of cash. Some examples of online credit card processing companies that started small and are now giants are:
Setting up a credit card processing business is not difficult. With these few guidelines listed below, you can set up your own credit card processing company:
Starting an online credit card processing business plan
1. register your company
To be recognized as a legal business, you must register your business. It is wiser to incorporate your business, so that any liability is treated as belonging to the business and not as a personal liability. This is especially useful in cases of bankruptcy and liquidation.
2. conduct feasibility studies
Before setting up a credit card processing business, you should conduct a feasibility study of such businesses and understand how they operate and the type of services they provide to their customers.
You should also visit companies that manufacture credit card machines and learn more about how they work. This stage is very important as it will help you to understand your duty as an intermediary between your customer, the credit card companies and the purchasers.
3. determine the niche you wish to operate
You may decide to provide services to retailers or online businesses. If you are going to provide services to online businesses, you will have to do so through a payment gateway, but if you choose to provide your services to retailers, that would be done through merchant accounts.
Commercial accounts are bank accounts that would be used to receive payments on behalf of your customers, while payment gateways are a kind of application that would be used to receive payments for online transactions.
4. understanding the business process
It is very important that you understand how the business works. When a customer pays with their debit/credit card, the card is swiped and the transaction details are sent to the credit card processor through a confidential channel.
The transaction details are sent to the bank via the credit card processor for approval. To be successful in this business, it is important that you know about the installation of the credit card machine, all the software used for these transactions and the functions of a credit card machine.
5. talk to banks for support
The next thing you should do is approach the banks where you want to set up your business and inform them of your intention to start a credit card processing company. Find out from them if they have “reseller programmes”. ” Reseller programmes are like an affiliate thing through which you handle credit card processing services on behalf of the bank.
You would need the banks to start a credit card processing business, so you should look for ways to get the banks to do business with you. you should inform them that you want to become an authorised agent and handle your credit card processing under your own business name.
When you have approached many banks and obtained their approval, select the banks you would prefer to do business with, as you may get several offers.
6. approach a terminal processing machine company with a proven and secure track record for your business location
It is important to find out which terminal processing companies are approved by the banks you have chosen to work with. When you have settled for one, ask them to produce the devices you sell to your customers or lease them with the help of a leasing company.
7. present your business plan
You may need to present your business plan to the bank to show them how you intend to operate, your future plans/visions for your business, how you intend to beat your competitors and how you will manage the inherent risks.
One of the most common risks in the credit card processing business is its susceptibility to fraud. you must be able to show the banks you wish to work with, as well as your customers, that you are fully prepared to prevent and deal with fraud.
8. determine your prices
Of course, your services are not free of charge. you would charge your customers a certain amount for your services that must be carefully determined. your prices will depend on the services you provide to each customer. you can choose to charge a flat rate per machine or charge a certain percentage on each successful transaction.
9. hire support staff
To promote your business, you should consider hiring salespeople to whom you will pay a certain commission based on the number of customers they can get for you. You will also need technical staff to help maintain and repair the machines when they are defective.
Challenges facing credit card processing companies
Before you start your credit card processing business, it is pertinent that you know some of the challenges faced by credit card processing companies, which include fraud and identity theft.
You should enter the business armed with the information and techniques necessary to avoid such problems and address them whenever they occur. It is also important to obtain liability insurance for your business in case of any legal claims.