Are You Prepared To Become A Payment Services Provider?

in Blog
on Tuesday, 31 March 2015 21:25

It may seem at first like becoming a payment facilitator or payment services provider is a monumental task, but it’s absolutely possible and doable if you take the process step by step and get the right assistance along the way. Many companies have made this leap before you, and there’s every reason to believe your company has what it takes as well.

After several years of operation, it’s natural to wonder if you can reduce costs and optimize processing by becoming a PSP. But there are challenges involved in taking this road. These include compliance, relationship, governmental and budgeting issues that have to be addressed.

Here are some issues that must be addressed along with information on the associated costs to help you get an idea of the big picture:

Establishing acquirer relationships. This is perhaps the most important factor to work out, and it’s essential to your success as a payment facilitator. Acquirers can sometimes be slow to come around to your needs, but persistence can get you the connections you need. Establishing each integration can cost up to $15,000 and take a significant amount of time, but approaching the acquirers seriously and correctly can make it easier.

Meeting compliance requirements. To make sure you’re doing everything possible to prevent fraud, you’ll need to establish a Payment Card Industry or PCI-compliant environment for your system or use one provided by another company like firehost or rackspace. A PCI audit costing around $25,000 is required on your server infrastructure as well as your policies and procedures. The monthly cost can be $3,000 a month or more for a hosted PCI complaint server infrastructure, and self-hosting means you and your team must maintain a data center.

Managing tokenization costs. To reduce your PCI scope, you’re required to have a special hardware device for tokenization, and this is an expense to be considered. Credit card tokenization can also be delegated to a third party for a price.

Paying registration fees. Paid annually to MasterCard, Visa and other companies, there’s little action required on your part other than simply paying the fees. But this cost must be considered as you budget for operating your PSP.

Getting gateway software. The gateway software is the core of your payment processing business, and some choices are better deals than others. A license for a robust gateway can cost from $50,000 to $250,000 and is the biggest expense involved in setting up as a payment facilitator. But the right gateway can make daily operations easy.

Obtaining processor certifications. Connecting the gateway to the processors that your acquirers support is also required, and there are additional costs associated with that for which you must budget.

When you’re prepared to deal with these issues, you’re well on your way to being prepared to become a payment facilitator. The process is complex, but so are many aspects of running a successful business. It isn’t difficult for companies that are well-prepared.

At PayVisors, we have experience in helping companies prepare to become PSPs, and we can help you too.

Contact us for more information on how we can simplify the process and eliminate some of the potential challenges so you can become a payment facilitator as quickly and with as few hassles as possible.

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