7 Important Pieces Of Becoming A Payment Service Provider

in Blog
on Friday, 27 November 2015 11:19

Let’s be realistic: companies trying to become payment service providers face a long list of challenges -- but they’re challenges you may be able to overcome if you understand what you’re facing and take advantage of what’s out there in the marketplace to help you.

One smart decision is to use commercial open source payment gateway software rather than trying to create your own payment gateway from scratch. Why reinvent the wheel when a flexible and robust solution is waiting for you?

Payment service providers take legal responsibility for payment funds when they’ve left the hands of a buyer but aren’t yet in the hands of a seller, so they’re an important piece of completing every seller-present and online sale. They hold a great deal of responsibility to both buyers and sellers and need to function at the highest possible level. Understanding these facts makes it easy to see that a payment facilitator needs strong software and strong relationships to do its job.

Specifically, there are seven pieces that need to be put in place to become a successful payment service provider:

1. Contracts with acquirers. In addition to providing proof of financial liability, financial statements and other documents, you’ll have to wait until the acquiring banks decide to integrate with your new system if you don’t choose an existing gateway, and that can be months or years.

2. Customer relationship management. As a payment facilitator, you’ll have to have a CRM system in place for managing client information, one of the keys for keeping your complicated business in check. You’ll also need procedures for new clients, exiting clients and more.

3. Merchant background verification. This involves checking the merchant’s credit history and doing additional verifications to make sure the merchant will not bring with it an undesirable level of risk for your company and will have an adequate number of transactions for it to be profitable for you.

4. A way to actually process transactions. Done through your gateway of choice, this is the way customer transactions are actually handled. If you choose existing payment gateway software, look for integration with the acquirers that matter most to you.

5. PCI compliance. If you plan to become a payment facilitator, you must arrange for Payment Card Industry standards compliance, and this comes from a rigorous and expensive PCI compliance audit. A secure server is a must.

6. A merchant funding strategy. Handled through your payment gateway in most cases, this is how your merchants get the money that you have collected for them minus fees.

7. Consumer and merchant fraud protection. More than just PCI compliance, this involves a full array of fraud prevention efforts that protect merchants as well as consumers so you that you can maintain security and retain your vital relationships with all parties.

We admit that the process of becoming a payment service provider seems a bit daunting. But it’s possible. And it’s easier when you choose a fully developed open source payment gateway like UniPay from United Thinkers.

A unified platform can handle the whole lifecycle of merchant management and merchant transactions, smoothing the pathway toward success as a payment facilitator.

Contact our team of payment processing professionals right away to find out how to become a payment service provider.

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