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How Do I Start my Own Credit Card Business?

Posted on December 2, 2009. Filed under: Uncategorized | Tags: Credit Cards |

Did you know that you can start your very own credit card processing business? The credit card industry has grown even in these difficult economic times. That’s because of debit checking cards with credit capabilities. It means you could set up a credit card processing business of your own.

Start by contacting your local chamber of commerce to find out how to become an LLC or other corporation type and then register as an official business to protect yourself personally. Next, talk to several banks in your local area and tell them you want to start a credit card processing business. Some of them may have reseller program that allows companies like the one you’re proposing to package the bank’s processing services as their own while paying fees to the bank. It is important to know that a bank has to be involved. Tell the bank you want to be an authorized agent for their processing services under your company’s brand name.

You’ll have to give the banks a detailed business plan which includes the type of businesses you want to sell or lease the processing machines to, your financial resources, and any high risk areas you promise to avoid, like “adult” businesses that tend to incur losses due to fraud.

Once you have found a bank you can work with, contact a terminal processing company to find terminals you can buy and stock at your business. Check to see if your sponsoring bank itself offers such services. They might. The number one processor is Verifone, which has a good reputation. But you’ll need to verify with your bank partner which terminals work with their systems. At that point, you can sell the devices outright, or lease them.

Find a leasing agency to find a partner that will give you leasing terms for your processor leases. You’re better off leasing a Verifone instrument for $39.99 a month over 24 months than if you simply sold it for a flat rate up front. Any lease-based company that will underwrite the terminal lease terms for a cut of the profits is a potential partner for your business.

You should keep in mind that this can be a lucrative business, but it is also very competitive. Sometimes there is a sense of suspicion between small businesses who accept credit cards and those selling card processing services. You’ll get plenty of doors shut in your face if you don’t find a marketing angle that they find non-threatening and genuinely helpful.

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