Starting a Credit Card Processing Company

Shaw Merchant Group
4 min readOct 10, 2020
APPLY HERE: ISO Agent Application

The ISO or independent sales organization is the best way to pursue your career in the payment processing business. The ISO builds a relationship with the merchants and solicits them to sign on with your company and rout their payment processing through your credit card processing company. If you want to become a credit card processing agent, keep in mind that this industry is very competitive. You need to do good market research, build a good relationship with merchants, and beat your rival processor to compete. By doing this, you can receive a flat fee for each transaction, the percentage of credit card purchase volume, and more money on the credit card processing machines. Let’s find out together how to start a credit card processing business.

APPLY HERE: ISO Agent Application

Research Your Industry and Market

Market research is the key to stand out if you have decided to become a credit card processor. Once you know what your competitor is doing, how many retail stores near you, and how much other merchant services agents are charging, you can offer the best deal. Moreover, you should also research which services the retail businesses in your area are using and conduct the survey to get more information. You can ask them for their contact information and feedback about the services they are using on a ten-point scale. Moreover, get their email addresses and send them the survey results.

Create a Business Plan

Create a business plan and decide what services you will offer to the merchants and how much you will charge. Also, plan out how you will operate your credit card processing business. First off, write all the details, including the funds to get started, where you will get the funds, how large your team will be, and how you will market your new business idea.

Partner With a Bank

You need the support of the credit card bank for payment processing and operate your inter bank routing. You can contact your local bank and partner with it. You can show your business plan to the bank management in the meeting. Explain your business plan about how your services can help businesses and build relationships with the business community.

Contact Equipment Leasing Companies

For the merchant payment services, you need credit card payment equipment, and that’s where equipment leasing companies come in. You can get more business from the leasing company by offering credit card terminals, ATMs, and other payment processing equipment to small businesses. You can even purchase the credit card processing terminals or lease it for $50 per month. But most of the business owners will lease the terminal. The leasing company will give you a check for the buying price of the equipment minus their fee.

Research Wholesale Equipment Sources

Now research the wholesale equipment sources and make a distributor agreement to the manufacturer of the transaction equipment to make more profit and compete with other processors. There are a lot of reliable transaction equipment manufacturers such as Diebold, VeriFone, and Hypercom.

APPLY HERE: ISO Agent Application

Hire a Sales Team

Next up, hire your sales team that will be responsible for visiting to the merchants and entreat their business. Some people work on salary and commission while some are paid on commission. The independent contractors work on a salary base and get a commission on each sale. The manager supervises all the business activities that his sales team does. Try to offer your sales team enough in compensation. By doing this, they will keep working for you.

Hire a Marketing Team

The marketing team can create a win-win situation for you no matter what the circumstances are. The sales team generates business by visiting the business owners and develops a good relationship while the marketing team helps you promoting your business on the online platforms. Whether your team is building your online presence using digital, TV, or print ads, it will help you get noticed and generate more business.

Consider American Express

American Express is a reliable name when it comes to credit card processing. It may have a higher discount rate on each transaction to the merchants. It has a huge customer base that is likely to spend more than other credit card holders do on each transaction. If you have a plan to work with Visa or MasterCard, consider it too. Get a contract with American Express and ask your clients to take it.

Bottom Line

If you are going to start a credit card processing company and want to take a loan from the bank to start out, present a professional-looking business plan to the bank management. Moreover, if you buy space for your office, you will need more for your startup and need property and liability insurance too.

Make the capital outlay if you want to become an iso for merchant services. You need to pay $10,000 per year to become the registered independent sales organization with Visa/MasterCard and $5,000 per year to continue this registration. You can bring other independent sales organization under your license. On the other hand, if you want to work with a credit card processing company, you have no need to pay the fee.



Shaw Merchant Group

At Shaw Merchant Group we specialize in merchant services agent and ISO development. We are a group of experienced payment processing industry professionals.