- A customer provides their payment details, whether it’s online or in-store.
- The credit card information is captured, encrypted, and routed to the authorization network.
- Once forwarded, the authorization network will request approval from the issuing bank.
- If the customer’s account looks legitimate and has enough funds for the payment, the bank approves the transaction, and confirmation is sent to the payment processor
- If the customer’s account lacks funds, or if the transaction looks suspicious, the issuing bank rejects the transaction and returns a decline.
The process is simple and straightforward, but in order to be a successful credit card processor, you need to make it happen safely and securely, and anticipate all possible setbacks. Furthermore, not anyone can sell credit card processing services — you need to become a registered Independent Sales Organization (ISO) first.
Getting Started: How to Sell Credit Card Processing and Merchant Services
Individuals interested in selling merchant services will want to become an Independent Sales Organization, otherwise known as an ISO. An ISO is basically a third-party payment processing company authorized to handle the daily activities of merchant accounts for businesses. Setting up merchant accounts, providing payment technology, and payment processing are among your chief tasks.
As an ISO, you will have more control over credit card processing prices, rates, and residual payment options. Only registered ISOs can have ISO agents who will take care of credit card processing sales, to ensure security, legitimacy, and adherence to strict industry standards.
- Choose between Franchise and Independent
Before anything else, you need to decide whether you should open a franchise, or start an independent company. A franchise has an established brand and business model. Business relationships with banks, equipment distributors, and credit card providers have already been developed. In other words, franchises are essentially ready-to-operate businesses, and are often easier to build. However, you need to pay franchise and revenue fees, which are deducted from your profits.
On the other hand, an independent business means keeping the profits to yourself, but you will need to start from scratch and do all the work in acquiring prospects and clients, and developing good relationships with credit card providers, banks, and distributors.
- Register Your Business
Once you’ve decided how you want to start, you need to register your merchant services business with the secretary of state first. You will then be assigned a federal tax identification number with the IRS. Requirements include:
- Business Plan
- Certificate of Incorporation
- Business License
- Non-Disclosure Agreement (NDA)
- Operating Agreement
- Contract Document
Since ISOs deal with sensitive and private financial data, you must pass all credit screenings and background checks before you can obtain a merchant services provider contract. You’ll also need commercial insurance, such as:
- General liability insurance
- Errors and omissions insurance
- Worker’s compensation insurance
- Business owner policy group insurance
- Equipment Insurance
Once you’ve obtained your merchants services contract, you can now proceed with registering your credit card processing services with credit card issuers, such as MasterCard and Visa. As an applicant, expect to have your personal and business history thoroughly examined. Your financials will also be under investigation, along with your business and personal assets, credit, and civil and criminal history.
The process may take up to 6 months, with an initial registration fee of about $10,000 for the first year, and $5,000 for the following. Once approved, you need to adhere to all ISO rules and regulations.
- Buy Equipment
To securely and efficiently process payment, you need to purchase the necessary equipment. Do your research in finding the best hardware and software, and ask your bank if they require specific types of machines. Among the tools you need are:
- Credit card processing software
- Wireless terminal
- Pin Pad
- Anti-virus software
Obtain wholesale equipment sources. If you’re cash-strapped, contacting an equipment leasing company can help you finance your business.
It’s also important to educate yourself on the latest developments in payment technology, so your business can innovate with the changing times. Make sure to get on board the Cardholder Information Security Program as well, which can help your business gain more credibility.
- Hire a Sales and Marketing Team
To grow your payment processing business, you’ll need ISO sales agents who will be responsible in selling your services so you can get good prospects and long-term clients. Make sure that you have a sales and marketing strategy prepared, and that you can provide excellent customer service to retain your clients and acquire referrals.
Becoming an ISO Agent
If you’re otherwise interested in becoming an ISO sales representative, getting started is easy:
- Sign an ISO agent agreement
- Provide information on how you wish to receive compensation
- Agree to the terms and conditions set forth by the ISO
Once you’ve signed all the paperwork, the real challenge of selling credit card processing begins. You will need to know all the ins and outs of credit card processing and become an expert to stay ahead of the competition. Product knowledge is also vital, so you can truly show your prospects and clients the actual difference of using your services rather than other, similar options.
As a sales agent for credit card processing, following the terms in your contract and being honest and transparent can get you a long way, especially in an industry where safety, security, and credibility are all crucial for survival. In fact, the Federal Deposit Insurance Corporation monitors ISOs and agents to ensure that the finances of member banks are well-protected. The Federal Trade Commission is also tracking payment processors and their agents to detect fraud, a serious crime that will not only destroy a company’s reputation but also warrant jail or prison time.
Credit Card Processing Jobs from Home
Merchant sales are often a part-time gig you can do at home. If you have the character and skills to do the job, you can look for the best merchant services company to work for and apply.
At Allied Payments, we offer a wide array of merchant services, including payment processing, high-risk merchant accounts, payment gateway, and eCheck processing for businesses that need smart, effective, and secure payment solutions. We also offer remote careers. To find out more, contact our team of merchant service professionals.
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