How do you become a third-party processor?

[sali18]

I'm interested in an article or resource that explains the difference between merchant accounts, third-party processors, ISOs, and how to become any of the above. [b]How do I become a third-party processor or ISO?[/b]
Thanks much!

[stymiee]

To become an ISO you need to find a sponsoring bank. They will then do a background check on you and verify you are eligible to be an ISO (it gets fairly complicated). Then you will need to pay $10,000 in the first year to be registered as an ISO with Visa/MasterCard.

To be a third party processor is much more difficult. You need to find a bank that will actually allow that and you can be sure that a very large sum of money will need to be paid in order for them to protect themselves from the risk that kind of business brings. Then you have to build a massive infrastructure for handling payments. The costs for that would be in the six figures I am sure.

Being a third party processor is almost impossible. But being an ISO is definitely doable. Just be sure you're 100% sure you want to do it as the initial start up fee and the recurring annual costs are not cheap.

[nelsonkist]

Hardware is the least of your concerns.Becoming part of the credit card processing industry requires major league contacts, insurance binders that have the zeros falling off the edge of the page.