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. How do I become a third-party processor or ISO?
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.
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John Conde