How to Start Your Payment Processing Business in 2023

Online payments are undoubtedly one of the most dynamic segments of the financial industry. Payment trends, as well as payment technologies, do not stand still, constantly evolving according to the needs of buyers. Due to this, the payment processing business is among the top profitable ventures to start in 2023. 

In this article, you will learn how to create a payment processing business in 2023 and explore cutting-edge products on the market. 

Payment Processing 101

Payment’s journey from the moment it is initiated by the customer up to the moment it is received by the merchant is what we call payment processing. It is a deep and multi-stage procedure that involves vital payment players: the issuing bank, card networks, payment processor, payment gateway, and the acquiring banks.

Truth be told, building a payment processing company is not a simple venture, especially if you plan on starting one from scratch. However, even though the ever-evolving landscape of the payment industry can seem confusing, we are ready to assist you with the fundamentals.

Starting a payment processing company in 2023: the primary options

With the constant advancement of modern technology, there is more than one way to start a payment processing company in 2023. Obviously, you can stick with the classic and build a new one from scratch. However, there are also ready-made solutions based on which you can build your payment processing company. Let’s look at all your options!

 

• Develop your own payment solution

 

At present, this is the most technologically sophisticated choice for starting a payment processing business. Indeed, payment software built from scratch will be tailored to your specific needs. You will manage every stage of its development to create a truly original, high-quality product. However, before you decide to start creating a payment company from zero, you need to assess your alternatives. 

The first key point is the resources needed to create your own payment solution. A competitive payment software that complies with regulations and offers advanced functionality will cost you about $1M and take about a year.  

Secondly, it is imperative to have a competent developers team with hands-on experience in building payment software from zero. They are the ones in charge of the quality of your product, ensuring that all your efforts and resources are not wasted. Your best option is to have your own team of developers, however, outsourcing is also a possibility. 

Thirdly, you are here for the long run. If you create payment solutions from scratch, you should not expect quick results and profits. Investing in development takes a lot of time and effort, which means that it will take about a year to see the first results.

Lastly, if you lack at least one of the resources mentioned above (a professional team of developers, costs, or time), starting your own payment processing company will be too much of a gamble. But no worries, there are ready-made and time-tested payment solutions you can make use of when starting a company.

 

• White-label Payment Gateway

 

The white-label Software-as-a-Service model of purchase means you buy ready-to-use payment processing software from a vendor and resell it to merchants under your own brand and terms. One of the main benefits is time-to-market which takes about 2-3 weeks with zero development and maintenance costs required. Cost-effectiveness is another major benefit. The approximate budget for a year and a half of using a white-label SaaS payment solution is around $100K.

Your choice of white-label payment processing software provider will determine which technologies you will use and how many payment connectors you will be able to integrate. For instance, Akurateco Payments Orchestration Company offers 200+ integrated banks and payment providers for an uninterrupted payment flow. When you choose the SaaS model of purchase, you start working on a Payment Card Industry Data Security Standards (PCI DSS) compliant payment solution that incorporates smart routing, cascading, advanced anti-fraud, tokenization, automated billing, and invoicing among other cutting-edge technologies.

 

• On-premise payment software

 

On-premise payment software, unlike SaaS, is installed on the Cloud Infrastructure of the client’s choice or his dedicated Infrastructure. The on-premise model should be considered in case the country where you plan to process transactions has its own payment regulations. For instance, the Saudi Arabian Monetary Authority (SAMA) regulates payment service providers in the KSA, allowing them to process transactions only if their payment infrastructure is hosted within the country.

 

• Source Code purchase

 

The most advanced option is Source Code purchase. It implies the acquisition of rights to the Source Code of the payment solution with the ability to change it according to your needs. In simple words, it is an opportunity to purchase a ready-to-use up-to-date payment software with all advanced payment technologies, allowing you to further customize and change it. Of course, the cost of the Source Code option corresponds to its capabilities, but it will definitely be cheaper than creating a payment solution from scratch.

In a nutshell, you have two main options for payment processing business development: creating your own software or buying/renting one from a payment software development company.

The long road to success: building a payment processing business from zero

If you have enough time and resources to create your own payment processing business from scratch, the following steps should be taken:

1. Undertake thorough research of the market and create a detailed business plan, including the geography of your customers, the number of payment integrations you will provide, the technologies you will use, and the fees you will charge. Also, do not forget about the development of your brand’s marketing strategy to attract customers.
2. Prepare all the necessary documentation and register your payment processing business.
3. Buy or rent high-quality equipment to start the development process.
4. Hire a professional team of developers experienced in building payment processing software from scratch.
5. Complete the development process (undoubtedly the most significant part).
6. Obtain PCI DSS certification and comply with the necessary regulations if needed.
7. Take your time to team up with global and local banks and payment providers that will be available to your clients.
8. Launch the Minimum Viable Product (MVP).

This is a draft of the creation steps for a payment processing business that can be described briefly. Each of these points has hundreds of sub-points and specifics you need to master if you want your business to succeed. Nevertheless, there are easier yet no less efficient options.

Simplify your journey: buy/rent white-label payment processing software

If you want to start your solid payment processing business quickly and with no hassle, a white-label payment solution might be just what you’re looking for. As you already know, you have three options to choose from:

• White-label Software-as-a-Service is suitable for those entrepreneurs who are looking to rent a cost-effective solution with advanced payment technologies;
• On-premise payment software is a viable option for payment processors who are planning to operate in regions with regulations obliging them to host payment infrastructure inside the country;
• Source Code purchase is a premium option with unlimited customization opportunities for seekers looking for an alternative to building their payment gateway from scratch but are still requiring a personalized payment solution.

Conclusion

Since the first online payment was made, the payment industry has been growing rapidly from year to year, which contributes to the growth of new payment startups backed by solid investments. However, those who plan to become payment processors need to hit the road while the market is not yet overloaded. If you want to start a business in the field of payment processing, you can get a free consultation from Akurateco experts and discuss the most suitable payment technology for your business on the market!