hello WHTers,

excuse me sirs, I'm newbie, but learning e-commerce..because I'm studying that. back to the thread point, I couldn't find a correct title.

Here's the question. It may sound for a novice really.
how-to run a money transfer company? Things-like PayPal, iKobo, moreover to the money transfer functions, they also act as merchants to process payments by credit card over Internet.

I presume the answer would be a bit complicated, but I just need the starting point, I want to know how it works.

I tried to make some questions that can be related to the main question above.
* who is behind them? by whom are they operated?
* what it takes to open a money transfer company on the net?
* is it different from acting as an "internet money transfer" and "processing payments in real-time credit card processing"?
* how can I know that these "companies" are verified and legal firms?
* for them being offering CC processing to me, do they reserve the right to shut me down for any reason, or without reason and keep any pending funds with them?
* Any website for more information would be appreciated. hopefully I can get the answer from somebody here.

excuse me if that came to be a weird question. but I'd love to know more about this company that processes my payments, so on.

Best,

You will need to apply for a merchant account & tell them you will be an aggregator. Most processors will not accept this because it is way too risky. And you need to find a bank that will support this. What a lot of people are doing are now going to stored value cards - something that costs a little upfront, but a lot easier to get / maintain

Is it hard to apply for a merchant account? (knowing that I don't have a bank account in U.S.)

It is pretty easy to apply for a merchant account - but for the type of account you are requesting - very difficult. You need to show financials etc.

thanks corey for your help. :)
although I am not requesting such type of account.. I just wanted a little overview of how they're operated, so thank you. :)

for a normal merchant account, are there any conditions to apply for it? paperwork? etc. (International account, not U.S./Canada)

It all depends. Every processor requires something different I have noticed. Most require the same things but some always require something special / different.

For example, one company requires for EU merchants:

Merchant Contract for acceptance of MasterCard and Visa credit cards
Proof of company registration (current appointments)
Proof of residence (EU principal)
Copy of ID of signatories
Merchant Risk and Registration Application form
Chargeback history (including all previous acquirers during the past 3 months)
"Ownership and business structure/ description of the current bisiness model (as a diagram, if available)"
Completed Website or Telemarketing requirements

Thanks a lot corey, I'll try to contact you regarding further details as I need to change that "ikobo" thing to something more professional since I processed with them in the $x,xxx range for the month I signed up with them. I think it's more professional to setup a merchant account. but at this case I still don't know If it's available for me, so I can contact you for confirmation.

Thanks once again.

Originally posted by coreybryant
What a lot of people are doing are now going to stored value cards - something that costs a little upfront, but a lot easier to get / maintain

Hi Corey,

What is a value card? Or is it a debit card?

A stored value card is sort of like a MasterCard or Visa. it has one of their logos on it. And you put $500 on it. And that is how much you have to spend. You cannot spend $550 - it is not a credit card. I took this idea to a few companies about 5 years ago. I was basically laughed out of the offices because they told be it would never fly. I learned about trademarks the hard way. :angry:

Processing money like PayPal and Ikobo requires a "Money Broker" license. I honestly can't remember what the licensing cost was, but I do know it was a few thousand or so. And I think you have to be bonded, but I am not positive about that.

Looks like it's a real pain, not such easy thing as I thought with the web croweded today with many of these money transfer companies.