Web Hosting Talk : Web Hosting Main Forums : Ecommerce Hosting & Discussion : Setting up a payment processor?

[patriotcow]

Hi,

I am thinking about the idea but not saying I am going to be. Just wondering if I had the site would I be able to use worldpay to process the credit card transactions?
Also would I need to get a licence of any sort?
What other things are required?

Thanks
Stephen.

[Corey Bryant]

For merchants not in the United States, they seem to be pretty stable. I know as a consumer, we had some problems with their gateway a few months ago but since then - everything has been fine.

Usually when you apply for a merchant account, you are asked to complete an application. Every processor is different & it also depends on where you are located

[patriotcow]

Thanks for that information but I may have display my question wrong. When I say setting up a payment processor I did not mean getting an account with one I meant actually setting my own payment processor up similar to paypal but would use worldpay to fund accounts. What would I be required to do to setup such as site.

Thanks
Stephen

[Corey Bryant]

Fund accounts? What accounts? Worldpay is a company that allows you to accept credit cards. It is against their terms of service and acceptable use policies to set up a company that will aggregate funds (be a third party processor).

To become a third party processor, you need to find a bank that will underwrite you.

Another approach - contact a company that offers stored value cards. And fund the consumers / merchants that way. Somewhat similar to what Ikobo does. A few people I know have started doing this if their business is large enough & warrants it. It all depends on your business plan and model

[TheTop]

Worldpay charge about U$100-400 depending on what country you are in ... and they have high monthly fees ...

Although what you wanting to be doing is to become a reseller for worldpay ...

If you don't want to be a reseller but a merchant account provider ... you'll have to set up a merchant account and here's the kicker ... you will have to have substantion money in that account as you will be a mini-bank and be able to provide for chargebacks, refunds and any other problems that might arise ...

What you are suggesting is a good business idea but it will require substantial capital investment from you and a lot of legal backing ...

[patriotcow]

Well I will be using my website to issue chargebacks. As the question I was asking was if people can pay to fill their accounts on my website using my worldpay account, So is that possible?

[Corey Bryant]

Fill their accounts on your website? What do these accounts do? Are you wanting to set up something like a Paypal (a third party processor)?

[TheTop]

Yes it is 100% possible ...

.. but what we are saying is that it will be up to you to mantain the virtual bank ...

I mean if your server crashes do they all lose their money ...

[Corey Bryant]

It is against Worlpay's terms of service though if it is a third party processor. It is very difficult to open up a TPP these days.

[patriotcow]

Well no people will not lose there money if the site goes down as it will be recorded onto another server for backups. Also are you sure worldpay will not allow this. All I will use worldpay for is for the credit card bit for them to fill their account on my site.

[Corey Bryant]

What are these funds going to be used for? To pay other merchants? If so - it sounds like you are trying to become a third party processor or aggregator which is against most processors acceptable use policies.

[patriotcow]

Well the idea was for an online auction site. People would use my payment site to pay for their online auctions at my auction site using their accounts on my payment site which they fund using worldpay,

Noticed your site, Would your merchant accounts alow what I want?

[Corey Bryant]

Auctions are a bit tricky. It would definitely be high risk. Because you want people (whom you have never met) to be allowed to use your merchant account to sell items (that you have not tested) to other people (whom you have never met).

Ebay for example, they let the sellers rely on collecting payments.

To answer your specific question - I am not too certain. The risks involved are so high. What happens when someone sells something on your site (say a large itme for $2,000). And the seller gets the money & skips town. It is not what the buyer wants so he does a chargeback. You are responsible for that money

[TheTop]

I agree with coreybryant ... this is similar to what I said above, in this case you become a micro-lender or mini-bank.

[TheTop]

If you want to see a site that does auctions without handling money and just charging a fee see www.bidorbuy.com