Hello! What do you think, how much earns Clickbank and 2CheckOut? How much money should somebody to have to establish a company like these?
Each of those businesses has a rather complex business system, from my viewpoint, at least. If I were to start something like that, I would want more that $3,000 capital. I agree with mikejmu, though, get a really good business plan before you start.
I am not sure about Paypal and 2CO, but I think Stormpay was on auction on eBay for about $2 Million. I know because I saw it on auction there. But never heard the news of any sale anywhere. Strange because when I saw it, one person had actually bid $2 million for it. (But I am saying these things from memory. So I could be wrong about the price). Ayush
With 2checkout, they advertise publicly their turnover, and you know what they charge, plus you can find out on the web what card companies charge, so what is left is the overhead only (support, website, ....).
You will need more than $3,000 to start a business similar to 2CO, Paypal, etc. You need great financial backing. And you will find most acquiring banks will not support this type of business any longer - there are some still out there. Paypal, Sporg etc are all grandfathered in after the new regulations were designed. Visa / MasterCard like to control their money and using a 3PP - well the money is no longer controlled by them. They only know it is going to 3PP and not John Customer.
It doesn't really matter what 2CO, etc makes, IMHO. Work up a business plan, and calculate how much YOU can make.
First get some connections in the financial/merchant field. Without them I think, in this sort of business, you can't do much. And the programmers... I would start with lawyers first. Btw. Why do you think there is so little SERIOUS competition to 2checkout and Paypal?
Yes, I agree that you should get a lawyer. Just with the basic setup of those companies (handling other people's money, etc.) you are on complicated legal ground (IMHO).
Either you didn't understand me, or I didn't understood you, nevermind, what I meant to tell is that there is NO COMPETITION. As a potential customer, I have been researching these kind of companies at least two or three times, in the past two years. There is no competition to Paypal, and there is no competition to 2checkout. Serious competition, I mean. Services that you would have close to little problem (there is always some little risk at least) to entrust your money. That really bothers me, as a client, because I have almost no other choice. Well of course, besides signing up with for a merchant account directly...
Sorry, I didn't understand you! I will wait a half year or a year, and than I'll began to work on the project! I have about $10000 to invest!
If you are really serious about doing this - you need to probably become an ISO / MSP to learn the ropes of Visa / MasterCard. Registration for this is about $10,000 - $15,000 per year I believe
Paypal and 2co are 3rd party processors. We tried to help a company do this about a year and a half ago. You have to sign up directly with Visa and Mastercard, AMEX, etc. The problem with these companies, is they sort of bypass credit card processing regulations. They process payments for other businesses which is technically against the rules. Because of this, it is extremely hard to get approved as a 3rd party processor. Anyway, the company that we were helping had a very strong business plan, and excellent financial backing (in the hundreds of thousands). They got nowhere near getting approved to do it. We have had 5 or 6 companies inquire since then , but after the first, we all realized that it is an unobtainable venture. At best guess, I would say you need a strong 7 figures of money backing your company. Perfect credit, and some excellent relationships within Visa and MasterCard to even have a smear of a chance. The reason that there is no competition is not that no body has tried, its just that nobody has succeeded. I would love to see paypal get some really strong competition. Maybe google can do it, but besides companies like that with endless pockets, I don't think there is any way at all for a startup to break into the 3rd party processing industry.
Very nicely said, and from insider to it. Btw. from the legal point of view, 2checkout is in fact not a third party processor, but a reseller of their partner's products and services. I think that's what helped them to stay in that business.
That is their business plan & how it is written. It is all about the words and how they are interpreted. There is money to be made but it is going to cost quite a bit to get it set up. When I was consulting with Blue Cross on HIPAA, my business partner was an FI (fiscal intermediary) with them. People could pay him and he could pay Blue Cross. We were in the final steps of setting up something similar to a 3PP for healthcare, but in the final days, the acquiring bank decided that it was not valuable, even though billions are spent every year in the healthcare industry. To give you an example, since we were accepting payments on behalf of a third party and the ACHing them to another user, there were about 29 states that you had to register with ($10,000 a year) to be able to move money into that state. There are so many regulations that have to be dealt with that it is almost impossible to accomplish. But if you have the money, the time, the patience, and more money and time, it can be done.
Wow, I had no idea they would put themselves on Ebay...lol, why would't they just use their own auction system for that Anyhow, I know they were raided by the FBI and it's illegal for anyone in Tenessee to do business with them out there, but I don't know the specifics on the outcome or what they were charged with, I have a buddy out there that lives very close to their hq, and he said at one point they were ran out of a garage? Anyone know more? Chris