Dear DPF ians I wonder what is requared to issue debit cards from VISA, should company be "financial institution" and have contract binded with VISA? (or MasterCard) I am interested in theory (I dont own company neither planning to issue cards) what I mean is that I have seen some companies that use cards to deposit/wirthdraw egold from ATMs as example... or for depositing money earned in advertising... or sendin' debit card just as type of money sending method... any info?
It depends on which countries that you want to operate in.... at high level, you sign a contract with Visa to issue cards and you build an IT system to interface with theirs. You almost certainly will also have to satisfy laws in your country in terms of having reserves of money to cover the debt you are giving to your customers. The stumbling blocks are naturally the monies as whilst in theory with money cannot go out without funds being there to cover it in your customers account the reality is that incidents can happen that causes people to be able to spend more than they have available therefore you must have reserves to cover this overspend. The second element is what are you going to do with all the money you are bringing in as deposits before the people spend it? Banks invest the money in lots of different ways but one key one of cause is lending the money who want credit and then you get into another world of regulation. The VAST majority of cards, in the UK at least, are issued by about 8 companies even though there are thousands of different branded cards. All the others are white label services that the large companies offer - so they issue a card with your companies logo etc on it and then it is down to the individual contracts to determin who does what, in most cases the partner company is simply responsible for marketing the card and the financial company is responsible for everything else. For these types of setups there is two ways they are funded either 1) an annual fee which covers the base cost involved in running the scheme and then any profits made by the scheme are split between the two companies or 2) A setup fee is charged (for my previous employer it was circa £500,000) and after that a single flat payment was payed per customer per year (I cant remember for the cards business but for the insurance business it was £35 per annum). Whilst profits are lower this route you massively reduce setup costs and avoid 95% of the compliance issues as naturally the financial services company already has all the licenses etc necessary
I think you need a company for that.. i mean a fincancial company.... and maybe you need certain amount of turnover too.....
In the UK you dont, you could be a sole trader doing it, however you do have to be able to put several million into reserves as well as paying all the legal and regulatory costs plus the IT standards to achieve compliance - you cant host your banks website on a shared webhost
I the US, some financial institutions give you the possibility to white label their cards with your design and name.