How to start an online payment gateway provider


I would like to know what it takes to provide an online payment gateway like worldpay paypal etc


asked Jan 28 '11 at 15:46
6 points
  • Money, and lots of it! – Tauren 13 years ago
  • Wow very big aim . – Mazhar Kaunain Baig 13 years ago

1 Answer


  • Connections to executives at Visa, MasterCard and American Express. As no standard merchant agreement will allow factoring (processing transactions on behalf of another entity), you'll need to have your entire business supported by the card networks themselves.
  • You'll need one or more banks to get on board to underwrite your accounts.
  • You'll need to hire people in each country you want to operate in to register as a bank, comply with local regulations, and bribe local officials in countries where that's necessary. Yes, in several countries, 3rd party processors like PayPal are considered banks and have to operate as such.
  • You'll need several hundred thousand dollars just to start the process rolling, banks won't even let you become a normal merchant services provider with less than that in equity to show, let alone become a 3rd party processor.
  • You'll need to build the best fraud detection systems in the world, as that's the only reason PayPal is here today while their many dot-com-era competitors went out of business. PayPal was bleeding millions of dollars a month to fraud until IGOR was operating.

If you're serious, your best bet might be to pitch and chase whatever VCs invested in Square, just to get the benefit of whatever their partners have learned about getting a new payment processor off the ground.

answered Jan 28 '11 at 21:25
Dan Grossman
303 points

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