How to become a PSP without development efforts
Today, around 3,8 billion people have smartphones. Almost 60% of the world’s population have access to the Internet. These figures continue to grow year over year, encouraging the transformation of consumers’ behaviour and triggering businesses worldwide to adapt to those changes.
The ongoing digitalisation received an additional boost from the COVID-19 pandemic and long-lasting lockdowns that followed in many countries. New reality cemented online shopping and digital payments as convenient and safe ways to simplify people’s daily lives.
In its turn, the need for scalable and reliable infrastructure to power the online economy increased significantly. The payment service provider (PSP) market will more than double in the coming years, growing from roughly $40 billion in 2019 to a staggering $88 billion in 2027.
You can become a part of this game-changing snowballing market by establishing your own PSP company without significant investments. In this article, we’re going to learn how.
Ten major steps of starting PSP company
If you want to deal with starting a company by your efforts, the main steps necessary can be conveniently rounded up to 10. Let’s divide them into two categories to make them more digestible.
The first category includes business steps:
- Do market research. Decide where you’ll be registering your new business, which legislation is in place there, and would you be able to handle complying with it. It’s better to have a highly qualified lawyer with solid market knowledge to help you set up a company following local regulations. Evaluate the demand level for payment services in your geography and examine competitors’ offerings.
- Create a business plan. Without having a thorough plan before starting any business activity, you’re most likely to waste money and take your lumps. So, based on the insights gained after the first step, plan out what your exact offering will be, how much you will charge, how much money you need to start and maintain operations.
- Find banks to partner with. Research in which banks you can open accounts for your activity. These banks, or bank, will underwrite your transactions and route them between banks. Having a detailed business plan increases the chance the bank would agree to work with you significantly.
- Get the necessary equipment. The equipment you need depends on the business models you’ve decided to settle on and the services you’re going to provide. Aside from the office equipment any modern business needs, you might as well need processing terminals, servers, ATMs, etc. If that’s the case, leasing can help you get what you need without placing a financial burden on your newly-started business.
- Hire sales and marketing professionals. Regardless of how sophisticated and beneficial your offering is, it has no point if your target audience has no idea your company exists. Marketing and sales teams will spread the word about you, growing your customer base and thus your income.
The second category embraces technical steps. These can vary from PSP to PSP, but generally are the following:
- Development of the payment software. Though being boiled down to our guide’s single humble step, it implies a time- and resource-draining process. It starts with planning and feasibility analysis, followed by design and coding. Place a great deal of focus on building a decent Checkout, as it is a crucial consumer-facing element of your system. You’ll have to hire a development team and be ready that the development may take months of hard work. After that, the MVP should be implemented and tested before it can be rolled out to the market. And this process never ends, as you must ensure your product’s stability and scalability, consistently maintaining and updating it.
- Purchase hardware security modules (HSM), tokenisation appliance, or both. Based on the services you’re about to provide, you’ll need one or both of these encryption solutions to deal with card payments. It is necessary to ensure security and comply with the PCI tokenisation requirement.
- Build a server infrastructure and complete PCI DSS assessment. You will need it to process and securely store transactions’ details and cardholders’ data. Bear in mind that the PCI audit must be completed annually, and it is far from being free.
- Select and integrate with banks, processors, and gateways. Given the high level of competition in the market, your payment solution must be versatile and scalable enough to fulfil clients’ needs. That’s why it is crucial to have many partners in the industry.
- Maintain and update your product. The neverending process of maintenance and betterment is a cornerstone for a successful PSP company.
How to take the technical pain out of becoming a PSP
If you made it this far, chances are you’re wondering how everything described above correlates with ‘without development efforts’ in the headline. But the thing is, some companies can cover all technical aspects from the guide for you, offering white label solutions at a reasonable price.
Why wasting time and resources trying to develop something that industry experts have already done and are offering to you with a cherry on top? Relying on a ready-made product empowers you to switch focus from pocking around the technical issues to handling business operations and building strong relationships with clients.
Why choose white label PSP by Corefy
We’ve been gathering insights on the best practices in payments for more than ten years, developing and bringing payment products to the markets worldwide. This knowledge is what our white label PSP is based on.
The essence of our offering is a combination of Corefy’s payment and payout capabilities with a feature-rich white label merchant back office.
With this product, you can roll out your own branded solution to the market and earn money by setting up fees for any service you decide to provide, be it incoming or outgoing transactions.
Another great source of income our white label PSP gives you is FX rates. All transactions involving currency conversion will be processed according to the exchange rates selected by you.
White label merchant portal allows running multiple businesses conveniently, having separate commerce accounts and individual settings for each of them. You and your merchants can keep track of funds available on the accounts in multiple currencies in real time. Auto-generated detailed monthly reports help with monitoring and controlling cashflows.
Although our white label PSP reminds us of a life ring for aspiring payment companies, we don’t just toss it and watch. We’re always there to help with onboarding, offer technical assistance, implement new features or establish new connections clients require.
Companies that already run their payment business on our software saved months of time end efforts and up to $500k in development & maintenance costs. Moreover, they got themselves a reliable and future-proof technical partner. You can, too. Get in touch!