As per several industry experts, “Bears are taking over the stock market”. This is after being in a bull market for close to a decade, but now we are going into a bear period. The majority of investors in the past decade purchased stock with the intent to sell them at a higher price shortly after. The formula of “buy low, sell high” isn’t as effective in a bear market.
The merchant services market is experiencing a similar situation. Most companies want to use their merchant services to generate income. To make more profits, companies attempt to become payment facilitators and gateway providers. Issues pop up unexpectedly if you are trying to set up a PayFac or a payment gateway project and the devil are in the details.
Actually, those who are trying to set up a PayFac or gateway provider for the first time might be confronted with a hungry bear and could get mauled. “Bear bites” indicate unforeseen bureaucratic processes, new specification requests, and constraints of acquirer’s operating system, that are only applicable to PayFacs and gateway providers. Similar to a hibernating bear, projects might slow down if you are caught up with prolonged integration and development activities.
If you follow the simple rules outlined below, you could prevent bear naps and bear bites.
The required 4 steps for a potential payment gateway provider are outlined here.
- Locate an acquiring bank.
- Get this acquirer to give you the specifications needed.
- Create a procedure to secure a point of entry into the banking structure.
- Set up your gateway in a setting that is PCI compliant.
If you don’t follow the proper steps in order and “thou puts the wrong foot before”, the bear might bite.
Answer the following 4 questions BEFORE becoming a PayFac.
- The merchant IDs, how are they allocated? (Will they be reserved ahead of time? Or are they allocated on a per-merchant basis or in groups?)
- What kind of connectivity do you require (if any) besides a connection to the internet?
- What type of details do you require in reports and statements?
- Do you require a terminal solution? If so, what kind?
For newbies, bear markets could be harsh and ruthless. Furthermore, it doesn’t matter if you are referring to the stock or merchant services market. Always be alert and be sure to comply with the new game rules. Therefore, you can still claim your reward and prevent unneeded waste of money and time.