How To Start A Merchant Services Company
If you have arrived on this page, congratulations on at least THINKING about taking the leap to start your own Merchant Services Business. It’s a daunting thought right – but you are here, and that’s a start!
They often say “ it’s the thought that counts” and THIS is where your journey can begin.
This page is all about the obstacles and objections that we found whilst starting up our own Merchant services business Modern World Business Solutions and Why those obstacles and objections shaped the way that we would operate and how we created a partner centric business off the back of our experience.
In 2018 Modern World Business Solutions was founded, at this stage as a business we just wanted to operate under the same business model of most UK ISOs. We wanted to put feet on the ground and through the medium of self employed resellers we wanted to get our services in front of as many SMEs as possible through the “ we can save you money “ mantra.
At this time, we were too inexperienced to start our own ISO with a contract with an acquirer directly, and our MD, Warren Whitfield was brand new into payments, so we needed to partner with a company that we felt would support us in our early years as we set about our journey.
We found that company to partner with in First Payments, a First Data and Elavon ISO that would offer us support and hold our hand in the early years and teach us how the industry worked. This part of starting a new business should not be overlooked when choosing a partner, it’s imperative that the partner you choose are willing to support you through the journey and transitions that a business goes through in the early days.
Whilst we had the relationship in place on who we were going to funnel our applications through, we then needed to sort out our internal infrastructure, who would answer the phones, who would process the applications? – so we put a few job adverts out on local job boards and we started to recruit for two positions. One of these recruits, Charlotte still remains in the business today as head of operations.
The one vital ingredient that your ISO will need when just starting up is SALES – after all, you are an independent sales organisation, and without those sales coming through things will look bleak very quickly. So we set out to recruit self employed resellers of merchant services very quickly. After a good month of marketing and shouting about our brand we had managed to get a band of 20 or so sellers together to hit the streets.
The applications shortly after started to flow in.
In order, the things we had to organise to get to this stage were:
After 6 months we were all set up and trading. We had done it! We have launched our own ISO, or we thought we had anyway.
A little time passed and all looked to be working just as we expected. BUT – then, the phone calls started, the chargebacks (a charge back is when the funders claw their money back because a merchant does not pay) started to infiltrate through. – We had massively overlooked how the behaviour of the self employed sales staff that we had commissioned to sell our services would impact our business. We then realised that we had gone into this with our eyes closed and this had the potential to be disastrous for our business. So the next steps were put in place to protect us.
This was a vital part of building our own merchants services business that we had overlooked and it had the potential to close our business before we really got started. Please make sure you do not make the same mistake and ensure you are well protected.
It was at this moment that Warren realised that the model that we had created was unsustainable and the future of Modern World needed to look slightly different if we were going to build the business that we dreamt about. We felt that the large ISOs were too far ahead and for us to catch them wasn’t possible. Now, our MD thinks BIG, so he was looking to build a business that competed with the very best in the sector, we understand that not everyone’s thought process is the same and by continuing as we were, we still would have blossomed into a very profitable and successful ISO.
BUT – We learnt that the customer wasn’t being put at the centre of every sale, this was a problem sector wide, not just with us at Modern World and it was something that we felt we could try and change – but how?
We also felt that after being inside the sector for 6-8 months that we felt it to be a little disjointed. It was an un- regulated industry where anyone could start to sell payments, but with the options that were available at this time it made it difficult for anyone wanting to start their own payments business and offer an agnostic approach to payments. THIS is where we started to develop our business into what it is today as we wanted to support people wishing to start their payment processing business.
This is when we started to look at the idea of how we could be different in a crowded market and the aggregator platform began to take shape – We took our experience in starting a merchants service business and the problems and objections that we faced and created a business to help people just like us.
We now have a business in Modern World that makes it easier to set up your merchant services business.
Our platform answers a lot of the queries and objections that you would come up against and supports you with offering an agnostic approach to reselling payments.
Would you like to talk to us about how we can help you start your merchant services business by setting you up with our white label payments platform?
If so, please contact us by filling out the contact us form below.
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