This week we’re talking with Rich Consulting president and compliance expert Deana Rich about underwriting payment facilitators. How is it different from underwriting other entities, and what are some of the special considerations?
Acquirers who are thinking about entering a relationship with a payment facilitator need to fully understand the risks and how to control them before making the commitment, Rich said.
“It’s like underwriting an ISO, it’s like underwriting a third party, and it’s like underwriting a merchant all in one, so you have to ask yourself if you’re ready for that.”
Regulations are important in the payment facilitator world just as they are in any other type of payment processing business. Acquirers have to be aware of MasterCard and Visa rules, government regulations that protect consumers from harm, and regulations that guard against criminal activity such as money laundering.
“This sounds onerous, but in fact, those are the same regulations and regulatory bodies that apply to our typical processing world that also apply to the payment facilitator,” Rich said.
While businesses looking to enter the payment facilitator world need to do so with their eyes open and be aware of the risks involved, that isn’t a reason to shy away from them.
“I’ve seen many, many great payment facilitators and companies that have proper oversight and they’re not as risky as they seem. Once you know what you’re doing, it’s a fabulous market,” Rich said.
She shares many more insights into underwriting payment facilitators in this week’s podcast.