How can someone launch a Stripe- or Braintree-style payment processor in sub-Saharan Africa?
Payments
Asked by Question Bot01/Dec/20121 answer
1 Answer
F
Faisal Khan
Answered 01/Dec/2012
The question is honestly a very broad and open one cannot possibly answer in its entirety, however, will provide you general points.
For starters, you would need to partner up with a bank. You can go solo, but believe me when I say this, that road is paved with problems.
Partnering up with a bank, preferably one that has acquiring association to VISA &/or Mastercard will make the entire exercise inherently easy for you, since the compliance and legal components, investment, etc. would already be taken care of. You would also need a banking association (read: license) because you would be holding and channeling funds, this is why partnering up with a bank is advantageous for you.
You would then need to have a software solution in place, to allow for you to operate a payment gateway. Both VISA and Mastercard provide a very extensive documentation set for this, however, getting your payment gateway certified on your software solution by VISA and/or Mastercard can take a couple of months (think 5-6 months easy).
A payment gateway can be coded from scratch (though not recommended) or alternatively, you can work with an off-the-shelf solution.
There are software solution providers who make such payment gateway software, its pricey, but it would be compliant, integrate well with the core-banking software, would have all the bells and whistles on how to handle merchant services, accounting, fraud management, etc. Some prominent names are HPS Worldwide, SunGard (AvantGard), Clear2Pay, TSYS, IBM, ACI Worldwide, Tarang, etc. (literally there are many providers in this arena).
All these providers have APIs that developers can work with to route payments online.
If capital expenditure is an issue, you can try working with providers who can offer such a service to you on a SaaS / Per-transaction model. Companies like Euronet, TSYS, TNSI, and many others can help you in this. You will have to research this area to see which one of these providers will work in your geographic region with your bank.
A self-invested payment gateway solution can start anywhere from US$ 200,000 mark (on the low side) and go up to the $ 2 Million mark easy. It all depends what models of acquiring you are considering. Since you have cited interest only in the online payment gateway services, the cost can be minimal.
If you plan to utilize the interbank funds settlement/transfer switch in your part of the world (if there is one), then most likely your bank would already be having access to it - via their middle tier software. Also, such a system can be customized to take advantage of the localized cards (if you have any in your country), and not just work with VISA / Mastercard. Even ATM card can work online if law allows and you have access to the ATM switch (via the bank).
For starters, you would need to partner up with a bank. You can go solo, but believe me when I say this, that road is paved with problems.
Partnering up with a bank, preferably one that has acquiring association to VISA &/or Mastercard will make the entire exercise inherently easy for you, since the compliance and legal components, investment, etc. would already be taken care of. You would also need a banking association (read: license) because you would be holding and channeling funds, this is why partnering up with a bank is advantageous for you.
You would then need to have a software solution in place, to allow for you to operate a payment gateway. Both VISA and Mastercard provide a very extensive documentation set for this, however, getting your payment gateway certified on your software solution by VISA and/or Mastercard can take a couple of months (think 5-6 months easy).
A payment gateway can be coded from scratch (though not recommended) or alternatively, you can work with an off-the-shelf solution.
There are software solution providers who make such payment gateway software, its pricey, but it would be compliant, integrate well with the core-banking software, would have all the bells and whistles on how to handle merchant services, accounting, fraud management, etc. Some prominent names are HPS Worldwide, SunGard (AvantGard), Clear2Pay, TSYS, IBM, ACI Worldwide, Tarang, etc. (literally there are many providers in this arena).
All these providers have APIs that developers can work with to route payments online.
If capital expenditure is an issue, you can try working with providers who can offer such a service to you on a SaaS / Per-transaction model. Companies like Euronet, TSYS, TNSI, and many others can help you in this. You will have to research this area to see which one of these providers will work in your geographic region with your bank.
A self-invested payment gateway solution can start anywhere from US$ 200,000 mark (on the low side) and go up to the $ 2 Million mark easy. It all depends what models of acquiring you are considering. Since you have cited interest only in the online payment gateway services, the cost can be minimal.
If you plan to utilize the interbank funds settlement/transfer switch in your part of the world (if there is one), then most likely your bank would already be having access to it - via their middle tier software. Also, such a system can be customized to take advantage of the localized cards (if you have any in your country), and not just work with VISA / Mastercard. Even ATM card can work online if law allows and you have access to the ATM switch (via the bank).