Learn how to start a payment processing company the right way, from referral partnerships to Registered PayFac models. Whether you're a SaaS, business, bank, or consultant, Swipesum helps you monetize payments, manage compliance, and build a full payments strategy.
Updated November 2025 by Swipesum’s Payments Experts
About a decade ago, payment processing was distributed in a completely different way than what we're seeing today. Banks and independent sales agents owned the merchant relationships, and everyone else... software platforms, service providers, and consultants simply referred customers to them. Payments were a side note, not a strategy.
Then came the software wave.
When Shopify launched Shopify Payments, it quietly changed the industry forever. What was once a cost center became a core profit engine. Shopify’s in-house processing now drives hundreds of millions in annual profit, eclipsing the revenue of many payment companies outright. Every board noticed. Every investor noticed. In the years since, payments have shifted from a “nice-to-have” add-on to a board-level expectation. If your platform, bank, or business works with money flowing through it, you’re expected to monetize those payments, or risk leaving a major opportunity on the table.
That’s why venture capital poured into new players like Rainforest, Finix, and Payabli each promising to make embedded payments easy enough to rival Stripe Connect. What started as fintech innovation has become table stakes for SaaS and service platforms. So if you’re searching “how to start a payment processing company”, there’s a good chance your customers have been asking too, or your investors already have.
And whether you’re a SaaS founder, a bank, a consulting firm, or just someone exploring how to make side-income from payments, this guide is your roadmap. Swipesum has helped companies at every stage, from referral partnerships to fully registered PayFacs, find their path, negotiate their contracts, and launch payments strategies that actually work.
There’s no single path to becoming a payments company. The right structure depends on your size, goals, and appetite for risk. Below are the four main tiers, the same framework Swipesum uses when consulting with SaaS platforms and enterprise partners.
Who it’s for:
Banks, accountants, consultants, and small software companies that want passive revenue with zero setup.
How it works:
You introduce your clients to a processor and receive a referral share of transaction revenue. The processor handles underwriting, onboarding, and support.
Pros:
Cons:
This model powered the industry for decades, but today, it’s just the starting line.
Who it’s for:
Individuals or small firms with a strong network of business owners. You sign merchants under a processor’s umbrella, earning ongoing residuals. It’s quick to start but carries little long-term value. Swipesum does not endorse this way of selling merchant services, but if it is actually the best way to get you up and running we can help structure it in your favor, with the best solution available on the market.
Why most businesses outgrow it:
For individuals, it can be a solid side-income stream. For serious companies, it’s a bridge to becoming an ISO.
Who it’s for:
SaaS platforms, franchises, or consultants ready to own their payments experience. At Swipesum we love this model, and most of our successful projects are centered around this, you get the most reward with the least risk. There are hundreds of options for solutions providers, and you own your book of business. This is also the stage which you will start to assemble an in-house payments team, which most companies don't account for. Ifyou want to talk through this book a quick consultation, on the house, with Team Swipesum.
You register as an Independent Sales Organization with an acquirer such as Elavon, Fiserv, or Worldpay. Expect about $10,000 per year in registration fees but gain control over branding, pricing, and data.
Turnkey providers: Stripe Connect, Zift, Rainforest, Finix, let you embed payments directly into your platform without becoming a full PayFac. See Zift's full documentation here.
Pros:
Cons:
This is where most modern SaaS platforms sit today, and where Swipesum spends much of its time helping clients evaluate options, negotiate rates, and deploy embedded payments successfully.
Who it’s for:
Fintechs or enterprises that want total ownership of payment flows.
Becoming a registered Payment Facilitator means registering with the card networks, building full PCI and AML programs, and taking on transaction risk.
Costs:
Usually $250,000+ upfront with significant ongoing compliance.
Reward:
You control everything: fees, onboarding, settlement, and data, but you also assume every liability. Swipesum works with organizations ready for this step, helping architect the acquirer relationship and compliance stack to handle it responsibly.
Before you pick a path, get clear on the trade-offs between speed, cost, control, and compliance. Use the chart below to benchmark what it really takes to launch... from a simple referral motion to a fully registered PayFac.
What this means for you: Most failures happen when teams underestimate risk management and support. Pricing is only the beginning, merchant experience (onboarding, payouts, chargebacks, and white-glove support) determines whether your economics hold up or churn destroys them.
Where Swipesum fits: We model your true unit economics, audit contracts, negotiate platform and acquirer terms, and provide ongoing merchant support under your brand. The outcome: a payments strategy that’s not just live, but profitable and defensible.
Payments have become a core business model, not just a feature. In 2015, only major fintechs like Square and Stripe monetized transactions. In 2025, even small SaaS platforms and consultants are expected to. If you’ve been asked, “Can we make money on payments?” the answer is yes, and your competitors already are.
Vertical SaaS companies: whether you serve gyms, healthcare, construction, or e-commerce, now use embedded payments to create new profit centers. When your customers process payments directly through your software, you share in the transaction revenue. The more volume you move, the more you earn, often 30–70 basis points per transaction.
Swipesum’s role:
We act as your Chief Payments Officer, designing and managing the payments layer inside your product. We negotiate processor contracts, monitor risk, and ensure that your economics stay positive as you scale.
Banks and advisors used to own the merchant relationship. Then fintechs like Stripe and Shopify took it over. Now, those same banks and consultants can regain that value by becoming embedded payments partners instead of simple referrers. Swipesum helps structure these partnerships so that your brand retains visibility while the processing infrastructure runs quietly in the background. You keep the trust and earn new revenue, without touching compliance or support.
If you’re not just adding payments to an existing company, but starting one from zero, here’s your high-level roadmap.
Reality check:
Launching a processor from scratch is a major undertaking, usually a six-figure build requiring a team, an acquirer relationship, and a compliance stack. That’s why many new entrants now partner with Swipesum: we shortcut the path with ready acquirer relationships, tech experience, and negotiation leverage.
Below is the side-by-side comparison you’ll see in nearly every Swipesum consultation. It shows how revenue, control, and complexity evolve as you move up the payments value chain.
How to interpret it:
The higher you climb, the greater your control and long-term value, but the more complex your compliance and capital requirements become. Swipesum helps clients find the “sweet spot” between profit and operational simplicity.
Swipesum exists because most companies weren’t built to run payments operations.
We bring the team, tools, and experience to act as your Chief Payments Officer-as-a-Service, helping you launch or optimize your payments strategy with confidence.
What we do:
With over $20 billion in processed volume under consultation, Swipesum knows how to turn payments into profit... without adding risk or overhead.
Talk to Swipesum’s team to discover how much your business could earn from payments.
Do I need a license to start a payment processing company?
Referral partners do not, but ISOs and PayFacs must register with an acquirer, and registered PayFacs may require additional money-transmitter licensing and PCI DSS compliance.
How much does it cost to become a payment processor?
From $0 for referrals to $250K+ for a registered PayFac. Most businesses find their fit in the PayFac-in-a-Box range between $25K–$100K.
How do payment processors make money?
They take a small portion of every transaction, typically measured in basis points (bps), often adding up to hundreds of thousands in recurring revenue at scale.
What’s the difference between ISO and PayFac?
ISOs operate under an acquirer’s brand. PayFacs manage onboarding, settlement, and pricing directly, either partially (PayFac-in-a-Box) or fully (Registered PayFac).
Can I embed payments without risk?
Yes. Using a PayFac-in-a-Box or embedded payments provider, you can add payments inside your platform while the provider manages compliance and risk.
Ten years ago, payments were sold by banks.
Today, they’re built into software.
If you’re not monetizing payments yet, your competitors already are. Customers now expect integrated payments, and investors expect you to capture that revenue.
Whether you’re embedding payments, starting an ISO, or evaluating a full PayFac strategy, Swipesum helps you do it right, with expert strategy, flawless execution, and ongoing optimization.
Payments done for you... powered by Swipesum. Talk to an expert today.
RECOMMENDED
HELPFUL CONTENT
Michael Seaman
Michael Seaman is the co-founder and CEO of Swipesum. A veteran of the payments industry and former employee at one of the largest payments companies, Michael, along with his brother Stephen, has led Swipesum since its inception in 2016. Swipesum is committed to providing innovative payment solutions and exceptional service to its diverse clientele. In his free time, Michael enjoys traveling with his wife Kelsey and their three children, pole vaulting, and engaging in typical Midwestern dad activities.
Read moreRequest a CONSULTATION
Meet one of our payment processing experts to see if working together makes sense.
We will schedule a quick consultation call to go over how you're currently handling merchant services and present a proposal at no cost.
By submitting this form you agree to receive information about Swipesum product updates via email as described in our Privacy Policy and Terms & Conditions.
