If I wanted to create my own version of Authorize.net, what's the cheapest/easiest/fastest/legal way I could do it?
More importantly here, people aren't understanding your question....
Authorize.net is not a merchant acquirer, but a gateway, which is just hosted software. You do not need to get a merchant account to compete with Authorize. What you will need to do is write the transaction processing software, ie the gateway, and connect it with the various networks that banks have provide access to Visanet, etc.
I wouldn't trust a guy in a garage with my merchant account unless there was some money behind it. And if there is some money behind this and you are serious about doing this, I can help you get this done. PM me on my website - check my profile. If not, no worries and good luck...
I just read this great quote from Glenbrook Payments:
"It is hard to overestimate the depth of ignorance about card processing."
We use BrainTree for all this and they were very helpful. The technical terms they used for this was "third party payments aggregation". Because this is riskier for them, our account had to be underwritten by a different company than they normally use. Also, a portion of our funds are held in reserve for an additional 30-90 days (I can't recall).
Anyway, if what I described is what you want to do, yes its possible and legal. Just make sure you cover all your bases with good terms/policies. Tell BrainTree what you want to do and I'm sure they will help you out.
I found a page they have: http://www.braintreepaymentsolutions.com/blog/high-risk-mech...
And if you do roll it yourself get out of whatever business you are in and become an IPSP!
Try to find an IPSP that uses 'segregated merchant accounts', in other words find one that makes each of their customers responsible for their own chargebacks and credits instead of putting them all in the same bin.
The sign up process for such an IPSP will be a bit more involved but you can expect them to stick around instead of becoming the next IBill or DMR (both of which went down in flames taking a lot of their customers with them).
Another upside to having your own merchant account is that there is no 'holdback' other than the 14 days or so it takes VISA/whoever to do the deposit.
This is a very important difference because it will limit your exposure in case there is a problem, as well as make a material difference in your cash flow.
- edit, some more arguments against being your own aggregator:
1) you don't store peoples credit cards / expiries / cvv / other info of interest
2) this means you are less of a target for hackers
3) you are also less likely to be embarrassed by some employee walking out with all that sensitive info
4) you will not have to go through the auditing that comes with storing such information