How to provide merchant services?

**hockey97** · 06-26-2009 12:25 PM

Hi, I am just wondering how are companies able to provide merchant services.

I thought you need to be a banking institution in order to provide such services.

I just notice godaddy has such services. I was puzzled because I done research and even asked my professors in college since I am going for a business degree. From what I was told you need to apply or register your business as a banking institution. I been looking around trying to find out if godaddy is a banking institution but never found anything.

So I thought why not ask here. I notice paypal, godaddy and many other online business that are not financial institutions. Well I know paypal is but the other websites I seen is not a financial institution. I would now assumed they are a middle man type people. Where they are buying services from financial institutions to provide such services to customers.

So I just want to know if I am right or not. If anyone knows for sure or can give me a opinion on how this works that would be ok.

I am still looking into it.

**feint** · 06-26-2009 05:43 PM

GoDaddy can provide merchant services because they do it through Chase Bank. They are just a reseller.

PayPal is a bit different. They don't actually offer credit card processing in the same and payment gateway and merchant account would.