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Old 01-17-2006, 11:53 PM   #1 (permalink)
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Starting a credit card company? (long-shot, but researching)

hey

OK, stay with me, I'm only researching the idea... and I'm trying to explain this without giving away the idea...

Had this idea for a long time...

The idea isn't to directly start a credit card company, but the service/product requires the use of the credit card system and of a credit card (no, not simple credit card purchasing). The idea will basically need access to the credit card system (i.e. those little machines which stores use).

OK so to access the credit card system there were/are 3 options:

1) Setup a deal with a bank (who own and lease the credit card machines)
2) Setup a deal with some other company which have their own credit card
3) Startup a new credit card company

#1 wouldn't won't work - since other banks will charge additional fees etc etc

#2 could work - although it would involve basically approaching the company with our idea and somehow managing to come out of negotiations A) with a decent deal such as a % of profits or something, and B) without them simply deciding they'll do the idea without us (i.e. steal it).

We actually had a company in mind who have their own credit card which we could probably approach.

#3 Would cost a hell of a lot of money, be risky, involve lots of work... but if it did work we could direct the company and reap all the rewards

The idea will involve a lot of work and administration. The industry it's based in is a massive industry which is growing each day. There are a few companies which are making a killing doing the same type of idea, but they aren't based it on a credit card.


So I'm wondering:

1) How much would it cost to startup a credit card?
2) Would a VC fund such a project?
3) Where would be the best place to start?
4) Any other ideas on how to launch a credit card?
5) Any other comments and constructive criticism you can think of.

cheers
nathan

ps, CONSTRUCTIVE CRITICISM ONLY PLEASE... I realise this is a very out-there idea which involves a mass of capital
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Last edited by nado; 01-18-2006 at 12:03 AM.
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Old 01-18-2006, 12:02 AM   #2 (permalink)
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Do you mean startup a new credit card company as in "Visa", "MasterCard", etc.? That seems like it would be pretty tough and take lots of money. The majority of people already have credit cards, and to market a whole new company would cost tens of millions. VC's would probably approach with extreme caution. You would need one hell of a management team to lift it off - probably with people who were already high up in the other credit card companies.
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Old 01-18-2006, 12:05 AM   #3 (permalink)
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No, no, no ... just a credit card.

As in your bank credit card or whatever (i.e. using either a visa or mastercard).

Like a Virgin, or Harvey Norman etc credit card
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Last edited by nado; 01-18-2006 at 12:19 AM.
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Old 01-18-2006, 01:43 AM   #4 (permalink)
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I'm giving you the same feed back as any financeer would.

I'm thick and I don't understand what are you trying to do. What problem are you solving?

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Old 01-18-2006, 01:52 AM   #5 (permalink)
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Quote:
Originally Posted by akula
I'm giving you the same feed back as any financeer would.

I'm thick and I don't understand what are you trying to do. What problem are you solving?

Well it's difficult to explain without giving it away too much.

It's a credit card which has added benefits which pretty much everyone will be interested in. So I'm trying to find out what it takes in terms of money, knowledge etc to startup a credit card.
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Old 01-18-2006, 05:57 AM   #6 (permalink)
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Quote:
Originally Posted by nado
Well it's difficult to explain without giving it away too much.

It's a credit card which has added benefits which pretty much everyone will be interested in. So I'm trying to find out what it takes in terms of money, knowledge etc to startup a credit card.
Strange how people always think about their product.

Credit card companies and stores which have credit cards have been getting together since the beginning of days. There's no need for a middleman (you) to make that happen.

I agree with akula, your post/idea needs to be more coherent befor you solicit feedback.
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Old 01-18-2006, 05:53 PM   #7 (permalink)
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yep I know, it's just a little hard to explain what I'm trying to do without completely giving away the idea.

I probably should have realised that no one on these forums would have started their own credit card.

Any advice on where I should go/start?

Who do I need to 'know'?
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Old 01-18-2006, 08:21 PM   #8 (permalink)
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Quote:
Originally Posted by nado
yep I know, it's just a little hard to explain what I'm trying to do without completely giving away the idea.

I probably should have realised that no one on these forums would have started their own credit card.

Any advice on where I should go/start?

Who do I need to 'know'?
nado, believe me - everyone wants to help but you are not making it very easy to help you.

what you are doing is the wrong way to to go about building companies.

you need to spell out a vision, it doesn't have to detail the unique selling proposition, but it does have to describe the kind of problem you are solving.

to be more exact: paranoia on the part of entrepreneurs is the first sign of inexperience. fail to correct this flaw in your decision making and your startups aren't gonna get started.

if you weren't a cool guy, I'd tell you that you're being a person who is experiencing deficiency in understanding of fundamentals (a fucken idiot). your startup needs you, it needs you to tell everybody who wants to hear about it, it wants to be born and it wants to do great things. by locking it up and restricting it's development - you are being a shitty parent, and what you are gonna get is infant mortality.

Disclaimer: Please note that my analysis of your decision making capacities is based on empirical evidence. You need to change how you make decisions. Going stealth mode, at your age, in your situation, is a mistake.

Stealth mode, is a concept rooted in corporate R&D. Stealth mode, as a concept, was never developed by entrepreneurs who used it to have more successful track records. Likewise, the dotbombs that used it 5 years ago, are all long gone - and their circumstances where different to yours - they were sitting on millions in cash and could quickly buy market share. Alas, after millions were blown stealth modes, there was no evidence that stealth correlates with more market share. Perhaps the only reason to use it, is to build buzz - but to do that you need to be Marc Andersen (founder of Netscape) doing ning.com

With your circumstances, there is no value to be gained by keeping your mouth shut - it just looks stupid. You need to correct this by shouting your business plan off the rooftops, hoping that at least somebody has some kind of passing interest and that they can at least give you some hope that you will survive.


Last edited by akula; 01-18-2006 at 08:55 PM.
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Old 01-18-2006, 08:42 PM   #9 (permalink)
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Nado,

I will agree with Akula.

Only the person who holds the vision will be the one to take it to the next step, and that would be you. I can honestly say that no one on this site will steal your idea... For starters, it would take way too much capital for someone to just "take"... Secondly (and again), you are the one that holds the determination to get it done.

If you do give us more of an idea what the idea is about, I am sure someone might be of more help.
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Old 01-19-2006, 10:47 AM   #10 (permalink)
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Possible 4th option?

Hi Nado,

Just reading through your posts and i have at least a possible starting point for you....

www.NCSReporting.com

Basically this business allows you to sign up people for credit cards under your own account. While it is not exactly what you are looking for it is a thought to at least get to started on researching this out further. Let me know if you've got any questions. Cheers
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