Ask HN: Starting FinTech/becoming a card authority in Australia | Hacker News Reader

Ask HN: Starting FinTech/becoming a card authority in Australia

5 pointsdrekipus7 comments

I thought I would ask here because I can't seem to find the information I'm looking for. Australia is going through a "credit card fee debacle" at the moment so search is cluttered.

I want to investigate how to become a card issuer/authority without becoming a bank in Australia.

The purpose is simple: I give my customer a "credit card" to use for approved merchants. They can go use that credit card for any amount. The list of approved merchants will vary by customer.

I don't know where I can find information on doing this in Australia, and I also want to find information on how far I can get without venture capital.

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Becoming a card issuer in Australia requires overcoming numerous regulatory hurdles. ARPA and ACCC are two government bodies you need to be familiar with.

I was involved in setting up a new insurance company in the late 1980s and even then you needed well connected investors as well as a top law firm to smooth the way. Credit legislation has become even more onerous since then.

Perhaps a feasible path would be to co-brand your card with Visa or MasterCard. That is how the major department stores are implementing their store cards. Both David Jones and Myer have stopped issuing their own store cards for the reasons mentioned above.

Thanks.

I was thinking that the card is "a MasterCard" (with my branding, etc) - but the payments just come to me for authorization.

IE: I only really want to deal with step 4 of this: to "yay/nay" payments.

https://stripe.com/au/resources/more/card-authorization-expl...

MasterCard et al can deal with all the rest, as much as possible

I want to stray away from being called "a bank" though, because I am not a deposit holding facility.

Not to mention the AUSTRAC AML/CTF hurdles as well.

What sort of hurdles are we talking about here?

Your unknown unknowns will bite you, very hard. That's why you need competent legal advice. DIY is extremely risky in this space.

Indeed, just find a local/regional issuer that can issue AUD cards with some kind of relayed authorization feature. This is also called co-branding. Then you don’t need any financial license yourself typically.

Does Australia still have that insane "must have at least $10M in assets" rule for certain financial services?

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