If you are thinking about launching a payment service in In Central Asia, one of the first and key issues you will face is the choice of a business model. I'm not talking about marketing or sales channels, but about the fundamental thing: how exactly will your work with customer money work?

In recent years, my team has advised and launched dozens of projects, from small PSPs to large infrastructure solutions in Europe and Central Asia. And almost everyone started with this choice. It affects everything: licensing, IT infrastructure, product strategy, partners, and your responsibility.

There are two basic ways:

The processing company model is that you provide a technical platform, but you don't touch the money. The seller receives the payment directly to his bank account.

The payment aggregator model is that you accept money into your accounts, process it, and then transfer it to the seller. This gives you more flexibility, but it also requires a license.

If you're just entering the market, you don't have a license, and you don 't have a strong compliance team, start with this model. This is a reasonable step for the first stage.

• You don't need a payment organization license.

• Faster market entry, less legal risks

• You can focus on technology and customer onboarding.

You will have to consider:

• Dependence on banks (in terms of deadlines, fees, requirements)
• Restrictions on tariffs and payments

Many PSPs in the region have been successfully operating in this format for years. Some are moving on to the next stage.

Here you manage the cash flows yourself. You connect sellers, charge an acquisition fee, and set your own rules. But for this you need:

• get a license from a payment organization,
• build KYC and AML processes,
• ensure compliance with the requirements of the regulator.

Advantages:

• Flexible pricing and onboarding
• The possibility of accelerated scaling
• Own control over the customer base

The realities:

• License = time, capital, lawyers, reporting
• Regular inspections and controls
• Responsibility for every step in the payment chain

This model is not suitable for everyone. But if you have ambitions and resources, it opens up great opportunities.

If you are just starting out, start with the processing company model. This will allow you to test the hypothesis faster, find the first cases, and understand the needs of customers.

And then you will see for yourself when the time comes for the next step. This is how most of our clients work: first, renting a platform and technical service, then a license and switching to a full-fledged ecosystem, without migration, without changing infrastructure. We have clients who work this way: in some countries as processors, in others as licensed aggregators.

The original article is posted on the blog on the website ecomcharge.kz

This article is part of a series of practical materials about launching a payment service for a startup. My name is Oksana Mikhailovskaya, I am the co-founder and marketing director of eComCharge. Since 2011, we have been working with PSPs all over the world and we know where to really start.

Read Part 1. How to launch your own online payment acceptance service in Central Asia.