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- 1). Apply for a a money transmitter license as a money services business (MSB). Both banks and MSBs issue prepaid credit cards. While banks are regulated by the Federal Reserve and must be a member of the Federal Deposit Insurance Corporation, MSBs are regulated by states. Check with the appropriate department at your state that issues money transmitter license for money service businesses.
- 2). Register with the Financial Crime Enforcement Network (FinCEN) at the Department of Treasury. Money service business must register with the FinCEN. The registration deadline is 180 days after an MSB has been established with a license obtained. The registration form, Registration of Money Service Business or FinCEN Form 107 must be signed by the owner and renewed every two years.
- 3). Participate in an electronic-payments network. Credit card transactions are processed by various electronic-payments networks, such as the mostly used Visa and MaterCard. The networks are the gateway between card issuers and card processors that eventually transmit funds from customers' accounts to those of merchants after card purchases are made. Apply with the networks for endorsement of issuing prepaid cards. Or alternatively, join in an affiliate program with an existing card issuer if your business wishes to focus more on attaining a customer base.
- 4). Set up customer account management system. Have a website up running for both initial card application and the ongoing account management. The starting setup work also includes preparing a cardholder agreement and stipulating service fees. As most customers who use prepaid credit cards likely do not have a bank account, depositing funds cannot be made online by electronic funds transfer and so the company must choose physical locations to handle in-person deposits.
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