A payment gateway doesn't handle the transferring of money, they only communicate with the interchange. Then, you go to a processor to settle the transaction gi

A payment gateway doesn't handle the transferring of money, they only communicate with the interchange. Then, you go to a processor to settle the transaction given a specific transaction ID for which you have received an authorization. There's a very important distinction: A gateway doesn't involve transferring money, while a processor does. There's a huge set of risks on the processor side, and being a "start-up" processor seems to be a non-starter (big banks usually perform this task). You also need to figure out what you have to lose to fraud. Gateways, it would seem, don't have that much to lose to fraud (they just handle the transaction, they don't settle it or transfer any kind of money). There's definitely a huge market for a better gateway (Authorize.net's APIs suck). Being a new PayPal, in my opinion, is going to be incredibly difficult, for many of the reasons mentioned in this thread. I'd start your journey by educating yourself on exactly how the credit card system works. This is a good place to start: http://authorize.net/resources/howitworksdiagram/ http://authorize.net/resources/howitworksdiagram/