In this episode, hosts Kevin and Elaina Smith roll up their sleeves to tackle one of the biggest milestones in the payments world: securing a direct processing agreement and an acquiring bank sponsorship.

Whether you’re pondering the shift from sales-driven retail to a more wholesale, operational model—or you’re just curious about what it really takes to get your own BIN and board merchants directly—this conversation takes you through the practical realities, financial implications, and operational readiness you’ll need to make it happen. You’ll get firsthand insights on when to consider going direct, common misconceptions about profitability, and the critical elements banks look for before handing over the keys.

Plus, Kevin and Elaina don’t shy away from the fine print. They break down the structure of processing agreements, minimums, reserve requirements, and those sneaky extra fees—from kilobyte charges to compliance reporting. You’ll also hear their candid takes on building your underwriting, risk, and accounting teams, and why operational expertise is make-or-break for this next phase of your business.

If you’ve ever considered the leap into direct processing—or want to understand why so many ISOs struggle with the transition—this episode is packed with actionable advice, cautionary tales, and a few rants about the realities behind the numbers.

On this episode of Payments Ground Game, we take a deep dive into the complicated, often misunderstood world of payment processing. Whether you’re new to the industry or a seasoned pro, you’ll appreciate their clear breakdown of what actually happens on the front end and back end of processing—from real-time authorizations to the nitty-gritty of batch settlement and clearing.

Elaina and Kevin use easy-to-understand analogies (remember Ma Bell and those old-school telephones?) to demystify how terminals, gateways, and virtual terminals communicate with processors, and why product certification to the front end is so critical. They’ll tackle the important distinctions between credit and PIN debit transactions, why reliability isn’t as simple as you think, and the real reasons those occasional outages seem to strike at the worst times.

On the back-end, they’ll explain why timing—like batching out at just the right moment—can make a big difference in your interchange rates, and what can go wrong if you or your processor slip up. Expect honest stories and industry insights about rejected transactions, interchange reclassifications, and the challenges of maintaining accuracy in a fast-changing payments landscape.

So, if you’ve ever wondered what “front end” and “back end” really mean for your business—and how your bottom line can be affected by everything from cut times to product certification—this episode will give you the tactical, real-world knowledge you need to scale your payments operation effectively.

In this episode, hosts Kevin & Elaina Smith are joined by special guest, Ken Musante, Founder and President of Napa Payments and Consulting. We explore the necessary relationship between acquiring sponsor banks and card payment processors, as well as how sponsor banks and independent sales organizations (ISOs) share different levels of responsibility and risk for the merchants they serve. We cover the game-changing role of automated tools in risk monitoring and underwriting as well as the vital importance of operational compatibility over mere cost in bank relationships. We also cover the kinds of things that can go wrong in sponsor bank relationships, how it affects the entities that do business with them, and what lessons can be gleaned from recent events.

Contact Ken Musante by reaching out to him on LinkedIn or visiting his website, Napa Payments and Consulting.