I am not in disagreement with you in relation to merchant screening. However when you act as a payment processor at the end of the day the card issuer looks at you for the fraud and chargeback processing and they are only interested in one thing - figures. If your figures go the wrong direction (regardless of how you decide to look at the risk and which way you go about reducing same) they will be quick in sanctioning.
The point I was trying to make is that it is one thing processing payments as a merchant for your customers but a completely different cattle of fish acting as a payment processor. This is a highly regulated area where compliance is key and Loss prevention, Risk Management, Fraud Prevention will have to be one of your core areas. In a CnP Environment you never see real money - its all just numbers in a computer or a sheet but at the end of the day for somebody out there those numbers are real money. As soon as you process transactions on behalf of a business its not the merchant thats responsible its you the payment processor whos responsible to ensure your merchants follow the rules.
In terms of those fees - just a word of caution, we are not talking about pocket money here. Those fees don't hurt the business they dig a hole in it and have put more then one payment processor out of business over the years.
Dont get me wrong - I am not here to jump on you. Not at all. But I am giving you advice what you and your partners are facing with this venture and the grim realities of what happens when the business doesnt comply with the rules of the card issuers and of course the regulatory bodies.
I hope you can see all this as constructive as it is meant to be.