Evolve Support. Full visibility into your merchants' payments experience. PayFacs are generally. When it comes to choosing between a PayFac and an ISO, the best option depends on your business's specific needs and preferences. Higher fees: a payment gateway only charges a fixed fee per transaction. That allows you to get certified by the respective gateway or. The PayFac model eliminates these issues as well. Cardknox Go (PayFac) – Become a Payment Facilitator, without the hassle;. Malaysia. Braintree became a payfac. PayFac® solutions, at your service Worldpay from FIS is your advocate for payment facilitator solutions. PayFac as a Force MultiplierWhat is a payment facilitator (payfac)? A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. Fortis manages everything for you – underwriting, fraud monitoring, funding, gateway reporting, and chargeback management. The best way to choose between a payfac and a payment processor is to consider your specific needs and requirements. Set up Wix Payments. Some more important things to consider are:Merchant Account. Classical payment aggregator model is more suitable when the merchant in question is either an. This means businesses only need Stripe to accept payments and deposit funds into their business bank account. Gain a higher return on your investment with experts that guide a more productive payments program. Pros and Cons of Becoming a Payfac. Payment facilitation (Payfac) is a service that allows businesses to accept payments from their customers in a variety of ways. facilitator is that the latter gives every merchant its own merchant ID within its system. Article September, 2023. A PayFac is the official merchant of record with the major card brands such as Visa and Mastercard and holds the relationship with the acquiring bank. Stripe, which is a tech-enabled evolution on the traditional payfac model, is a complete solution that combines the functionality of a merchant account and a gateway in one. A Payment Facilitator, or PayFac, is a sub-merchant account used by merchant service providers to provide payment processing services to their own clients, known as sub-merchants. Payfac and payfac-as-a-service are related but distinct concepts. 2. A payment processor serves as the technical arm of a merchant acquirer. In this hybrid payment facilitation model, the Payfac payment service provider becomes a Payfac with Sponsor Banks; they act as a master merchant account and are able to set up sub-accounts for merchants same-day. A payment processor handles the technical aspects of transaction processing and is connected to the banking system through the respective. The price is the same for all cards and digital wallets. The merchants are signed up under the payment aggregator MID. These systems will be for risk, onboarding, processing, and more. It is when a business is set up as a primary merchant account and provides payment processing to its sub-merchants. This includes underwriting, level 1 PCI compliance requirements,. 9% + 30¢. You own the payment experience and are responsible for building out your sub-merchant’s experience. Who Gets Involved in the PayFac Scene? There are five main elements which compose the payment facilitator landscape. Before you go to market as a PayFac, it is a good idea to set a goal to define success. an ISO. When this happens, your business can make and receive payments online using third-party payment networks (Venmo, PayPal, etc. The PayFac executes all the tasks a payment processor needs to onboard a client and gives the ISV a seamless experience. This crucial element underwrites and onboards all sub. What SaaS & E-commerce Companies Need to Know About Payment Facilitator Regulations, and what key regulations. Your application must include: the application form relevant to your type of firm. Let’s discuss the most common marketplaces and platforms. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Instead of each individual business needing to set up its own merchant account, a process that can be time-consuming, the payfac effectively “rents out” merchant account functionality under its. Wide range of functions. Cardknox is the leading, developer-friendly payment gateway integration provider for in-store, online, or mobile transactions – hassle-free. The main difference between the two entities is that one is a company that facilitates payments, and the other is a piece of software that integrates into a website or payment portal. It is when a business is set up as a primary merchant account and provides payment processing to its sub-merchants. Bank/ credit or debit company. Stripe, a tech-enabled evolution on the traditional payfac model, offers a complete solution that combines the functionality of a merchant account and a gateway all in one. I SO. A PayFac (payment facilitator) has a single account with. Instead of each individual business needing to set up its own merchant account, a process that can be time-consuming, the payfac effectively “rents out” merchant account functionality under its. This blog post explores some of the key differences between PayFac vs. Payment Facilitator. High transaction costs, complex fee structures, and the need for seamless payment solutions have become. The MoR is also the name that appears on the consumer’s credit card statement. The payment facilitators reach out to your business and help integrate a seamless payment gateway network technology. Stripe benefits vs merchant accounts. 1. A merchant acquirer or an acquiring bank is a bank that underwrites (and later funds) a merchant and (what is important) assumes the liability and risk, associated with credit card fraud and chargebacks. PayFac vs merchant of record vs master merchant vs sub-merchant. 1. Put our half century of payment expertise to work for you. This means businesses only need Stripe to accept payments and deposit funds into their business bank account. 6. merchant accounts. Stripe benefits vs merchant accounts. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. 00 Retains: $1. Operating on a platform that acts as a payfac means that there’s no need to work with an acquiring bank, payment gateway, and other service providers. Using payment facilitation, customers can be onboarded and verified quickly, with a faster underwriting process. Basically, a payment gateway is simply an online POS terminal. Visa vs. You own the payment experience and are responsible for building out your sub-merchant’s experience. 27. With white-label payfac services, geographical boundaries become less of a constraint. Instead of each individual business needing to set up its own merchant account, a process that can be time-consuming, the payfac effectively “rents out” merchant account functionality under its. However, it is difficult to determine whether this price is high or low without knowing what features the gateway offers. The first is the traditional PayFac solution. It is significantly less expensive compared to using a regular PayFac model. Just like some businesses choose to use a third-party HR firm or accountant,. Instead, in the PayFac model, a small business gets a submerchant account under the master merchant. At first it may seem that merchant on record and payment facilitator concepts are almost the same. Essentially, a payfac is a company that allows its customers to accept electronic payments using their platform. With companies like Stripe, Square and PayPal pioneering the payment facilitator or “PayFac” model, the era of Integrated Payments 2. For some ISOs and ISVs, a PayFac is the best path forward, but for others owning the payments process, end-to-end is a long way. The acquirer makes the payment facilitator’s check and dictates a variety of requirements. At first it may seem that merchant on record and payment facilitator concepts are almost the same. net; Merchant of RecordRenew payfac registration and licenses: Re-register as a payfac with card networks annually, and update or renew MTLs on the required cadence. Simplify funding, collection, conversion, and disbursements to drive borderless. This means that businesses only need Stripe to accept payments and deposit funds into their business bank account. ISOs. 6th April 2023 – Taunton, UK: Cardstream Group, which operates Europe’s fastest growing independent white label Payment Gateway, has announced the arrival of its significant new white label PayFac-as-a-Service to the market. Independent sales organizations are a key component of the overall payments ecosystem. If your platform needs to operate internationally and support sub-merchants in other regions, partnerships with local acquirers, gateways, and other service providers may be necessary. He drives the strategic direction of the company and supports. A relationship with an acquirer will provide much of what a Payfac needs to operate. Typically a payfac offers a broader suite of services compared to a payment aggregator. Major PayFac’s include PayPal and Square. North America’s leading healthcare organizations, revenue cycle management and accounts receivables management companies trust RevSpring to maximize their financial results. Payment gateway Payfacs provide a payment gateway, a software that acts as an intermediary between a business’s website and the payment processor. Here’s how Visa defines payment facilitators and sponsored merchants: “PayFac or merchant aggregator, a payment facilitator is a third party agent that. A Payment Facilitator, or PayFac, is a sub-merchant account used by merchant service providers to provide payment processing services to their own clients, known as sub-merchants. Difference #1: Merchant Accounts. With the exception of processors catering to high-risk industry, they also offer month-to-month billing. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. One classic example of a payment facilitator is Square. The payfac model is a framework that allows merchant-facing companies to. About 50 thousand years ago, several humanities co-existed on our planet. It provides a technology, allowing to authorize transactions and, potentially, receive transaction settlement information. A gateway may have standalone software which you connect to your processor(s). the supporting material required for PIs , EMIs or RAISPs (whichever applies to you) everything listed below. Find the right payment solution to meet your unique business needs, whether you're in the restaurant, retail, automotive, personal care, or professional services business. Under the payment facilitators, the merchants are provided with PayFac’s MID. merchant accounts. Talk to an expert. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Are you a business looking to expand your payment acceptance options? Have you heard of payment facilitators, also known as PayFacs? These modern payment solutions offer more flexible and cost-effective options. While both models allow businesses to accept payments, a payfac might provide additional services such as payment gateway integration, hardware for in-person payments, fraud protection, transaction reporting, and customer support. With Fortis’ PayFac solution, software developers and merchants can leverage award-winning APIs and leading payment technology to scale their business. PayFac vs ISO: 5 significant reasons why PayFac model prevails. Moreover, in a sense, PayFac model relieved acquirers from merchant management functions, which they delegated to PayFacs. Relationships of modern humans with other human. Powerful payment solutions for businesses of all sizes. Third-party payment providers If you're not using Shopify Payments and you want to accept credit cards, you can choose from over 100 credit card payment providers for your Shopify store. 0. the right payments technology partner. Global reach. PayFac-as-a-service delivers a competitive payment program with instant onboarding of merchants while creating a seamless customer experience. If your platform needs to operate internationally and support sub-merchants in other regions, partnerships with local acquirers, gateways, and other service providers may be necessary. PayFac vs ISO is an illustrative example of natural selection and adaptation in the fintech world. Also, some companies, such as United Thinkers, are offering special payment facilitator programs. Today we have CardConnect, the gateway Fiserv acquired. Choose your gateway, processor: By facilitating open, interoperable service models, PayFac 2. If you are looking for a simple, affordable, and secure payment processing solution, a payfac is a good option. The payment facilitators themselves: which are companies providing the necessary infrastructure and allows their sub-merchants to accept payments via credit card. Renew payfac registration and licenses: Re-register as a payfac with card networks annually, and update or renew MTLs on the required cadence. A Payment Facilitator or Payfac is a service provider for merchants. Firstly, a payment aggregator is a financial organization that offers. Payfac-as-a-service vs. Renew payfac registration and licenses: Re-register as a payfac with card networks annually, and update or renew MTLs on the required cadence. Payfac as a Service is the newest entrant on the Payfac scene. What is a payment facilitator (payfac)? A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. Stripe benefits vs. A payment gateway on the other hand is technology that verifies payments between merchants or vendors. The size and growth trajectory of your business play an important role. However, PayFac concept is more flexible. When you’re using PayFac as a service, there are two different solution types available. Payment facilitator model is suitable and effective in cases when the sub-merchant in question is a medium- or large-size business. Leading company listed on the TSE. Banks can and commonly do hold both roles. The core of their business is selling merchants payment services on behalf of payment processors. This was around the same time that NMI, the global payment platform, acquired IRIS. Aggregate processing means the funds from transactions are paid out to the PayFac first, who then distribute them to. And companies less visible to the everyday consumer, such as First Data, Worldpay, and Global Payments,. Payment Gateway Articles describing the key fintech news, innovative solutions, and various aspects of the industry. Unlike payfacs, ISOs set up individual merchant accounts for each business they service. Strategic investment combines Payfac with industry-leading payment security . Payment gateway Payfacs provide a payment gateway, a software that acts as an intermediary between a business’s website and the payment processor. When PayFac became a buzzword among software platforms and the many businesses trying to sell to them, the meaning of the word started to blur. + 0. A PSP, on the other hand, charges a variable fee in addition to the fixed fee. It also means that payment risk is moved from individual merchants to the PayFac, as they own the master merchant account. Renew payfac registration and licenses: Re-register as a payfac with card networks annually, and update or renew MTLs on the required cadence. In response to the advance of payment facilitation services, many companies started offering special programs for payment facilitators (UniPay Gateway technology by United Thinkers with its PayFac. The platform becomes, in essence, a payment facilitator (payfac). Step 3) Integrate with a payment gateway As with any merchant account, a PayFac’s master merchant account requires a payment gateway for transactions to flow through. Payment facilitation allows SaaS and digital platform businesses to onboard merchants, provide payment processing on their behalf, and handle the myriad complexities of managing transactions. using your provider’s built-in tokenization and gateway solution can greatly reduce your Payment Card Industry (PCI) scope. Payfac is the abbreviated term often used in the payments industry to describe a company that provides payment processing services to. You own the payment experience and are responsible for building out your sub-merchant’s experience. They allow future payment facilitator companies to make the transition process smooth and seamless. A Payfac provides PSP merchant accounts. Proven payment technology helps businesses pay and get paid so they can focus on what matters most. S. What is a payment facilitator (payfac)? A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. Contact us. SoftwareRight now, Stax offers three software plans for small businesses starting at $49 USD (Starter), and moving up to $89 USD (Growth), or $129 USD (Pro) per month. Integrated Payments 1. What is a payment facilitator (payfac)? A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. Partnering with white label PayFac gateway provides such a solution. It can also. Just to clarify the PayFac vs. Global expansion. Read and Know more about Payment Aggregators in this blog of Basic Points of Difference between the Payment Gateway and Payment Aggregator A PayFac will function as a payment facilitator in this general sense (though it's important to note the differences outlined above), and you can use a payment gateway to translate data between the PayFac and the credit card providers. Indeed, some prefer to focus on online payment gateway fees comparison. Instead of each individual business needing to set up its own merchant account, a process that can be time-consuming, the payfac effectively “rents out” merchant account functionality under its larger master merchant. net; Merchant of Record Renew payfac registration and licenses: Re-register as a payfac with card networks annually, and update or renew MTLs on the required cadence. In almost every case the Payments are sent to the Merchant directly from the PSP. They decided to add a $285 annual fee to their merchants starting in. e. as a national independent sales organization in 1989. At the very minimum, a new PayFac. Our restaurant PayFac and gateway offer all of the features you need to ensure your payments are secure and on time. In a PayFac model, however, the merchant will establish a business relationship with the payment facilitator, and it is the latter who will maintain the relationship with. This model gives your users the ability to seamlessly accept payments directly from your platform and allows you to own and monetize the payments experience while. Simplifying Payments Around the Globe. If you are attempting to become a fully registered PayFac yourself, or are considering various PayFac-in-a-Box options,. Also, many PSP’s/Payfac’s offer better integration with online businesses, as the payment gateway tends to be seamlessly bundled in. Visa Checkout + PayPal. This solution includes hosted payment pages; one-time, subscription, and one-click billing solutions; risk management; affiliate tools, and end-user customer support. A payfac is a platform that intermediates payments between consumers, payment operators (card operators, banks, PSPs, etc. Amazon Pay. Moreover, integrating a payfac solution into ISV’s software removes the need for a merchant to create a relationship outside of the software with acquiring banks or payment gateways. A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. Stripe, a tech-enabled evolution on the traditional payfac model, offers a complete solution that combines the functionality of a merchant account and a gateway all in one. Payfac-as-a-service vs. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. Cons. United States. This solution includes hosted payment pages; one-time, subscription, and one-click billing solutions; risk management; affiliate tools, and end-user customer support. It offers the. The speed at which a merchant can start processing payments with a PayFac is vastly different than the rate at which this could be done in the legacy ISO. These plans are on top of what you'll pay for Stax Pay. PayFac vs ISO. As a PayFac, Segpay handles the sub-merchant onboarding and provides a fully managed payment processing solution. What are the differences between payment facilitators and payment technology solutions, and how do you know. The difference is that a payment processor can provide a single gateway for multiple payment methods. They provide services that allow software platforms to accept credit and debit card payments and make it easier and faster for them to start accepting payments as they handle most of the work for you. Using payment facilitation, customers can be onboarded and verified quickly, with a faster underwriting process. This means businesses only need Stripe to accept payments and deposit funds into their business bank account. By adopting a white-label payment gateway, a payment facilitator can eliminate the need to develop their own payment system from the ground up and. Partnering with a PayFac vs becoming a PayFac with a technology partner. For Public Sector pricing, please contact us. In a similar manner, they offer. Indeed, value. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payfac-as-a-service vs. Seamless graduation to a full payment facilitator. Payment processing up and running in weeks. 70. Renew payfac registration and licenses: Re-register as a payfac with card networks annually, and update or renew MTLs on the required cadence. A payment facilitator, also known as a PayFac, is a sub-merchant account for a merchant service provider. PayFacs perform a wider range of tasks than ISOs. Stripe benefits vs. Thinking about the three-to-five-year strategic plan — geographics expansion, adjacent services and products, and even new end customers — can help sharpen the focus on PayFac options, she said. Small/Medium. The PayFac manages regulatory compliance, merchant onboarding, funding to bank accounts, and more on behalf of sub-merchants. More importantly, merchants that use those platforms do not need a direct relationship with a payment gateway or the acquiring bank. In this case, it’s straightforward to separate the two. The ISO acts as an intermediary between the merchant and the payment processor, taking care of merchant recruitment, sales, and ongoing merchant. Create sandbox. Region. What SaaS & E-commerce Companies Need to Know About Payment Facilitator Regulations, and what key regulations govern their operation. See our complete list of APIs. A merchant of record is an entity that accepts cardholders’ payments and assumes liability for processing of these payments on the merchant’s behalf. The gateway encrypts the information it received from the buyer and sends the transaction data to a card association. Typically a payfac offers a broader suite of services compared to a payment aggregator. 🌐 Simplifying Payments: PayFac vs. Stripe By The Numbers. ISO does not send the payments to the. We accept most major cards, including Visa, MasterCard, American Express, Discover, JCB, Diners Club International and UnionPay. One of the reasons for this phenomenon is that many companies (including former independent sales organizations (ISO)) find it more profitable to combine the functions of an online gateway provider and a merchant service provider (MSP). Let us take a quick look at them. A merchant can simply partner with a large provider and get all the gateway features it needs within a standardized offering. First popularized by firms like PayPal and Square, the payments facilitator (payfac) model is reshaping the payments ecosystem, allowing nonpayments companies that adopt it to participate more fully in the payments revenue stream. using your provider’s built. Payfac-as-a-service vs. Whether to become a Payment Aggregator or Payment Facilitator has far reaching implications for a SAAS application provider. Conclusion. PayFac and online marketplace models do not compete, they are just intended to serve slightly different purposes. 01274 649 893. Global expansion. Visa, Mastercard) around 2011 as a way for aggregators to provide more transparency into who their sub-merchants were. The PayFac model has gained popularity in recent years, as it allows businesses to simplify their payment processing and reduce costs, while also providing a better customer experience. What is a payment facilitator (payfac)? A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. The differences are subtle, but important. Further, by integrating payments functionality into a software. They typically work with a variety of acquiring banks, using those relationships to "resell" merchant accounts to merchants. At Revision Legal, we protect businesses that thrive online, and understand the connections between law, technology, and business. 7. That said, the PayFac is. Payment method Payment method fee. Put simply, the acquiring bank is the bank on the merchant end of the transaction, and the issuing bank is the cardholder or consumer’s bank. FinTech innovators love the payment facilitator (PayFac), a shift that WePay co-founder Rich Aberman outlined in Episode 1 of the Payment Facilitators series with Karen Webster, CEO of PYMNTS. In short, Payment Facilitation is an operating model that affects the acquiring side of the payment ecosystem. Online, in-person, or on-the-go, it's easy to accept credit or debit payments on our devices at anytime with Canada's trusted payment processor. This means providing. The road to becoming a payments facilitator, according to WePay. If your platform needs to operate internationally and support sub-merchants in other regions, partnerships with local acquirers, gateways, and other service providers may be necessary. For their part, FIS reported net earnings of $4. A major difference between PayFacs and ISOs is how funding is handled. PayFac has its own secure gateway, and it provides easy integration with major e-commerce shopping carts. These include SaaS providers, investment firms, franchise owners, online marketplaces, and others. Nick Starai is chief strategy officer and one of the co-founders of NMI who played an integral role in the formation and launch of the NMI payments platform in 2001. ISOs never directly touch a merchant’s money as the money will flow directly from the payment processor to the merchant’s merchant. While both models allow businesses to accept payments, a payfac might provide additional services such as payment gateway integration, hardware for in-person payments, fraud protection, transaction reporting, and customer support. A payment processor executes the money transfer by exchanging data between the merchant, the issuing bank and the acquiring bank. Its FACe gateway platform accelerates time to market for new payfacs. In the current downturn, said Mielke, the PayFac or ISV that is diversified will be better positioned to weather the storm. What is a payment facilitator (payfac)? A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. A closer look at the economics from each $1 of payment volume. At the same time, more companies are implementing PayFac model and establishing PayFac payment gateway partnerships. Both offer ways for businesses to bring payments in-house, but the similarities. Send payouts to 190+ markets with real-time payments infrastructure for on-demand business. For example, by shifting from the ISO model to become a payfac, Lightspeed expects to see a 2. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Payment Facilitators vs. What is a payment facilitator (payfac)? A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. A payment facilitator, commonly known as a payfac, occupies one of the central roles within the payment processing ecosystem, yet it causes significant confusion. Payment gateway Payfacs provide a payment gateway, a software that acts as an intermediary between a business’s website and the payment processor. The best Stripe competitors combine transparency, low processing fees, and excellent support for eCommerce. A Payment Facilitator, commonly known as, a Payfac, has one master merchant account under which all the merchants join as sub-merchants. For SaaS providers, this gives them an appealing way to attract more customers. What is a PayFac? Benefits & Reasons Why Businesses Need One in 2023. Modern PayFacs find it more profitable to integrate with just one processor/gateway and provide merchant processing services (onboarding, chargeback handling, reconciliation,. Connection timeout usually occurs within 5 seconds. Payment facilitator (payfac) A payment facilitator is an entity that is authorized to onboard merchants to an acquirer's platform and receive settlement funds for them on behalf of an acquirer. Freedom to grow on your own terms. It then needs to integrate payment gateways to enable online. Step 4) Build out an effective technology stack. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Additionally, the overall integration was a seamless process, which made it easier for us to continue focusing on our product and customers. 1. Under the PayFac model, each client is assigned a sub-merchant ID. 650 Pre-Registered Entrants. A gateway may have standalone software which you connect to your processor(s). The full-function platform has been designed to deliver Acquirers with a comprehensive Third Party Payment Facilitator programme, as well as a. Both PayFacs and ISO’s (independent sales organizations) act as intermediaries between merchants and payment processors . The core of their business is selling merchants payment services on behalf of payment processors. Thanks to its flexibility and profitability, PayFac model seems to perfectly adjust to the present-day market requirements. Popular 3rd-party merchant aggregators include: PayPal. Both offer ways for businesses to bring payments in-house, but the similarities. We promised a payfac podcast so you’re getting a payfac podcast. Payfac and payfac-as-a-service are related but distinct concepts. The payment processor also typically provides the credit card machines and other equipment needed to accept credit card payments. A payment processoris a company that handles card transactions for a merchant, acting. Global expansion. To put it simply, a PayFac is a service provider specifically for merchants. Global expansion. In the PayFac model, banks that monitor PayFacs are called Acquiring Banks. This means businesses only need Stripe to accept payments and deposit funds into their business bank account. An ISV can choose to become a payment facilitator and take charge of the payment experience. Complete ownership and control of your payments program. Just like some businesses choose to use a third-party HR firm or accountant, some. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. This made them more viable and attractive option than traditional ISOs. With Stripe's payfac solution, unlock SaaS revenue, turn payments into a profit center, and offer new financial services through your software platform. The PayFac model has gained popularity in recent years, as it allows businesses to simplify their payment processing and reduce costs, while also providing a better customer experience. 3. Both offer ways for businesses to bring payments in-house, but the similarities. Similar to PayPal or Square, merchants don’t get their own unique. This means that a SaaS platform can accept payments on behalf of its users. Onboarding process responsible for moving the client’s money. com. Contact our Internet Attorneys with the form on this page or call us at 855-473-8474. Instead of each individual business needing to set up its own merchant account, a process that can be time-consuming, the payfac effectively “rents out” merchant account functionality under its. Payroc LLC, together with its wholly-owned affiliate Payroc Processing Systems, LLC, is a registered Visa third party processor (TPP), Mastercard third party servicer (TPSV), payment facilitator. What is a payment facilitator? A payment facilitator, also known as a “payfac” or payment aggregator, is a payment model that has grown tremendously over the past few years. The concept is continuing to evolve According to analysis from GlobalData, the worldwide market for digital payments will reach nearly $2,500 trillion in value in 2023, expanding at a compound annual growth rate (CAGR) of 14. It’s used to provide payment processing services to their own merchant clients. Offering similar services to popular payment processing tools like Stripe and PayPal, PayFac is a third-party merchant service provider. becoming a payfac. As PSPs must pay acquirers and banks and still have some profit margin, the fees can be higher than what can be directly negotiated with banks and acquirers. Whatever your industry, scale or ambition, we’ll help you configure the ideal solution for you. This crucial element underwrites and onboards all sub-merchants. How They Work PayFacs essentially build a payment infrastructure from scratch. It also needs a connection to a platform to process its submerchants’ transactions. Processors follow the standards and regulations organised by credit card associations. On-the-go payments. Onboarding processWhat is a payfac? A payfac or PF, short for payment facilitator, makes it possible for you to accept payments from customers in a variety of ways, including card payments, direct debits, local payment methods, and alternative payment methods like mobile and digital wallets including Apple Pay and Google Pay. While both models allow businesses to accept payments, a payfac might provide additional services such as payment gateway integration, hardware for in-person payments, fraud protection, transaction reporting and customer support. However, PayFac concept is more flexible. e. The ISO acts as an intermediary between the merchant and the payment processor, taking care of merchant recruitment, sales, and. Processors will act as a gateway setting their clients up with an individual merchant account while the merchant will still have a direct relationship with the acquiring bank. Global expansion. One of the key differences between payment aggregators and payment facilitators is the size of sub-merchants they are servicing. Thus, the main difference between these two key elements of online payment processing is that the processor is a service provider facilitating the transaction, while the gateway is the communication channel responsible for secure data transmission. If your platform needs to operate internationally and support sub-merchants in other regions, partnerships with local acquirers, gateways, and other service providers may be necessary. PayFac vs. This means that businesses only need Stripe to accept payments and deposit funds into their business bank account. Payfac solutions can be a critical source of revenue generation, allowing ISVs to differentiate their product and service offerings in a crowded space. Our suite of scalable issuer solutions provides the next generation platform for origination, processing and risk management. Typically a payfac offers a broader suite of services compared to a payment aggregator. The gateway handles the tokenization process, which hides the card information while it’s in transit; a very important piece of the data security in payments. Typically a payfac offers a broader suite of services compared to a payment aggregator. Suitability Payment aggregator: Particularly suitable for small and medium-sized businesses that seek a simplified onboarding process and cost-effective payment. Payment facilitator model is suitable and effective in cases when the sub-merchant in question is a medium- or large-size business. 01. Global expansion. A PayFac is a processing service provider for ecommerce merchants. It is when a business is set up as a primary merchant account and provides payment processing to its sub-merchants. Principal vs. Stripe benefits vs. A Payment Facilitator or PayFac simplifies merchant account enrollment which allows smaller companies to quickly gain the upper hand. Stripe, which is a tech-enabled evolution on the traditional payfac model, is a complete solution that combines the functionality of a merchant account and a gateway in one.