The white-label payment facilitator model is less complex and costly, but it does not provide the same level. Under the PayFac model, software platforms become the master merchant account. Provision of digital audio and video content streaming services to. There is a true PayFac that assumes all those compliance and regulatory and infrastructure costs. This article illustrates how adapting the payfac model can boost merchant services. For this reason, PayFacs are well-positioned for substantial growth with the significant trend toward digital channels. Wide range of functions. PayFac® solutions, at your service Worldpay from FIS is your advocate for payment facilitator solutions. If the intermediary entity, which funds the sub-merchants, uses different MID for each merchant, it is called a payment facilitator. The tool approves or declines the application is real-time. Standard. 0 era, where every small business was required to apply with a bank (often through hard-copy applications) and be approved for their own merchant account,. Revenue cycle 101: PayFacs – A complete guide to payment facilitators vs. While ISOs and payfacs both facilitate electronic payments for businesses, they cater to different needs. ,), a PayFac must create an account with a sponsor bank. A white-label payfac, also known as payfac-as-a-service, is a business model in which a company uses a third-party payfac platform to offer payment processing services under its own brand name. Historically, bringing embedded payments in-house by becoming a payfac has been a heavy-lift way for platforms to. So naturally, any company considering the option needs to make sure the investment they’ll make in the Payfac model makes sense financially. We’ll help you bring your payfac experience to market fast, with operational readiness and tools for your payments strategy. 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. Below are examples of benefits afforded to each participant. By 2012 when Toast launched, the payment facilitator (Payfac) model was flourishing and this allowed Toast to redefine the POS business model and literally alter the competitive playing field. In the PayFac model, banks that monitor PayFacs are called Acquiring Banks. ISOs are also in charge of setting up merchant accounts for merchants through their banking relationships. Payment facilitation or PayFac-as-a-Service is your best bet if your business operates in a high-risk industry. The payment facilitator model has become especially popular with platforms, marketplaces and SaaS businesses who serve smaller businesses that need to process payments. A white-label payfac, also known as payfac-as-a-service, is a business model in which a company uses a third-party payfac platform to offer payment processing services under its own brand name. Embedding financial services can grow revenue per customer 2–5x higher than the traditional model. The PayFac model emerged in the early 2000s, pioneered by payment facilitator US companies such as PayPal and Stripe, which offered a simple and streamlined payment processing experience. I/C Plus 0. The bank receives data and money from the card networks and passes them on to PayFac. Acquirers •educes the cost of signing and supporting long-tail merchants, or those with specialized needs. In this example, the PayFac model makes payment acceptance more seamless and provides the home chefs (or sub-merchants), with the ability to get paid via the payment processor the PayFac uses. PayFac as a Service: PayFac as a Service is a model that allows SaaS companies to take advantage of all the benefits of being a PayFac without the upfront investment and ongoing overhead. This level of insight mitigates much. Payment Facilitator. A critical feature for any PayFac platform to have a successful integration and onboarding is a full suite of documentation, training, and integration assistance for sub-merchants. #PayFac #PaymentFacilitator #ThoughtLeadership #TSG #Square #Stripe #Toast Like The payfac model is a logical starting point for software providers seeking to expand into broader financial services, creating a type of fintech flywheel. eBay sold PayPal. You may likely serve a diverse array of customers, from large enterprises to individuals on “freemium” plans. 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. Leverage our PayFac® as a Service model today! Turnkey solution — deploy ASAP No regulatory burden Minimal cost and risk Get Payrix Pro. Harness the advantages of being a full payment facilitator, without the development lift of building out the infrastructure. The PayFac model brings SaaS companies the incredible benefits of payment monetization along with merchant-friendly payment features that increase client satisfaction. ISOs offer greater control and potential cost savings for larger businesses with high transaction volumes, while payfacs provide a simpler, all-in-one solution for smaller. In a Payfac model, the merchant operates under a sub-merchant ID meaning that all payments are distributed to the Payfacs master merchant account before being paid out to the merchant. This means businesses only need Stripe to accept payments and deposit funds into their business bank account. For example, some acquirers – often those with well-developed payment facilitator programs and deeper experience with the Payfac model – may be more comfortable leaving many decisions and day-to-day operations to the Payfac as long as they adhere to the requirements. In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance, and risk management. The PayFac model emerged in the early 2000s, pioneered by payment facilitator US companies such as PayPal and Stripe, which offered a simple and streamlined payment processing experience. Transaction Monitoring. Stripe offers numerous benefits for businesses. Even if you have your own payment gateway, processing. The need for split payments, naturally, arises when the process of purchase of products or services involves some entities beside the seller and the buyer. In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance and risk management. There are a lot of benefits to adding payments and financial services to a platform or marketplace. 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. Stripe’s payfac solution can help differentiate your platform in. One of the main reasons so many people think. Stripe offers numerous benefits for businesses. Read More+ Profiles on Leadership: ETA Celebrates Black History Month & 2023 Forty Under 40. They may have the payment processor as a party, but this is not a necessary requirement. Historically, bringing embedded payments in-house by becoming a payfac has been a heavy-lift way for platforms to. Understand the Payment Facilitator model. ISVs solve business problems for the merchants they serve by developing software for streamlining processes and extending customer capabilities. Payments Facilitators (PayFacs) are one of the hottest things in payments. Once you have completed steps 1-3, you should have a good idea of how you want to process payments and what type of. The latter offers less control, but is far cheaper – something smaller and medium sized businesses need. The payment facilitator model was created as a way of streamlining business’ processes in a way that would allow them to accept electronic. For now, it seems that PayFacs have carved. With this. Others may take a more hands-on approach. Fully managed payment operations, risk, and. This is the most popular option among businesses wanting to accept crypto payments online and at POS. A white-label payfac, also known as payfac-as-a-service, is a business model in which a company uses a third-party payfac platform to offer payment processing services under its own brand name. ,), a PayFac must create an account with a sponsor bank. In the Managed PayFac model, you are in essence a sub Payfac. Instant merchant underwriting and onboarding. Evolve as you scale. Also, some companies, such as United Thinkers, are offering special payment facilitator programs. You may contract a payment facilitation agreement with any of Hips partner acquirers, or you can use Hips as. In the full blown PayFac model your business is the master merchant and assume all payment related risk. The main benefit of becoming a PayFac is recurring revenue. In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance, and risk management. Each location can be onboarded as an individual sub-merchant under the PayFac’s master merchant account. ” Global, which also supports financial institutions in card issuing, saw that part of its business record $505 million in adjusted net revenue for the quarter. In a payfac model, the business owns the payment processing systems and has direct control, while in a payfac-as-a-service model, the third-party provider owns and manages the payment processing systems on behalf of the business. In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance, and risk management. Frequently Asked Questions. The PayFac model was defined by the idea that one company could register as a “Master Merchant,” with an unlimited number of sub merchants underwritten beneath them. In contrast, the PayFac-as-a-Service model involves a third-party provider managing payment processing systems on a business’s behalf. The advantages of the Payfac model, beyond the search for performance. 4. This eliminates the need for individual merchant accounts and allows businesses to start accepting payments quickly. If a SaaS or POS platform provider wants to become a payment facilitator but is not ready for significant upfront costs and for. While ISOs and payfacs both facilitate electronic payments for businesses, they cater to different needs. Sub-merchants operating under a PayFac do not have their own MIDs, and all transactions are processed through the facilitator’s master merchant account. The payment facilitator model has a positive impact on all key stakeholders in the payment . However, for others, a managed payfac program is a better alternative, delivering the perks without the heavy lift. Traditional payfac solutions are limited to online card payments only. So, if you are using PayFac, at some stage, you will probably decide to transition to merchant of record. Payfacs generally white-label the services of a preferred strategic payment partner and more deeply integrate this partner to control and customize the customer onboarding, pricing and contracting, payment. Stripe offers numerous benefits for businesses compared to. Process all major card brands and payment methods, including ACH, contactless. A Complete mPOS Solution to Easily Accept Payments. With the payment facilitator or PayFac model, every user gets a sub-merchant ID. At first it may seem that merchant on record and payment facilitator concepts are almost the same. A payment facilitator (or payfac) is the owner of a master merchant identification number who registers merchants as sub-merchants and enables their payment acceptance. The core payfac digital ledger, with its pay-in / pay-out functionality, is foundational for other financial services such as merchant cash advance, lending, BNPL, card issuing, and spend. PayFac Benefits. These software companies take on greater risk but pocket a much larger portion of the processing revenues. A PayFac is a merchant services model in which an organization opens a processing account with an acquiring bank so that it can serve a myriad of merchant clients. NMI CEO Roy Banks gives Karen Webster the inside skinny on a model that gave birth to a new way to innovate payments, at. The PayFac model is actually quite straightforward and, in practical terms, it mirrors the software as a service (SaaS) model that so many software providers operate. The settlement of funds is also typically handled with stringent oversight in the payfac model. To become a PayFac in the UK, a business must register with the Financial Conduct Authority (FCA), which regulates payment services in the country. As digital payments began to surge and businesses sought more efficient payment processing solutions, Payfacs. A white-label payfac, also known as payfac-as-a-service, is a business model in which a company uses a third-party payfac platform to offer payment processing services under its own brand name. Payfac-as-a-service is a turn-key payment facilitation model in which an external company provides businesses with the necessary tools and infrastructure to accept electronic payments, such as credit and debit cards, ACH, and echecks. This model simplifies the onboarding process, reduces time-to-market, and offers a more user-friendly experience for both merchants and customers. Now, however, the model is maturing, prompting PayFacs to look at other avenues for growth and to deepen their merchant relationships. SaaS platform: A software-as-a-service (SaaS) platform is a business that develops and sells cloud-based software via a subscription model. Payfac-as-a-service model of embedded payments Because of the substantial costs and risks associated with becoming a payfac and building out an embedded financial infrastructure, platforms are increasingly looking to payfac-as-a-service, which provides all the benefits of embedded payments in a cost-efficient way that’s easier to integrate. It also must be able to. They create a platform for you to leverage these tools and act as a sub PayFac. Traditional payfac solutions are limited to online card payments only. If both the Payfac and submerchants are not careful they can leave an opportunity for bad actors to infiltrate the system. Full definition What is the payment facilitator model? Full definition Merchant account 27 February, 2020 Business Development Specialist Yuliia Mamonova Fintech. The PayFac model offers several benefits to end customers: (1) faster onboarding of merchants, (2) increased control of payments experience, and (3) greater revenue share for the ISV. The platform allows ISVs and merchants the flexibility and control to customize their payments capabilities, operating on both a traditional referral and a Payment Facilitation (PayFac) model. A white-label payfac, also known as payfac-as-a-service, is a business model in which a company uses a third-party payfac platform to offer payment processing services under its own brand name. The payfac model emerged to give companies that specialized in payments the ability to reduce the complexity of getting started with online payments and offer services to a broader array of businesses, allowing them to focus on their core competencies. When it comes to connecting with card schemes, two major options are available – either apply for affiliated membership status to the scheme itself or join forces with an acquirer and operate as a Payfac, in accordance with scheme rules. For traditional acquirers like ISOs, having more choice over which merchants to work with means a new pool of high-risk-high-reward clients can be tapped into, potentially kicking off significant portfolio growth. A payfac is a type of payment aggregator, but it typically provides a more comprehensive suite of services. In 2018, payment revenue for North America alone totaled $187 billion, $14. Payment processors. It’s the first step into some responsibilities of payment facilitation. A Payment Facilitator (PayFac) streamlines payment acceptance for multiple merchants or sub-merchants by aggregating them under one merchant account. 07% + $0. A white-label payfac, also known as payfac-as-a-service, is a business model in which a company uses a third-party payfac platform to offer payment processing services under its own brand name. Users can simply describe what 3D model they want to create through text, and the software creates it automatically. Once a sub-merchant has been through the onboarding process it is down to the PayFac to control payments adhering to the rules. Obtain PCI DSS Level 1 certification. When you start accepting payments online, you need a merchant account from a payment facilitator with sufficient infrastructure and proper compliance to process payments . It partners with an acquiring bank and receives a unique merchant identification number (MID). In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance and risk management. Payment Facilitator. In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance and risk management. Payfac-as-a-service is a turn-key payment facilitation model in which an external company provides businesses with the necessary tools and infrastructure to accept electronic payments, such as credit and debit cards, ACH, and echecks. So Which Payfac Model is Right for You? For software providers with the right merchant portfolio, the tools and expertise to support clients’ needs as well as meet legal requirements, becoming a payfac may be the right next step. However, it can be challenging for clients to fully understand the ins and outs of. One of the main benefits to adopting the Payfac ® model is the increase in revenue you get from each transaction processed using your software. Conclusion: The PayFac model significantly simplified the delivery of merchant services to its sub-merchants by: Utilizing sub-merchant aggregation to streamline the credit application, underwriting, and onboarding process. The PayFac uses an underwriting tool to check the features. the Payfac model to enter the payment acceptance space Customer Centricity: Key advantages for Payfacs center on a fast and highly automated merchant onboarding process combined with risk-based/tiered underwriting to deliver a best-in-class user experience for merchants that also manages costs and enables PayFac Services (Payment Facilitator) Understanding the PayFac Model. The PayFac model has brought a revolutionary approach to payment processing, aligning the needs of both merchants and software developers. Payfacs are registered independent sales organizations (ISOs) that have been sponsored by an acquiring bank. Payment facilitators, commonly referred to as PayFacs, are intermediaries who are able to deliver value to the payments industry by a simple match merchants and. Passport, which offers ticketing solutions for different cities and municipalities, was managing 22 different payment gateway integrations once upon a time. What is a Payment Facilitator and the PayFac Model? A Model For the Digital Age; How PayFac Fits; PayFac Examples ; How Do PayFacs Work? Payment Facilitators and Partners in the Payments Ecosystem; Advantages of the PayFac Model; The Payment Facilitator Landscape of the Future. In the PayFac model, banks that monitor PayFacs are called Acquiring Banks. Unlike the conventional payment processor model, payment facilitators underwrite every transaction rather than a single upfront underwriting process. PayFac vs ISO: 5 significant reasons why PayFac model prevails. Payment facilitator model is suitable and effective in cases when the sub-merchant in question is a medium- or large-size business. Before this model was available, businesses would often partner with an ISO to enable payment acceptance for its clients—and many still do today. Most important among those differences, PayFacs don’t issue each merchant. In the traditional PayFac model, businesses own and directly control their payment processing systems. PAYFAC-AS-A-SERVICE (aka Payfac Lite or Managed Payfac) Learn More. Transitioning from One Model to Another. To simplify the PayFac journey for ISVs, payment solution providers like Cardknox offer the PayFac-as-a-Service (PFaaS) model. For traditional acquirers like ISOs, having more choice over. ISVs own the merchant relationships. There are two types of payfac solutions. ISO prospects (beside payment facilitator model) As one of our articles shows, traditional ISO model is unable to compete with PayFac model in terms of value-for-money. UniPay PayFac Payment Gateway. Payment aggregators may charge a flat fee per transaction, while payfacs might offer volume-based pricing. Traditional payfac solutions are limited to online card payments only. A payment facilitator (payfac) is a service provider for businesses that simplifies the merchant-account enrollment process. While ISOs and payfacs both facilitate electronic payments for businesses, they cater to different needs. The most known examples are website-building companies which can provide integrated payment options, meaning ecommerce customers will see their experience improved as they will no longer need to actively look for third-party payment solutions. As small business grows, MOR model might become too restraining, while payment facilitators provide robust APIs, which sometimes allow merchants to customize each function. Before offering customers payment methods from popular card networks (Visa, Mastercard, etc. Leveraging. This eliminates the need for individual merchant accounts and allows businesses to start accepting payments. Myth 1: The PayFac model is the best way for ISVs to enable payments processing while multiplying revenue. A PayFac, or payment facilitator, was originally defined by Visa® and Mastercard® to describe the entity that is officially doing business with the card brands. If you’re considering adopting the PayFac model, know that the right technology partner can help you bypass many of the complexities of payment facilitation — such as having. The PayFac model allows a single entity to become the “merchant of record” and board sub-merchants with fewer data requirements and scrutiny. A PayFac model is best suited for SaaS providers and ISVs whose clients would benefit from integrated payment processing tools. We can also help you build banking relationships and guide you on which processes you must put in place to function efficiently as a payment facilitator. The PayFac model dramatically simplified the merchant onboarding process for companies like Stripe, Square, and PayPal by letting them leverage a. ISOs. Traditional payfac solutions are limited to online card payments only. An increasing number of ISVs and SaaS providers are becoming payment facilitators so that they can provide their clients with streamlined account onboarding andIt may find a payfac’s flat-rate pricing model more appealing. Payrix Premium enables greater scalability, control, and monetization — while. By 2012 when Toast launched, the payment facilitator (Payfac) model was flourishing and this allowed Toast to redefine the POS business model and literally alter the competitive playing field. There are multiple acquirers that now offer the PayFac model. 4. The key phases of this process inculde: getting registered as a PayFac by a card network through an acquiring bank; Implementation of PayFac model creates a new revenue stream and, thus, increases the bottom-line annual revenue of the company, leading to valuation growth. Traditional payfac solutions are limited to online card payments only. September 28, 2023 - October 6, 2023. 3. A white-label payfac, also known as payfac-as-a-service, is a business model in which a company uses a third-party payfac platform to offer payment processing services under its own brand name. The first is simplifying the actual software used. In many of our previous articles we addressed the benefits of PayFac model. PayFac platforms typically operate on a subscription basis; this allows merchants to pay a monthly fee instead of paying transaction fees each time they process a payment. There are significant financial and integration. Recommended for companies processing less than $50M of annual payments volume (APV) 66%. These marketplace environments connect businesses directly to customers, like PayPal, eBay, and Amazon. Traditional PayFac Model Considerations While this model gives the business owner complete control of the payment process, it also means taking on another core competency — potentially monopolizing developer resources. 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. Significantly, Cardknox Go accounts can be onboarded in a. United Thinkers announces integration of its flagship product UniPay Gateway with MPGS to increase its European and Middle Eastern presence. According to Richie, Braintree started as an ISO but then they matured into a PayFac. A white-label payfac, also known as payfac-as-a-service, is a business model in which a company uses a third-party payfac platform to offer payment processing services under its own brand name. Ultimately, the decision between a PayFac and a payment processor depends on your business needs, industry, and desired level of support. 2M) = $960,000 annually. PFaaS Benefits A major difference between PayFacs and ISOs is how funding is handled. The software provider markets integrated payments as features in their software, under their brand, while earning revenue from payment transactions. A payfac is a platform that intermediates payments between consumers, payment operators (card operators, banks,. While the PayFac model provides clear benefits, it can also introduce impediments if not implemented and managed properly. There are a lot of benefits to adding payments and financial services to a platform or marketplace. Forte Payment Systems and Acryness developed a strong relationship under the PayFac model through Vantiv, which enabled Acryness to onboard sub-merchants quickly by accepting liability. In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance, and risk management. Payfac-as-a-service is a turn-key payment facilitation model in which an external company provides businesses with the necessary tools and infrastructure to accept electronic payments, such as credit and debit cards, ACH, and eCheques. 5 billion of which was driven by software vendors. Split funding is one of the most important concepts in the modern merchant services industry. PSP & PayFac 102. The PayFac must properly follow KYC practices and correctly assess the sub-merchants as all transactions can be aggregated under a single merchant ID. It’s going to continue to grow in popularity in the market. PayFacs perform a wider range of tasks than ISOs. 1. Priding themselves on being the easiest payfac on the internet, famously starting. Take a listen as George and Nick Starai, Chief Strategy Officer of NMI discuss the role of the independent payments gateway and its evolution as a technology and business enabler for today’s providers of payment acceptance: ISOs, ISVs, and merchants. Nowadays, many top SaaS payment companies are considering this option. Potentially, it can be a PayFac, offering a highly customized payment API. 1. But the model bears some drawbacks for the diverse swath of companies adopting it, as well as for the merchants that work with them. The cost to become a PayFac starts around $250,000. A PayFac, or payment facilitator, was originally defined by Visa® and Mastercard® to describe the entity that is officially doing business with the card brands. From independent sales organizations (ISOs) to payment facilitators (PayFacs), it’s crucial to understand the goals and. The PF may choose to perform funding from a bank account that it owns and / or controls. The PayFac model allows that company to keep the customer within its own realm when facilitating a transaction. PayFac integration with Finix allowed. Payment Model For The Digital Age Technology is ever-expanding how business is conducted, and payment processing is one such aspect improved by the digital age. Take Uber as an example. In many of our previous articles we addressed the benefits of PayFac model. ISOs offer greater control and potential cost savings for larger businesses with high transaction volumes, while payfacs provide a simpler, all-in-one solution for smaller. A Model That Benefits Everyone. The following is a quick overview of payment facilitators. This will typically need to be done on a country-by-country basis and will enable. While ISOs and payfacs both facilitate electronic payments for businesses, they cater to different needs. In this example, the PayFac model makes payment acceptance more seamless and provides the home chefs (or sub-merchants), with the ability to get paid via the payment processor the PayFac uses. Traditional payfac solutions are limited to online card payments only. It allows you to connect to the banks, to Visa and MasterCard networks. The payfac typically retains control over the merchant experience by providing instructions to the bank on how and. Stripe was founded in 2010 by two Irish siblings: then 22-year-old Patrick Collison and younger brother John, 20, positioning itself as the builder of economic infrastructure for the internet — launching their payfac flagship product in 2011. In the Managed PayFac model, you are in essence a sub Payfac. This reduces risk of fraud. A white-label payfac, also known as payfac-as-a-service, is a business model in which a company uses a third-party payfac platform to offer payment processing services under its own brand name. “With increased income from merchant processing revenue and higher company. Embedding financial services can grow revenue per customer 2–5x higher than the traditional model. A Simplified Path to Integrated Payments. The white-label payment facilitator model ( PayFac in a box) is a try-it-before-buy-it solution for prospective PayFacs. Fully managed payment operations, risk, and. Contact our Internet Attorneys with the form on this page or call us at 855-473-8474. There are a lot of benefits to adding payments and financial services to a platform or marketplace. The meaning of PayFac model is that PayFacs actively participate in merchant underwriting, background verification, monitoring, funding, reporting, chargeback. In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance, and risk management. ETA’s PayFac Committee met this month for a panel discussion on The Scotus . Uber corporate is the merchant of record. They allow future payment facilitator companies to make the transition process smooth and seamless. Aggregate processing means the funds from transactions are paid out to the PayFac first, who then distribute them to. The PayFac is exempt from underwriting all merchants upfront and is instead underwriting merchants as transactions are processed on an ongoing basis. In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance, and risk management. ISOs offer greater control and potential cost savings for larger businesses with high transaction volumes, while payfacs provide a simpler, all-in-one solution for smaller. A Model That Benefits Everyone. What is a Payment Facilitator Model? A Payment Facilitator (PayFac) cuts the need for an individual merchant to establish a traditional merchant account. So, nowadays, a somewhat more popular option is implementation of embedded payments. Stripe’s payfac solution can help differentiate your platform in. A Payment Facilitator (PayFac) is a type of merchant services company that provides business owners with a way to accept electronic payments, both online and in-store. The payfac model emerged to give companies that specialized in payments the ability to reduce the complexity of getting started with online payments and offer services to a broader array of businesses, allowing them to focus on their core competencies. There are pros and cons to the PayFac and ISO model depending on the size and specific requirements of your business. PFaaS products like Cardknox Go are out- of-box solutions that equip businesses with everything they need to become PayFacs: software, compliance, risk monitoring, and so much more. So Which Payfac Model is Right for You? For software providers with the right merchant portfolio, the tools and expertise to support clients’ needs as well as meet legal requirements, becoming a payfac may be the right next step. They aggregate funds across many merchants in a pooled account and streamline the process of onboarding merchants for payment processing. A payment facilitator or a PayFac helps sub-merchants accept electronic payments and network card payments by providing the digital infrastructure necessary to accept such payments. Owning the sub-merchant. The decision to become a Payment Aggregator or Payment Facilitator has massive implications for a SAAS application provider. Online – API, hosted online form, plugins, and more; Mobile – Integrate payments within POS apps using our SDK; In-Person – POS integrations and pre-certified terminals; Unattended – Harness our integrations for sleek unattended hardware; Products. In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance and risk management. In the PayFac model, banks that monitor PayFacs are called Acquiring Banks. PayFac-as-a-Service (PFaaS) models like our Cardknox Go solution deliver tremendous value to businesses that want to integrate payments into their offerings, including instant merchant onboarding, more control over the customer experience, and increased earning potential. The PayFac acts as a go-between the acquirer and the sub-merchant (who always operates under the payment facilitator). They have clients’ insights and processing at a large level. Our intuitive APIs and developer-friendly guides make integration a breeze, minimizing any business disruptions. For example, Cardknox offers white-glove phone support designed specifically for developers. A PayFac, or payment facilitator, is a merchant services model that streamlines the merchant account enrollment process by onboarding a merchant as a sub-account under. What is a Payment Facilitator and the PayFac Model? A Model For the Digital Age; How PayFac Fits; PayFac Examples ; How. The PayFac-as-a-Service model enables software companies to act as payment facilitators, earning a portion of the payments revenue processed on their. R Payfac-as-a-service is a turn-key payment facilitation model in which an external company provides businesses with the necessary tools and infrastructure to accept electronic payments, such as credit and debit cards, ACH, and eCheques. Why PayFac model increases the company’s valuation in the eyes of investors. Embedding financial services can grow revenue per customer 2–5x higher than the traditional model. They create a platform for you to leverage these tools and act as a sub PayFac. Stripe’s payfac solution can help differentiate your platform in. PayFac Model. Our recommendation is to use UniPay Gateway payment platform as the foundation for your ecosystem: thus you will benefit from our long experience of successfully working within the industry (including card-present EMV certifications in different countries), and from our international processing contacts and partnerships. When it comes to connecting with card schemes, two major options are available – either apply for affiliated membership status to the scheme itself or join forces with an acquirer and operate as a Payfac, in accordance with scheme rules. In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance, and risk management. From Anti-Money Laundering (AML) checks to adhering to regional financial regulations, the PayFac model is designed to operate within the bounds of the law, offering both buyers and sellers peace of mind. Put our half century of payment expertise to work for you. Once a sub-merchant has been through the onboarding process it is down to the PayFac to control payments adhering to the rules. See how the three most common models compare so you can determine which is the right fit for your business. The bank receives data and money from the card networks and passes them on to the PayFac. Generally speaking, a PayFac might be suitable for bigger businesses that need to process a large volume of transactions, and an ISO might be more suitable for smaller businesses. This includes chargebacks, data breaches, fraud, misappropriated fund distribution, etc. In the traditional PayFac model, businesses own and directly control their payment processing systems. Other fees are charged by acquirers and card brands (cost of credit card processing paid for usage of their card networks). It involves a structured subscription payment that is considerably lower than the initial development cost. How to become a. The bank receives data and money from the card networks and passes them on to the PayFac. The PayFac model is a payment service provider model where a PayFac enables its customers to accept electronic payments on their platform. Using a PayFac solution enables you to act as a payment facilitator without having to be an expert in payments. 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. There is a substantial cost and compliance requirements. In the PayFac model, there are three main parties involved: the acquirer, the payment facilitator, and the sub-merchant. It partners with an acquiring bank and receives a unique merchant identification number (MID). ISOs offer greater control and potential cost savings for larger businesses with high transaction volumes, while payfacs provide a simpler, all-in-one solution for smaller. According to the FDCPA, collection agencies may not “collect any interest, fee, charge, or expense incidental to the principal obligation unless it was. These include the aforementioned companies and those. PayFacs perform a wider range of tasks than ISOs. This means that businesses only need Stripe to accept payments and deposit funds into their business bank account. Boosting Business with a PayFac Model . In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance, and risk management. In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance and risk management. At UniPay Gateway, we’re dedicated to ensuring you have the insights and guidance necessary to make informed decisions in establishing payment gateways, becoming a PayFac, reducing costs, or transitioning from legacy systems. A white-label payfac, also known as payfac-as-a-service, is a business model in which a company uses a third-party payfac platform to offer payment processing services under its own brand name. First, they make money from the sale of the software itself. In this model, the white-label payfac provider takes care of the underlying technology, payment processing infrastructure, compliance, and risk management. A white-label payfac, also known as payfac-as-a-service, is a business model in which a company uses a third-party payfac platform to offer payment processing services under its own brand name. Implement a classical payment facilitator model or become a white-label PayFac (as explained in our topical white paper). RPayfac-as-a-service is a turn-key payment facilitation model in which an external company provides businesses with the necessary tools and infrastructure to accept electronic payments, such as credit and debit cards, ACH, and eCheques. PayFacs are essentially mini-payment processors. Instant merchant underwriting and onboarding. Traditional payfac solutions are limited to online card payments only. Besides the financial guarantees that PayFac model requires a technical solution that would allow to handle remittance of funds to the merchants (including calculation of fees, withholding of reserves etc). Simplify Your Tech Stack. NMI discuss the role of the independent payments gateway and its evolution. Choosing the right payment processor partner is critical to growing your business’ revenue. Below are examples of benefits afforded to each participant. Stripe’s payfac solution can help differentiate your platform in. The white-label payment facilitator model is less complex and costly, but it does not provide the same level of liability protection.