Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Generally speaking, you will pay more to use a PSP/PayFac than you will with an ISO/MSP. FCRA – Payment facilitators pull client credit reports during the underwriting process and are subject to credit reporting laws as defined by the FCRA. With Payrix Pro, you can experience the growth you deserve without the growing pains. 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. PYMNTS delves into the risk vs. In other words, ISOs function primarily as middlemen (offering payment processing), while PayFacs are payment facilitation. The truck, known as the Infantry Squad Vehicle, will prioritize speed over. A Payment Facilitator or Payfac is a service provider for merchants. The payfac part you described is clear, thanks! What confuses me is that as far as I understand, a PSP can also explore working with a BIN sponsor (an acquirer / a principle member of Visa/MC) so they dont have to get the acquiring license themselves, but in this model they can get into the fund flow since the BIN sponsor would settle to them - this is. Payfac and payfac-as-a-service are related but distinct concepts. Proven application conversion improvement. ISOs rely mainly on residuals, a percentage of each merchant transaction. Payfac solutions can be a critical source of revenue generation, allowing ISVs to differentiate their product and service offerings in a crowded space. A PayFac can remove the long, arduous underwriting process and get merchants up and running quickly – in a matter of minutes versus a few days or even weeks. A good way to make sense of the Payfac model is to look at its two main parts—boarding of merchant accounts and settlement of funds. In Part 2, experts . Credit Card Processing – Process EMV, magstripe, and NFC credit cards;. Wide range of functions. Payfac可以对接一些子商户. 2CheckOut (now Verifone) 7. To become a PayFac, the ISV or VAR signs a direct agreement with a processing bank (e. Assessing BNPL’s Benefits and Challenges. Essentially, a payfac is a company that allows its customers to accept electronic payments using their platform. Payfac-as-a-service vs. 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. By using a payfac, they can quickly and easily. 0. Working with a PFaaS, ISVs can offer a one-stop-shop for your. A PayFac supports a large portfolio of sub-merchants throughout all their lifecycle — from underwriting to funding to. vs. As an added benefit, Partner Connect automates all. PayFac-as-a-Service (PFAAS) combines easy-to-integrate payment technology, full-service offerings, and transparent pricing to deliver Independent Software Vendors a simple way to harness the full power of payment facilitation – minus. Three key reasons why ISVs are becoming Payment Facilitators: Merchant Onboarding: Traditionally, ISVs formed referral relationships with ISOs and vice versa. 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. By using a payfac, they can quickly and easily. Merchants can then tap into the payment facilitator’s existing relationships with acquiring banks and the PayFac’s processing technology to get up and running fast. PayFac or the Payment Facilitator is the third-party payment services provider (PSP). In many cases an ISO model will leave much of the underwriting as well as settlement and reporting to the acquiring bank. 0 began. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Under the PayFac model, each client is assigned a sub-merchant ID. 99 (List Price $1,174. Here, ISOs (Independent Sales Organizations if on the Visa network), or MSPs (Member Service Providers if Mastercard) sell credit card processing services to merchants on behalf of an acquiring bank. e. Also, some companies, such as United Thinkers, are offering special payment facilitator programs. The difference between payment facilitators (payfacs) and independent sales organizations (ISOs) is about which payment services they offer. For businesses, the difference between using payfac-as-a-service compared to becoming a payfac comes down to time, cost, and risk—in short. By using a payfac, they can quickly and easily. This model, typically referred to as “PayFac Light” or “PayFac in a Box”, is one where the acquirer cedes control to the ISV for the majority of merchant-facing functions while the acquirerPartnering with a PayFac vs becoming a PayFac with a technology partner. The result is a seamless onboarding experience for the ISV and flexibility for the ISO in choosing with whom to partner. Renew payfac registration and licenses: Re-register as a payfac with card networks annually, and update or renew MTLs on the required cadence. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. becoming a payfac. Fast, efficient boarding solutions that orchestrate third-party and internal systems to help you turn prospects to customers – face-to-face, on the phone, or online. 4. One of the key differences between PayFacs and ISO systems is the contractual agreement. The ISVs that look at the long. But system integrators (SIs) significantly impact the conversion and retention rates for their independent software vendor ( ISV) partners. A Payment Facilitator or PayFac. June 3, 2021 by Caleb Avery. Under the PayFac model, a merchant is set up under the PayFac’s master account, but they are onboarded with their own unique MID. becoming a payfac. Simultaneously, Stripe also fits the broad. The pace at which development occurs translates into ISV partners receiving revenue from customer payments flowing through their software applications within 30 days — a speed it says is unrivaled by its competitors. becoming a payfac. It needs to obtain a merchant account, and it must be sponsored into the card networks by a bank. Partner with a PayFac: the ISV partners with a PayFac to process payments. The traditional method of bringing payments in-house involves integrating a payment gateway or processor into the platform, allowing for seamless transactions within the platform. And for the payment facilitators (PayFacs) and independent software vendors (ISVs) that serve merchants through software and services that help those firms to accept payments, as Daniela Mielke,. Acquirer = a payments company that. Fast, efficient boarding solutions that orchestrate third-party and internal systems to help you turn prospects to customers – face-to-face, on the phone, or online. In general, if you process less than one million. One example is the new fitness exercise practice management ISV we recently implemented. If your sell rate is 2. For example, an artisan who sells handmade jewelry online may find the process of setting up their own merchant account daunting or unnecessary, given their lower transaction volume. The ISVs that look at the long. 1. Those different purposes lead the two business models to appear and operate very differently. When you are listed, you help secure the promise of a trusted payment system by highlighting your investment in data security and the. Merchants can then tap into the payment facilitator’s existing relationships with acquiring banks and the PayFac’s processing technology to get up and running fast. k. Visa, Mastercard) around 2011 as a way for aggregators to provide more transparency into who their sub-merchants were. Independent sales organizations are a key component of the overall payments ecosystem. Bridge the gap between digital and physical commerce experiences through existing payment. 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. But size isn’t the only factor. However, PayFac concept is more flexible. Accept payments everywhere with Shift4's end-to-end commerce solution. ISO. 1. independent hardware vendors. Intro: Business Solution Upgrading Challenges; Payment. Payment Processors: 6 Key Differences. Hardware vendors can also. 2 Payfac counts exclude unidentifiable or defunct. 200+ Integrations. becoming a payfac. The key aspects, delegated (fully or partially) to a. Payment Facilitators are 100% responsible for PCI Compliance, risk underwriting, funding and providing payment support. Renew payfac registration and licenses: Re-register as a payfac with card networks annually, and update or renew MTLs on the required cadence. Our hypothesis is that a payfac-alternative model (such as Stripe. By PYMNTS | January 23, 2023. Understandably, the PayFac model has grown rapidly in popularity with software vendors in a wide variety of categories. What is a Payment Facilitator (Payfac)? Payfacs are an evolution of a long-established distribution model in the payments industry. On the one hand, these services unlock purchasing power, helping customers manage their finances. Your provider should be able to recommend realistic metrics and targets. As shown in Figure 4, there are far more SaaS companies opting for a Full Payfac operating model in the U. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. A bad experience will likely result in the client choosing another platform. What’s the difference in an ISO and a PayFac? While an ISO merely connects a merchant to a bank, a PayFac owns the full client experience. 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. ISVs that embrace the PayFac model may be underestimating the risks and liabilities associated with that decision. One of the biggest benefits of PayFac-as-a-Service is the smooth onboarding process that delivers a great customer experience. ISO vs. “Plus, you have a consumer base that. When it comes to choosing between a PayFac and an ISO, the best option depends on your business's specific needs and preferences. Sometimes, a payment service provider may operate as an acquirer in certain regions. The Visa Global Registry of Service Providers is the payment industry's designated source for information on registered and compliant agents that provide payment-related services to Visa clients and merchants. In a comprehensive white paper on the subject we explained PayFac meaning and how to become a payment facilitator. Payfac as a Service. An ISV or SaaS business acting as a PayFac embeds payment processing capability into their software by building out their own payment infrastructure — including partnering with an acquiring. An ISO works as the Agent of the PSP. For example, an artisan who sells handmade jewelry online may find the process of setting up their own merchant account daunting or unnecessary, given their lower transaction volume. A PayFac must flag suspicious transactions and initiate corrective action. PayFac vs ISO: 5 significant reasons why PayFac model prevails. On. It is also a great strategy move for the company since they can now offer customers the ability to “grow into” their own payfac at a later date, something. Carat’s experts help define the opportunity and provide the necessary support to empower an ISV to become a PayFac. The result is a seamless onboarding experience for the ISV and flexibility for the ISO in choosing with whom to partner. In the PayFac model, banks that monitor PayFacs are called Acquiring Banks. . . Unlike an ISO which only resells accounts, a PayFac takes an active role in managing transactions from end-to-end. A Payment Facilitator or Payfac is a service provider for merchants. GETTRX’s Zero and Flat Rate packages offer transparent billing, competitive rates, and industry-leading customer service, making them ideal choices for businesses seeking a seamless payment experience. At the same time, Paragon Payment Solutions assumes the majority of risk and responsibilities related to operational expenses, chargebacks,. Some common examples include adoption rate, retention rate, total processing volume, and the lifetime value of customers. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. 9% and 30 cents the potential margin is about 1% and 24 cents. ”. The PayFac model allows a single entity to become the “merchant of record” and board sub-merchants with fewer data requirements and scrutiny. Why Visa Says PayFacs Will Reshape Payments in 2023. In Part 2, experts . Europe. Here’s how a payfac-as-a-service solution will boost your revenues: You charge – 2. Core. What is an ISO vs PayFac? Independent sales organizations (ISOs). With a merchant-friendly platform that could be set up in just a few days with no upfront costs, we can see how attractive Stripe Connect is to B2B software companies in need of a payments solution that won’t eat up a ton of time and resources to implement. While ISV clients will enjoy the benefits of Payfac with the direct model – fast onboarding, payment experience control, a variety of funding options – it could come at a higher price for both the ISV and their clients, and a lower margin for the ISV. . Besides that, a PayFac also takes an active part in the merchant lifecycle. If your sell rate is 2. Payfacs are registered independent sales organizations (ISOs) that have been sponsored by an acquiring bank. The comprehensive approach includes: Both ISOs and PayFacs make payment processing more accessible for small and high-risk businesses by acting as intermediaries. Intro: Business Solution Upgrading Challenges; Payment System Integration A PayFac provides their merchants with the entire payments flow from payment processing through settlement, reporting, and billing. Renew payfac registration and licenses: Re-register as a payfac with card networks annually, and update or renew MTLs on the required cadence. Classical payment aggregator model is more suitable when the merchant in question is either an. Read More. The risk is, whether they can. Essentially, a payfac is a company that allows its customers to accept electronic payments using their platform. Thanks to its flexibility and profitability, PayFac model seems to perfectly adjust to the present-day market requirements. You see. PayFac vs. When it comes to payment facilitator model implementation, the rule of thumb is simple. Carat’s experts help define the opportunity and provide the necessary support to empower an ISV to become a PayFac. Acquiring banks willingly delegated them to payment facilitators in exchange for part of liabilities and residual revenues. Stripe operates as both a payment processor and a payfac. 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. In this scenario, the ISV is onboarded as a referral agent, eliminating several risks associated with becoming your own payment facilitator. Understanding the differences between an ISO versus a PayFac will help you see why using a plug-and-play PayFac-as-a-Service solution is the most effective payment acceptance choice. Finery Markets ''Liquidity Match'' operates through a sub-account model with a master account created by a broker, prime-broker, OTC-desk, or liquidity provider, which then creates multiple sub-accounts to serve its clients via GUI or API. Benefits and criticisms of BNPL have emerged on several fronts. Register your business with card associations (trough the respective acquirer) as a PayFac. Stay on the cutting edge. Essentially PayFacs provide the full infrastructure for another. A payfac is a type of payment aggregator, but it typically provides a more comprehensive suite of services. By using a payfac, they can quickly and easily. Cons. Toggling between payfac-alternative and rental payfac models will allow deal teams to get a sense of which model fits a given ISV. Qualpay offers a fully-integrated payment processing solution, including merchant account, payment gateway, invoicing and recurring payments. In the world of payment processing, the turn of the decade represented a massive transition for the industry. Payfacs are registered independent sales organizations (ISOs) that have been sponsored by an. To accept card payments, an acquirer should be licensed by corresponding card networks and either partner with a payment processor, or be a payment processor itself. Core from WePay gives you the tools to become a Payment Facilitator (PayFac) on Chase's payments infrastructure. 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. , Elavon or Fiserv) to process payments on behalf of their merchant clients. 8–2% is typically reasonable. The payfac model has catapulted into the mainstream, thanks to payments disruptors like PayPal, Square, and Stripe. This way, restaurants can manage their operations and payments from one platform, which can simplify their workflows and enhance customer experience. But the model bears some drawbacks for the diverse swath of companies. Unlike an ISO, the funds are initially settled into the PayFac account, and it is up to the. And acquiring banks, particularly the larger ones, sometimes offer payment processing services to their merchant clients. Payment facilitation helps. 8–2% is typically reasonable. A prospective PayFac has to meet more rigorous requirements and incur large upfront costs. In the scenario of a SaaS company operating as a PayFac, you are the master merchant and your customers are the sub-merchants. Estimated costs depend on average sale amount and type of card usage. For ISVs looking to pivot into the payments arena, it’s important to understand the reason why becoming a PayFac is the best path forward. GETTRX’s Zero and Flat Rate packages offer transparent billing, competitive rates, and industry-leading customer service, making them ideal choices for businesses seeking a seamless payment experience. In essence, they become a sub-merchant, and they face fewer complexities when setting. For example, an artisan who sells handmade jewelry online may find the process of setting up their own merchant account daunting or unnecessary, given their lower transaction volume. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. As the Payment. As your true payments partner, we provide you with an entire division of payments experts essentially in house. As he noted, among the firms that most commonly move down the PayFac path – ISOs, ISVs and platform businesses – the benefits stand out quite brightly: easier merchant onboarding, better control. Jorge started his payment journey 15 years ago. By using a payfac, they can quickly and easily. PayFac vs ISO: 5 significant reasons why PayFac model prevails. Clover Connect's payment engine supports your software’s ever-growing vision with powerful and easy integrations backed by dedicated, always-on support teams. April 12, 2021. What is a PayFac? Who Should Become a PayFac? Independent software vendors have the potential to address $35 trillion in payments, or 15% of the worldwide total, by integrating payments into their platforms. . payment processor; What is a payment aggregator? A payment aggregator, also often referred to as a payment facilitator (payfac) or payment service provider (PSP), is a financial technology company that simplifies the process of accepting electronic payments for businesses. Thanks to the emergence of. For example, an ISV that develops software for the restaurant industry might use a white-label payfac to enable restaurants to accept online orders and payments directly through the software. 2. By Implementing Usio’s PayFac-in-a-Box Technology, BoosterHub now enables electronic payments from the concession stand to the school e-commerce site October 26, 2021 09:00 ET | Source: Usio, Inc. By using a payfac, they can quickly and easily. The merchant obtains a gateway system, its supplementary APIs and the various forms of payment as a bundle and only has to sign one contract. A Payment Facilitator [Payfac] is essentially a Master Merchant that processes credit and debit card transactions for sub-merchants within their payment. “Plus, you have a consumer base that is extremely savvy when it. It could be a product that is yet to reach the buyer,. 0 vs. , Elavon or Fiserv) to process payments on behalf of their merchant clients. The arrangement made life easier for merchants, acquirers, and PayFacs alike. 4. . A payfac is a type of payment aggregator, but it typically provides a more comprehensive suite of services. Supports multiple sales channels. In short, a PayFac or payment facilitator, is a master merchant that supports sub-merchants. For retailers. The ISO would ensure the ISVs software. The rest of this article explores why the ISV and SaaS bond continues to grow. Finery Markets. The Job of ISO is to get merchants connected to the PSP. Offline Mode. Card networks, such as Visa and MC, charge around $5,000 a year for registration. Refer merchants to Chase. Payfac-as-a-service vs. Priding themselves on being the easiest payfac on the internet, famously starting. The U. The PayFac model allows a single entity to become the “merchant of record” and board sub-merchants with fewer data requirements and scrutiny. So let’s break that down. For example, an artisan who sells handmade jewelry online may find the process of setting up their own merchant account daunting or unnecessary, given their lower transaction volume. Here, the ISV can integrate to the payment platform and provide the platform’s Payfac services to their merchants directly. June 26, 2020. Classical payment aggregator model is more suitable when the merchant in question is either an. If the intermediary entity, which funds the sub-merchants, uses different MID for each merchant, it is called a payment facilitator. At Revision Legal, we protect businesses that thrive online, and understand the connections between law, technology, and business. Supports multiple sales channels. With payments as a feature of your software, you can finally offer a seamless payments experience and other. 6 percent of $120M + 2 cents * 1. g. 1. 12. Link. However, there are instances where discrepancies arise. Part 1 charted PayFac’s evolution from “fast onboarding for ISOs” to more nuanced, vertically focused, customizable solutions. The PFaaS provider handles all of the risk, compliance and underwriting on behalf of the ISV. When you want to accept payments online, you will need a merchant account from a Payfac. (ISV) increasingly. 2. A Payment Facilitator, PayFac for short, is simply a way to set up a sub-merchant account for software companies. From an ISV perspective, flat rate pricing is also less transparent. If you have questions about the PayFac model and how to use payments to make your software more attractive, we invite you to check out our free ISV Quick Guide. Contracts. Simplify Your Tech Stack. For example, an artisan who sells handmade jewelry online may find the process of setting up their own merchant account daunting or unnecessary, given their lower transaction volume. There has been explosive growth in the market for payment facilitators (PayFacs), led by the enormous success of well-known PayFacs like PayPal, Square and Stripe as well. Under the PayFac model, a merchant is set up under the PayFac’s master account, but they are onboarded with their own unique MID. So, what. And, yes, the process of becoming a MOR is almost as labor-intensive and time-consuming as the process of becoming a PayFac . ISOs mostly resell merchant accounts, issued by multiple acquiring banks. But the model bears some drawbacks for the diverse swath of companies adopting it, as well as for the merchants that work with them. Both offer ways for businesses to bring payments in-house, but the similarities end there. 4. Uber corporate is the merchant of record. K. North America is a Mature ISV Market, Europe is Not. And this makes a difference for several reasons, when it comes to the pros and cons of using a ISO/MSP vs. GETTRX absorbs the stress of fraud monitoring and compliance reporting while you focus on your business. There is no way to see how much profit a company like Stripe, Square or Braintree is making off processing your payments thanks to their pricing model. Renew payfac registration and licenses: Re-register as a payfac with card networks annually, and update or renew MTLs on the required cadence. Strategies. While there is some overlap between a payment processor and a PayFac, there are also some important differences you should be aware of (although this isn’t a fully exhaustive list!) Here are the top 6 differences: The electronic payment cycleThe onboarding process is critical for an ISV looking to offer payment acceptance to its clients. A payment facilitator (or PayFac) is a payment service provider for merchants. Payment facilitator model is suitable and effective in cases when the sub-merchant in question is a medium- or large-size business. “So, your policies and procedures have to guide how you are going to. For example, an artisan who sells handmade jewelry online may find the process of setting up their own merchant account daunting or unnecessary, given their lower transaction volume. GM Defense. Renew payfac registration and licenses: Re-register as a payfac with card networks annually, and update or renew MTLs on the required cadence. Payment is becoming more cashless than ever now as a massive number of transactions are digitally carried out through credit cards and e-wallets. 1 Overview–principal versus agent. You own the payment experience and are responsible for building out your sub-merchant’s experience. The DOT&E report also noted that the ISV doesn’t have an underbody and ballistic survivability requirement, which could mean the unit would be susceptible to certain threats, but the ISV’s. ISO = Independent Sales Organization. Think Stripe, PayPal,. 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. ISO vs. In its role as a payment processor, Stripe provides the backbone that allows businesses to accept and manage online payments, managing the exchange of information and funds between the customer, the business, and their respective banks. 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. The bank provides the PayFac with a master merchant account. You own the payment experience and are responsible for building out your sub-merchant’s experience. e. . Payfac and payfac-as-a-service are related but distinct concepts. S. Payment Facilitator (PFAC, PayFac, PF): A merchant service provider who can facilitate transactions and simplify the merchant account enrollment process on behalf of the sub-merchant. Global expansion. Risk management. If your rev share is 60% you can calculate potential income. Office of Foreign Asset Control or. Add payment services to your offering. This series, “Just the FACs,” tracks the development and progression of ISVs and PayFacs. Still Microsoft doesn't explain very clearly what these attributes should be. Investing in a PayFac model that leverages ISV software in the next 18 to 36 months before the market tilts towards them will result in a competitive positioning as a PayFac. Find a payment facilitator registered with Mastercard. That’s because becoming a payment facilitator is a long and costly process for ISVs, Abernethy said. ISO does not send the payments to the. By using a payfac, they can quickly and easily. For the ISV, partnerships create the same competitive differentiator that. Products. And now, your software can run on select Clover devices, turning your solution. 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. One of the biggest benefits is that you don’t have to dedicate costly resources to. Intro: Business Solution Upgrading Challenges; Payment System Integration Payment Facilitators vs. Once adopted by their entire client base, this ISV could be one of our largest. I SO. Settlement must be directly from the sponsor to the merchant. By using a payfac, they can quickly and easily. There are many responsibilities that are part and parcel of payment facilitation. The tool approves or declines the application is real-time. The Western States Acquirers Association holds its annual conference September 27 – 28 in Rancho Mirage, California for ISOs and their representatives. It’s used to provide payment processing services to their own merchant clients. Without a. This model offers three key benefits to the ISV: (1) greater share of payment economics compared to the ISO model, (2. Payfac-as-a-service vs. The MoR is also the name that appears on the consumer’s credit card statement. This provides greater ease-of-use, but the PSP charges more per transaction in exchange. A PayFac sets up and maintains its own relationship with all entities in the payment process. Amazon Pay. Let deepstack focus on the complexities of payments technology so you can focus on your product and customers deepstack provides clients with payment processing solutions, including merchant processing services, payments acceptance and disbursements, tokenization, virtual accounts, fraud protection tools, chargeback management, and. ISOs offer greater control and potential cost savings for. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. Most notably, PayFacs can be very lucrative, as. Payment facilitation helps you monetize. However, other models of merchant and referral services provision still remain relevant. Blog 6 Ways Embedded Payments Benefit B2B Accounting SaaS. However, this is considered more of a “pay to play” model where the ISV is leveraging their processing only and there is no revenue share. Payfac as a Service is the newest entrant on the Payfac scene. The choice between a PayFac and a payment processor depends on your business needs, industry, and desired level of support. At first it may seem that merchant on record and payment facilitator concepts are almost the same. PayFac is a way for software applications to turn a traditional cost center into a revenue-generating business unit. We ae talking about value-added reseller (VAR), independent software vendor (ISV), and several kinds of ISO modifications. As well as reducing the administrative burden for sub-merchants, PayFacs have the flexibility to completely customize their payments program. For example, an artisan who sells handmade jewelry online may find the process of setting up their own merchant account daunting or unnecessary, given their lower transaction volume. Payment Facilitators contract directly with the sub-merchant for processing services and perform key payment activities in-house. ISVs solve business problems for the merchants they serve by developing software for streamlining processes and extending customer capabilities. The platform becomes, in essence, a payment facilitator (payfac). Payfac-as-a-service vs. Merchants get underwritten more efficiently, while acquirers are relieved of some merchant services, delegated to PayFacs for a reward. Partnering with Tilled’s PayFac-as-a-Service, for example, can be an effective way to expand your service. Very few PayFac as Service providers publish pricing to sub PayFac’s and there is a reason. Proven application conversion improvement. The first key difference between North America. 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. difference between the two extremes of, on the one hand, an ISV becoming a PayFac and, on the other hand, an ISV having a simple referral relationship. For example, a PSP might collect a $5 fee on a $100 transaction processed, subtract the processing cost of $1. 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. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payment. The core of their business is selling merchants payment services on behalf of payment processors.