Graphs and key figures make it easy to keep a finger on the pulse of your business. The arrangement made life easier for merchants, acquirers, and PayFacs alike. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. And your sub-merchants benefit from the. How to log into your Dojo account. Use the WePay Account ID in the POST /accounts/id endpoint to update their Account with this information: Copy. The API response will contain a Legal Entity ID in the id parameter. It’s important to look for a payfac that has a strong track record of security and compliance and has implemented measures such as tokenization, encryption, and fraud detection and. The issue is priced at ₹122 per share. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. Optimized across years of experience onboarding and verifying millions of individuals and businesses, our payfac solution includes real-time KYC checks, sanctions screening, secure card data tokenization and vaulting,. These steps will help you make that determination. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. What is a payment facilitator, and what is payfac-as-a-service? Here’s what businesses need to know about how payfac solutions work. In fact, the exact definition of money transmission varies between different states. What is a payment facilitator, and what is payfac-as-a-service? Here’s what businesses need to know about how payfac solutions work. Merchants who find it difficult or expensive to fully comply with PCI DSS requirements may consider using encrypted methods (such as Hosting the CSE library) or outsourcing card processing to a PCI-compliant payment. Feel free to download the official Mastercard Rules and other important documents below. This allows the company to focus more on its core competencies,. Becoming a Payment Facilitator involves understanding and meeting. The tool approves or declines the application is real-time. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. Everything from building webhooks to understanding payment intents is at your fingertips. Most PayFacs will require at least 3-5 full time employees just to. 3 Marks Display 106 1. Experience an end-to-end solution covering both global. Some ISOs also take an active role in facilitating payments. Our APIs enable you to build and scale end-to-end payments experiences, from instant onboarding to global payouts, and create new revenue streams—all while having Stripe handle payments KYC. You’ll need adequate financial reserves, likely at least $1-$2 million, to get started. You need to dedicate or hire resources with the requisite skills to handle underwriting, approvals, regulatory. Payment Processing. Whether you're prepared to become a Payment Facilitator or wish to start on a more modest scale and expand confidently, PayTech Partners provides the necessary tools, and expertise to guarantee your success. These identifiers must be used in transaction messages according to requirements from the card networks. 5. Collects, encrypts and verifies an online customer's credit card information. In layman’s terms, that means your company will have to go through a time-consuming and expensive process, including documenting all your system’s structure and protections. The payment facilitators themselves: which are companies providing the necessary infrastructure and allows their sub-merchants to accept payments via credit card. Use the WePay Account ID in the POST /accounts/id endpoint to update their Account with this information: Copy. By allowing submerchants to begin accepting electronic. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. The acquirer is liable for transactions processed through the PayFac’s account; and because it is the member of the card scheme networks, it must follow their rules and requirements, also bearing full responsibility for underwriting, performing on-going due diligence on the master merchants, and onboarding them. 1 Overview–principal versus agent. You must then verify certain customer information using reliable and independent documentation or electronic data, or a combination of both. Most of the requirements for. PayFac-as-a-Service has emerged from payment companies and independent sales organizations (ISO) that have gone through the regulatory compliance of PayFac registration. Outlined below are the steps most companies will need to take. 2. Payments for platforms and marketplaces. Traditional payfac solutions were popularized in the late 1990s as a way to help small- and medium-sized businesses accept online payments more easily. 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. Historically, a bank’s onboarding requirements catered to larger businesses that could manage the complex, costly, and time-consuming legacy setup processes. Embedded experiences that give you more user adoption and revenue. "EZ PayFac, a Pay-Fac-as. Finding the right provider—whether. The PayFac/Marketplace is not permitted to onboard new sub-entities. Take Uber as an example. 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 the PayFac’s master account. Our partners are in the driver's seat. Stripe is free to set up and the company does not charge a monthly or annual fee for its services. 6% plus 10 cents for in-person transactions. 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 the PayFac’s master account. What is a payment facilitator, and what is payfac-as-a-service? Here’s what businesses need to know about how payfac solutions work. Brazil. 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. You should be aware that the payfac model also has ongoing license requirements to maintain a good standing and credit requirements with acquiring banks and appropriate networks. Why go PayFac? A PayFac is a master merchant that deals with the processor and has sub-merchants – customers – underneath. Financial Crimes Enforcement. In the late 90s, traditional PayFac solutions became popular as a solution that made it easier for medium- and small-sized businesses to accept payments made online more easily. This identifier is the reason sales made by a given. The process of becoming a PayFac typically involves the following phases: Assessing the feasibility — Companies should first assess whether becoming a PayFac aligns with their business goals, resources, and risk tolerance. Also known as a “PayFac” or merchant aggregator, a payment facilitator is a third party agent that contracts with an acquirer to THE ACQUIRER A Visa Client licensed to provide card acceptance services. White-label payfac services can allow businesses to revolutionize their payment processing capabilities, improve the customer experience, and explore new revenue opportunities—all while maintaining focus on their primary competencies. They use the PayFac’s merchant account to process their transactions, and they pay a fee to the PayFac for this. Traditional payfac solutions require building and investing in multiple systems for payment processing, sub-merchant onboarding, compliance, risk management, payouts, and more. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. 5. For the. 4. To learn more, check out our privacy policy. Consequently, this is making our PayFac as a service value proposition increasingly attractive to ISVs who want to monetize payments. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. The Benefits of Partnering with the Right Payments ExpertTraditional payfac solutions were popularized in the late 1990s as a way to help small- and medium-sized businesses accept online payments more easily. Customized Payment Facilitation (PayFac). As these definitions change, companies must invest resources to adhere to new regulations. In the quest to drive top line and margins, these ISVs may be overlooking the specific requirements for customers within a vertical, and they may be missing the chance to offer a creative, user. As such, read on to discover how the PayFac model works, how to get the best out of it, and how your company can become a payment facilitator. 5 million. This model is well known for providing for the greatest returns, but it also comes with increased risk, more regulatory requirements, increased fees, and higher overhead costs. Sections 10. In this informational article, we discuss everything you need to know about how PayFac as a Service can benefit your business without the investment, risk and. When choosing a payment solution, factors include business size, transaction volume, industry requirements, geographical reach, scalability, and ease of integration with existing systems. Only PayFacs and whole ISOs take on liability for underwriting requirements. Submerchants: This is the PayFac’s customer. Gain a higher return on your investment with experts that guide a more productive payments program. “A payments facilitator (or PayFac) allows anyone who wants to offer merchant services on a sub-merchant platform. Toggle Navigation. . Ensure proper safety, trust, regulatory requirements are being met as your. You should be aware that the payfac model also has ongoing license requirements to maintain a good standing and credit requirements with acquiring banks and appropriate networks. Essentially, a payfac is a company that allows its customers to accept electronic payments using their platform. Australia. These first few days or weeks sets the tone for how your partners will best. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. An ISO is a third-party company that refers merchants to acquiring banks or payment service providers. Sponsors: Sponsors are the combination of an acquiring bank and a payment processor. Independent sales organizations are a key component of the overall payments ecosystem. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. For Platforms. Fine: $12. The technological environment is changing as well. Yet Stripe also offers an extensive degree of customization for businesses with complex needs or high transaction volumes. Pre-assessment . Here are the five key components that make becoming a PayFac viable option: Available Capital: Facilitation is a development intensive effort. Make onboarding a smooth experience. 3. Traditional payfac solutions require building and investing in multiple systems for payment processing, sub-merchant onboarding, compliance, risk management, payouts, and more. Skaleet's Core Banking Platform helps marketplaces launch their PayFac solution by opening a merchant bank account and receiving a merchant category code (MCC) to acquire and aggregate payments for a group of smaller merchants, typically called sub-merchants. If the merchant fits the requirements, PayFac onboards is a sub-merchant under the master MID. Especially, for PayFac payment platforms and SaaS companies. Payfacs provide a payment gateway, a software that acts as an intermediary between a business’s website and the. Registered payment facilitators earn 20-40 basis points more per transaction than they would riding the rails of another wholesale PayFac. Where applicable, Etsy may charge local taxes (e. Traditional payfac solutions were popularized in the late 1990s as a way to help small- and medium-sized businesses accept online payments more easily. Businesses operating in the UK should be aware of the dynamics of the PayFac landscape and the regulatory requirements they must meet to operate in this space. Traditional payfac solutions require building and investing in multiple systems for payment processing, sub-merchant onboarding, compliance, risk management, payouts, and more. 5. As payment facilitators evolved, they became comprehensive solutions that cater to merchants’ diverse requirements, offering a complete suite of services to enhance their overall payment experience. PayFac-as-a-Service is quick, easy, and more efficient than becoming a registered PayFac. PayFacs provide a similar. Billing and Invoicing: Create stunning invoices using our powerful invoice editor, which is integrated into your accounting system. The payfac directly handles paying out funds to sub-merchants. On. and underwriting requirements), the company leverages a service provider's existing PayFac infrastructure. With all its complex requirements, the underwriting process can feel daunting. Historically, a bank’s onboarding requirements catered to larger businesses that could manage the complex, costly, and time-consuming legacy setup processes. Payment facilitation is among the most vital components of monetizing customer relationships —. Historically, a bank’s onboarding requirements catered to larger businesses that could manage the complex, costly, and time-consuming legacy setup processes. Looking to the future, the PayFac sector in the UK is expected to continue to grow and evolve, with new players entering the market and existing players expanding their offerings. ISOs may be a better fit for larger, more established. Traditional payfac solutions require building and investing in multiple systems for payment processing, sub-merchant onboarding, compliance, risk management, payouts, and more. A PayFac might be the right fit for your business if:. Amazon Pay. PayFac History. We handle most compliance requirements — this includes tokenization to help you with PCI. This can be an arduous process. Ensure that the payfac is compliant with regulatory requirements, such as PCI-DSS, and is able to provide a secure environment for processing electronic payments. The PayFac model thrives on its integration capabilities, namely with larger systems. So while the PayFac model has the highest revenue potential, it also has the greatest cost, as you will see in this infographic. Traditional payfac solutions were popularized in the late 1990s as a way to help small- and medium-sized businesses accept online payments more easily. Traditional payfac solutions require building and investing in multiple systems for payment processing, sub-merchant onboarding, compliance, risk management, payouts, and more. For all requirements identified as either “Partial” or “None,” provide details in the “Justification for Approach”. 1. PCI Compliance requirements are:. For example, payfac models are common among software vendors providing US municipal government payment portals, because cardholder fraud is low, chargeback risk is very low, and client. Businesses switching from PayFac to MoR must expect stricter compliance and risk management requirements, while those moving from MoR to PayFac may reduce administrative burdens but could encounter changes in payment processes and customization options. Also, it’s essential to mention that PayFac is a Mastercard model, while the one for Visa is a payment service provider. THIRD PARTY AGENT An entity that provides payment related services on behalf of a Visa Client. Historically, a bank’s onboarding requirements catered to larger businesses that could manage the complex, costly, and time-consuming legacy setup processes. 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. The Worldpay PayFac® experience goes the distance from boarding sub-merchants to collecting payments, reducing risk, and more. Payment facilitators, or PayFacs, is a single merchant ID (MID) with a payment service provider and board ‘sub-merchants’ under their own MID, essentially acting as one large merchant account. The Insights dashboard. How to start payfac? Becoming a payment facilitator involves navigating the various intricacies and requirements that may vary from your region and respective. Traditional payfac solutions require building and investing in multiple systems for payment processing, sub-merchant onboarding, compliance, risk management, payouts, and more. So the master Payment Facilitation provider may offer a 40 or 50% or more share of revenue as described above. Ensure that the payfac is compliant with regulatory requirements, such as PCI-DSS, and is able to provide a secure environment for processing electronic payments. Many software companies that decide to become a Payfac, rather than referring payments to a third party, view control over their merchant experience as a significant reason why. Therefore, since it has to carry that liability, the acquiring bank establishes some stringent requirements that the. A payment facilitator (payfac) is a company that simplifies the process of accepting electronic payments for other businesses. PAYMENT FACILITATOR As payment facilitators evolved, they became comprehensive solutions that cater to merchants’ diverse requirements, offering a complete suite of services to enhance their overall payment experience. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. 1 ATM Requirements 119 1. We’ll help you bring your payfac experience to market fast, with operational readiness and tools for your payments strategy. Traditional payfac solutions require building and investing in multiple systems for payment processing, sub-merchant onboarding, compliance, risk management, payouts, and more. For businesses with the right needs, goals, and requirements, it’s a powerful tool. 4 Transaction Identifier Requirements 24 Chapter 7. A payment facilitator is a company (generally an ISV) that allows its users to accept payments through their software using their infrastructure. A powerful payment gateway that supports an extensive combination of devices, and operating systems for point of sale payments. ISOs often offer a wider range of. So each acquirer has its own set of Payfac requirements regarding things like underwriting, risk monitoring, funds settlement, and other policies and procedures. White-label and offer Airwallex’s online payment processing solution to your customers. It’s important to look for a payfac that has a strong track record of security and compliance and has implemented measures such as tokenization, encryption, and fraud detection and. You may likely serve a diverse array of customers, from large enterprises to individuals on “freemium” plans. Usually, EMV certification involves an administrative fee (charged by acquirers), ranging between $2,000 and $3,000 for every formal test script run. As a PayFac, Segpay handles the sub-merchant onboarding and provides a fully managed payment processing solution. New PayFacs must find an acquiring partner to issue them a master merchant account. ETA announced the selection of nine young professionals to participate in the 2022 ETA Young Payments Professionals (ETA YPP) Scholar Program. Segment your customers. With a. Our engagements include a holistic understanding of your business model, goals, competition, timelines, budgets, resources and key-assets you wish to integrate, acquire or consolidate to scale your business. Traditionally, businesses that wanted to accept credit card payments had to complete a lengthy,. Ensure that the payfac is compliant with regulatory requirements, such as PCI-DSS, and is able to provide a secure environment for processing electronic payments. One FTE is sufficient until $250M in processing volume, then you’d need to add more bodies. Payments for platforms and payments for ordinary merchants are not the same. Minimum net worth, financial statements, and surety bonds are often needed in order for a third-party payment processor or payment facilitator to get licensed as a money. 7 and 12. Stripe and Square are two examples of well-known PayFacs that are incredibly popular with business owners in a wide variety of industries. Experience with OFAC, AML, KYC, BSA regulatory requirements. Payment processors must meet PCI DSS standards, but it’s still not a legal requirement to offer all Anti-Money Laundering (AML) requirements and proper due diligence. This could mean that companies using a. PCI compliant Level 1 Services Provider. Access to fast, flexible funding for any restaurant need. Your application must include: the application form relevant to your type of firm. 5 Card Acceptance Prohibitions 114 1. Choose from a selection of free payment templates below, in Excel, Word, and PDF formats. Some ISOs also take an active role in facilitating payments. The API reference may indicate different requirements, but those requirements are the default, whereas PayFac requirements are enhanced. The next step towards becoming a payment facilitator is creating a merchant management system. What benefits do payment facilitators receive? What are the drawbacks of becoming a PayFac? What is a PayFac? Who Should Become a PayFac? Independent. A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. 3. It makes you analyze all gateway features based on requirements, specific to payment facilitator and software service platform models. The program, sponsored by Discover Global Network, provides ETA YPP scholars with mentors from leading payments companies, complimentary access to ETA industry events, and. A common mistake ISVs and SaaS platforms make when becoming a payment facilitator is underestimating infrastructure requirements. Traditional payfac solutions require building and investing in multiple systems for payment processing, sub-merchant onboarding, compliance, risk management, payouts, and more. The % depends on many variables including customer base, volume of transactions and dollars, support requirements etc. It’s important to look for a payfac that has a strong track record of security and compliance and has implemented measures such as tokenisation, encryption, and fraud detection. 2CheckOut (now Verifone) 7. Enabling businesses to outsource their payment processing, rather than constructing and maintaining their own. Transaction message / unique identifier requirements As a Payfac, you receive a business identifier from the networks when your sponsor registers you. The payment facilitator operating regulations apply to all Visa regions and define participant roles and obligations. A registered Payment Facilitator, also known as a “PayFac” or “merchant aggregator” is a third-party business or platform that contracts with an acquirer to provide payment services to their customers, referred to as “sub-merchants. This is beneficial for smaller businesses that have a lower transaction volume, since the cost breakdown is clear and there is no need to negotiate. Automated on-boarding with one-click merchant acceptance allows you to board 100% of your existing users and all new customers moving forward. 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. Payment facilitation helps you monetize. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. • It operates in a highly competitive segment with many big players. Chargeback management also falls under the purview of the PayFac. The PayFac uses an underwriting tool to check the features. 6 Transaction Receipts 116 1. The applicant will need to demonstrate it has policies and procedures in place to comply with requirements: an acceptable use policy, a credit and fraud risk underwriting policy and an anti-money. While the payment facilitator (PayFac) model has grown in popularity as a way to board merchants quickly. View the new design and our FAQ. Update and manage your account. This sounds complicated, but at the most basic level, a payments facilitator is a way of outsourcing part of your business to an intermediary contractor. 7 Transaction Processing 120 1. It’s important to look for a payfac that has a strong track record of security and compliance and has implemented measures such as tokenization, encryption, and fraud detection and. Morgan Payments' Merchant Services and Treasury Services will make data available via portal, API, and automated. How to nickname locations and card machines. Our platform and services are compliant with PCI DSS. Payment Facilitator. Integrate in days, not weeks. 2 Merchant Agreements 106 1. What ISOs Do. The requirements for marketplaces are defined by Visa rules; Visa is the only card brand with a specific marketplace program. Paysafe connects merchants and consumers around the world through seamless payment processing, digital wallet, and online cash solutions. Payfac: Business model. For service providers published on the Registry, if Visa does not receive the appropriate revalidation documents: Within 1 - 60 days upon expiry of the validation documents, the service provider will be identified. Fundamentally, a marketplace exists to connect consumers and retailers on a single website or app (a marketplace must be an ecommerce business; Visa rules do not allow for a card present “marketplace”) that. Ensure that the payfac is compliant with regulatory requirements, such as PCI-DSS, and is able to provide a secure environment for processing electronic payments. What is a payment facilitator, and what is payfac-as-a-service? Here’s what businesses need to know about how payfac solutions work. The choice between a PayFac and a payment processor depends on your business needs, industry, and desired level of support. White-label payfac services can allow businesses to revolutionise their payment processing capabilities, improve the customer experience and explore new revenue opportunities – all while maintaining focus on their primary competencies. For both a Payfac and submerchant, knowing why the steps they are taking to protect cardholder data is important will give context and substance to the policies and procedures. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. Register Sub-merchants You (the PayFac) will register sub-merchants by using the WePay API; Process Transactions Customize your authorization and settlement connection according to your own product requirements; Get Reports J. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. Traditional payfac solutions require building and investing in multiple systems for payment processing, sub-merchant onboarding, compliance, risk management, payouts, and more. Integrating a white-label PayFac gateway is another option to try. On top of the requirements placed on it by other entities, the Payfac may choose to be even more restrictive, for risk mitigation or other business reasons. Larger. What is a payment facilitator, and what is payfac-as-a-service? Here’s what businesses need to know about how payfac solutions work. Then the. The PayFac is then responsible for managing its sub-merchants and processing all transactions on their behalf. Step 4: Buy or Build your Merchant Management Systems. 2. To limit the difference between the complete income a person should report to the IRS. Simplifying the payment acceptance process for merchants is the key to the payfac business model. Dispute process guide for merchants using Prime Routing for PINless debit card transactions. Then the PayFac needs to build a number of other tools or go through compliance processes, like becoming PCI Level 2 certified, but as soon as they reach. Regulatory complexity. Your startup would manage the onboarding. Avoid the slow, manual sub-merchant onboarding with other payfac solutions, and offload your payments compliance obligations to Stripe. Chances are, you won’t be starting with a blank slate. If you are looking for a simple, affordable, and secure payment processing solution, a payfac is a good option. Pricing: 2. Secure Login. Better account security with multifactor authentication. No hassle onboarding: Fast start to. Also, it’s essential to mention that PayFac is a Mastercard model, while the one for Visa is a payment service provider. Operating across more than 120 countries worldwide, CSG manages billions of critical customer interactions annually, and its award-winning suite of software and services allow companies across dozens of industries to tackle their. Payments Exchange: Fedwire streamlines every step in the wire transfer process, enabling straight-through processing and a paperless transaction environment, which means you can handle a higher volume of wires more efficiently. The PayFac would also need to hire a FTE to take exceptions and review these exceptions for risk. Before you can answer the question of whether to become a PayFac, you must first understand the requirements. Or contact Customer Support at 1-833-758-1577. What is a PayFac and how does it work? In its simplest form,. Uber corporate is the merchant of record. Payments. Global availability. With the growth of off-the-shelf PayFac offerings known as PayFac-as-a-Service (PFaaS) solutions, ISVs or VARs can get up-and-running fast with. To be approved by the acquirer and card brands, PayFacs undergo strenuous review to ensure they have. WorldPay. The OptBlue®️ Program from American Express helps you provide an easy, one-stop solution for your merchants, so they can accept American Express the same way they do for other card brands. <field_name>_required. During ETA’s State of Payments, held virtually on January 25, 2023, the ETA’s Payment Facilitator Committee predicted more PayFac growth in 2023, advising ETA members that regional banks and credit unions. In many cases an ISO model will leave much of. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. While large businesses were experts in payment facilitation, smaller enterprises were being left behind. The API reference may indicate different requirements, but those requirements are the default, whereas PayFac requirements are enhanced. The ISO, on the other hand, is not allowed to touch the funds. The key is working with the right sponsor as you embark on the journey of becoming a successful PayFac. Historically, a bank’s onboarding requirements catered to larger businesses that could manage the complex, costly, and time-consuming legacy setup processes. Pillar 1: Onboarding and underwriting The PayFac handles all of the compliance checks on new merchant applications and ensures that they are safe to bring onto the platform. So, MOR model may be either a long-term solution, or a. What is a payment facilitator, and what is payfac-as-a-service? Here’s what businesses need to know about how payfac solutions work. Pillar 2: Transaction monitoring The PayFac protects against possible fraud by monitoring every transaction that is processed through the platform. Edit User Profile. Then in 2014, he co-founded Infinicept, which provides tools and services that enable companies to get payments going their way. Payfacs provide a payment gateway, a software that acts as an intermediary between a business’s website and the payment processor. Businesses switching from PayFac to MoR must expect stricter compliance and risk management requirements, while those moving from MoR to PayFac may reduce administrative burdens but could encounter changes in payment processes and customization options. Strong Understanding and previous experience with Money Service Business, PayFac as well as International Banking/FX. Larger. Chances are, you won’t be starting with a blank slate. A payment facilitator, or “PayFac”, is a company that enables merchants and vendors to accept electronic payments for goods or services. And if you thought you’d be able to stop paying them now that your registration is complete, think again. Any inconsistencies in the process will be flagged by the PayFac and must be addressed by the sub-merchant as necessary. The principal versus agent guidance in ASC 606 applies to revenue arrangements that involve three or more parties and is applied from the perspective of an intermediary (for example, a reseller) in a multi-party arrangement. Here are some potential drawbacks or challenges for a SaaS platform in becoming a Payment Facilitator (PayFac): High capital requirements. A Model That Benefits Everyone. Also known as a “PayFac” or merchant aggregator, a payment facilitator is a third party agent that contracts with an acquirer to THE ACQUIRER A Visa Client licensed to provide card acceptance services. Hybrid PayFac: This model strikes a balance. For instance, some jurisdictions are still defining what a PayFac is. Card brand rules require the sponsor to monitor the Payfac’s compliance with operating rules and regulations and ensure the Payfac’s due diligence when boarding and overseeing submerchants. Etsy Plus subscription fees are deducted from your current balance each month and reflected in your payment account. The core of their business is selling merchants payment services on behalf of payment processors. There are regulations and requirements which have been set out in the ETA’s September 2018. The first is revenue share. 1 General. The PayFac model allows a single entity to become the “merchant of record” and board sub-merchants with fewer data requirements and scrutiny. We have APIs for all business types, whatever your size or location and whether you take payments online or at point of sale. Ensure that the payfac is compliant with regulatory requirements, such as PCI-DSS, and is able to provide a secure environment for processing electronic payments. They typically work with a variety of acquiring banks, using those relationships to "resell" merchant accounts to merchants. Traditional payfac solutions require building and investing in multiple systems for payment processing, sub-merchant onboarding, compliance, risk management, payouts, and more. A merchant account is a business bank account required for businesses to accept debit and credit card transactions, as well as other forms of electronic payments. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. Traditional payfac solutions require building and investing in multiple systems for payment processing, sub-merchant onboarding, compliance, risk management, payouts, and more. Communicates between the merchant, issuing bank and acquiring bank to transfer. As a result, the PayFac must handle underwriting and approvals, the merchant onboarding process, receives funds on behalf of its clients, and create a schedule to transfer those funds into merchant accounts. See all 7 articles. Payments White-label payfacs explained: How branded payment services benefit businesses Last updated September 6, 2023 Introduction What is a payfac? How. Traditional payfac solutions were popularized in the late 1990s as a way to help small- and medium-sized businesses accept online payments more easily. On behalf of the submerchants, payments (debit, credit, etc. The minimum order quantity is 1000 Shares. sales taxes or VAT/GST) on your monthly subscription fee. Square, Stripe, PayPal, AirBnB and Uber are well-known examples of PayFacs. Sections 10. Platforms also have ongoing requirements to maintain their good standing and credit requirements with acquiring banks and card networks. What is a payment facilitator, and what is payfac-as-a-service? Here’s what businesses need to know about how payfac solutions work. Those sub-merchants then no longer have. It offers the infrastructure for seamless payment processing. There are pros and cons to the PayFac and ISO model depending on the size and specific requirements of your business. Step 3) Integrate with a payment gateway. Historically, a bank’s onboarding requirements catered to larger businesses that could manage the complex, costly, and time-consuming legacy setup processes. The PayFac uses their connections to connect their submerchants to payment processors.