By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Some stay where they are (like, again, Uber or Amazon), while others decide to implement the PayFac model. India’s leading payment gateway: Working with a full-service payment services provider,. Once you’ve been authorized as a payment facilitator, the ongoing costs continue often exceeding $100,000 a year. But of course, there is also cost involved. These companies include owners of SaaS platforms, franchisors, ISO, marketplaces, and venture capital firms. Payment processors do exactly what the name says. A guide to payment facilitation for platforms and marketplaces. PayFac vs. Learn more: What is an ISO? PayFac vs marketplace: what’s the difference? A PayFac is similar to a marketplace in that it provides a platform for merchants to sell their goods or. Whatever information you need, we can help. Payfac’s immediate information and approval makes a difference to a merchant. Orange California Equipment Maintenance Agreement with an Independent Sales Organization. Unlike PayFac technologies, ISO agreements must include a third-party bank to sponsor the contract. You own the payment experience and are responsible for building out your sub-merchant’s experience. And this makes a difference for several reasons, when it comes to the pros and cons of using a ISO/MSP vs. (ISO). In contrast, PayFacs have one or two processor relationships and onboard ISVs as referral agents. Payment Facilitator vs Payment Processor. 20) Card network Cardholder Merchant Receives: $9. Payscape is also a registered ISO/MSP for Fifth. Whatever works best for them. What is a Payment Facilitator (Payfac)? Payfacs are an evolution of a long-established distribution model in the payments industry. Visa vs. An ISO acts as a middleman, facilitating the relationship between the ISV and the payment. ISOs rely mainly on residuals, a percentage of each. subscribing, and for some of these “old heads” (I’m in that group…. While the PayFac model comes with some unique risks, the benefits of additional control and potentially higher margins have seen its popularity grow among two major categories of operators:. This doesn’t happen with ISO, as it never handles money directly. To put it another way, PIN input serves as an extra layer of protection. The differences are subtle, but important. Payfac’s immediate information and approval makes a difference to a merchant. However, the setup process might be complex and time consuming. Unlike PayFac technologies, ISO agreements must include a third-party bank to sponsor the contract. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. However, the setup process might be complex and time consuming. PayFac vs ISO. They provide services that allow software platforms to accept credit and debit card payments and make it easier and faster for them to start accepting payments as they handle most of the work for you. Recently, the concepts of PayFac and aggregators have started converging. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. ; Re-uniting merchant services under a single point of contact for the merchant. This site uses cookies to improve your experience. In this model, the issuer (having the relationship with the cardholder) and the acquirer (having the relationship with the Merchant) is the same entity. Just to clarify the PayFac vs. It’s an easy choice for the ISV or PayFac that wants to boost its growth and dip its toes into a very easy international market. Here are the six differences between ISOs and PayFacs that you must know. If necessary, it should also enhance its KYC logic a bit. PayFacs are often more suitable for SMEs seeking a quick and straightforward setup. The payment facilitator model was created by the card networks (i. Our digital solution allows merchants to process payments securely. This solution includes hosted payment pages; one-time, subscription, and one-click billing solutions; risk management; affiliate tools, and end-user customer support. Both PayFacs and ISO’s (independent sales organizations) act as intermediaries between merchants and payment processors . July 12, 2023. Similar to PayPal or Square, merchants don’t get their own. Instead of relying on an ISO program that's heavily focused on payments as a service, we're changing the concept of what service actually means. A Payment Facilitator or Payfac is a service provider for merchants. If your sell rate is 2. Both aggregators and facilitators offer similar benefits from the perspective of the end-user. Industries. Until recently, SoftPOS systems didn’t enable PINs to be inputted. Payment facilitators (PFs) were created to make a more streamlined path to electronic payment acceptance for small and medium-sized businesses. Blog. PayFac offers clients a choice if they wish to pay by cheque or bank transfer. Principal vs. It enters a contractual agreement with its customer, the PayFac, which is the master merchant. Visa, Mastercard) around 2011 as a way for aggregators to provide more transparency into who their sub-merchants were. Read article. It provides a technology, allowing to authorize transactions and, potentially, receive transaction settlement information. Both offer ways for businesses to bring payments in-house, but the similarities end there. Mastercard PayFac Models: The Ins and Outs of the “Big Two” Payment Facilitator Programs. The main difference between payment aggregator and a payment facilitators is that their sub-merchants all have different MIDs in a PayFac. At the same time, Paragon Payment Solutions assumes the majority of risk and responsibilities related to operational expenses, chargebacks,. Download to discover your next payment strategy: Sponsor: Nexio #. Difference #1: Merchant Accounts. To help us insure we adhere to various privacy regulations, please select your country/region of residence. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Those who implement the PayFac model get their residual revenue share for handling both business and technical aspects of merchant lifecycle. The downside of this speed is the risk exposure in a breach; if a retail ISO is breached the acquirer steps in and shoulders most of the load. Modern PayFacs find it more profitable to integrate with just one processor/gateway and provide merchant processing services (onboarding, chargeback. For example, an. In short, a PayFac or payment facilitator, is a master merchant that supports sub-merchants. Avoiding The ‘Knee Jerk’. PayFac is more flexible in terms of providing a choice to. The speed at which a merchant can start processing payments with a PayFac is vastly different than the rate at which this could be done in the legacy ISO model. It needs to obtain a merchant account, and it must be sponsored into the card networks by a bank. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. VAR, ISV, Next-generation ISO: Outside Payment Facilitator Paradigm. While all of these options allow you to integrate payment processing and grow your. Thus, an ISO’s customers can access a wider range of processors, even if the onboarding experience is tedious. ISOs mostly resell merchant accounts, issued by multiple acquiring banks. To learn more about the differences between these payment models, see our blog: PayFac vs ISO: Weighing Your Payment Options. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. In contrast, a PayFac is responsible for the submerchants. The submerchants and the PayFac enter into an agreement, and that agreement is not related to the PayFac’s agreement with the payment processing partner. facilitator is that the latter gives every merchant its own merchant ID within its system. PayFac vs ISO. But to financial and merchants it means something high different. ISOs are sometimes compared to archaic human species becoming extinct and. Checkout’s UK & Europe net revenues in FY2019 were $55M and grew 52% yoy. The former, conversely only uses its own merchant ID to process transactions. The main difference between these two technologies,. If you are an existing Bambora customer who needs assistance there are our support guides that can be found here. We promised a payfac podcast so you’re getting a payfac podcast. Here, the Payfacs are themselves the merchants of record. A PayFac works by establishing one master merchant account, which can then be leveraged by multiple businesses for a small fee. However, the setup process might be complex and time consuming. Payment facilitation helps. Visa and Mastercard allow sub-merchants to process up to $1 million in annual charge volume before requiring them to establish their own, independent merchant accounts. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. This is a clear indicator that fraud monitoring should be a priority in 2022 and beyond, and why it’s vital to work with a PayFac like. This allows the businesses under the payfac’s umbrella to focus on their core operations rather than deal with the complexities of the. While an ISO product will sometimes take weeks to approve a merchant due to the more stringent and quite often paper-based application process, PayFacs are able to. In this model, the issuer (having the relationship with the cardholder) and the acquirer (having the relationship with the Merchant) is the same entity. The biggest downside to using a PSP is cost. 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. Read article. However, the setup process might be complex and time consuming. Table of Contents [ hide] 1. Blog. The monitoring process ensures that there are no anomalies and in cases of unlawful activities, suspensions are placed. The payment facilitator works directly with the. To put it another way, PIN input serves as an extra layer of protection. What’s The Difference Between A PayFac vs ISO? Posted at 11:39 am in Fundraising, Payment Processing. Risk management. For businesses, the difference between using payfac-as-a-service compared to becoming a payfac comes down to time, cost, and risk. One of the main benefits to adopting the Payfac ® model is the increase in revenue you get from each transaction processed using your software. The merchant interacts directly with the ISO and follows their set processes to register and become. An ISO is a sales partner for payment processors, while a payment facilitator offers payment processing services to merchants by aggregating them under one master account. There’s not much disclosure on the ‘cost of sales’ (i. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. ”. You own the payment experience and are responsible for building out your sub-merchant’s experience. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. 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. Until recently, SoftPOS systems didn’t enable PINs to be inputted. PayFac vs ISO: Contractual Process. 40% in card volume globally. In fact, ISOs don’t even need to be a part of the merchant’s contract. Payfac conducts oversight on all the transactions on its platform to ensure that all payments operate under legal and network regulations. So, what. Onboarding workflow. PayFac: How the Two Most Common Types of Payment Intermediaries Differ. The new PIN on Glass technology, on the other hand, is becoming more widely available. For example, an artisan. PayFac, which is short for Payment Facilitation, is still a relatively new concept. ISO: What Is the Optimal Integrated Payment Strategy in SaaS? Advertisement. Payment Facilitator (PayFac) vs Payment Aggregator. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. To fully understand the benefits of the payment facilitator model, it’s important to first take a look at what goes into creating a standard payment processing agreement. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payfac: What’s the difference? Independent Sales Organization (ISO) is a third-party entity that partners with payment processors or acquiring banks to facilitate merchant services. You must be logged in to post a comment. It is when a business is set up as a primary merchant account and provides payment processing to its sub-merchants. ISO, so you can choose one of the two, or you’re looking for a PayFac solution for your business. payment processor question, in case anyone is wondering. At the same time, more companies are implementing PayFac model and establishing PayFac payment gateway partnerships. 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. 3. 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 main difference between a payment aggregator and a PayFac is the type of merchant ID (MID) used to differentiate accounts. By viewing our content, you are accepting the use of cookies. April 12, 2021. Payment Processors are responsible for authorization, authentication, data security, settlement, clearing, and reporting services, while ISOs focus on sales, marketing, merchant support, customer. However, much of their functionality and procedures are very different due to their structure. New Zealand -. They provide services that allow software platforms to accept credit and debit card payments and make it easier and faster for them to start accepting payments as they handle most of the work for you. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. Jun 29, 2023. The choice between a PayFac and a payment processor depends on your business needs, industry, and desired level of support. The payment facilitator, or “PayFac”, model of merchant acquiring is growing extremely rapidly. ) paying Toast, or Revel, or Clover FOREVER is a tough pill to swallow. All ISOs are not the same, however. You see. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. With companies like Stripe, Square and PayPal pioneering the payment facilitator or “PayFac” model, the era of Integrated Payments 2. But a lot has. You own the payment experience and are responsible for building out your sub-merchant’s experience. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. The arrangement made life easier for merchants, acquirers, and PayFacs alike. In short, a PayFac or payment facilitator, is a master merchant that supports sub-merchants. PayFac-as-a-service delivers a competitive payment program with instant onboarding of merchants while creating a seamless customer experience. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Becoming a full payfac typically requires an agreement with a sponsoring merchant acquirer such as Worldpay, registering as a payfac with the card networks, becoming compliant with the Payment Card Industry Data Security Standard (PCI DSS. Payment Facilitator vs ISO. However, the setup process might be complex and time consuming. They provide the systems and technology that process transactions. Another distinction between PayFacs and ISOs is in the “fine print. This relatively new payfac business model is experiencing rapid growth. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. The first is why we say that “data is the. For example, an. To photographers, it describes the light sensitivity of a differential camera or a piece to picture. A payment processor is a company that works with a merchant to facilitate transactions. What’s The Difference Between A PayFac vs ISO? Posted at 11:39 am in Fundraising , Payment Processing As intermediary technologies between a payment system and merchant, Independent Sales Organizations (ISOs) and Payment Facilitators (PayFacs) serve a very similar purpose. This model is ideal for software providers looking to. ISO vs. Payfac Pitfalls and How to Avoid Them. 5. For example, an. May 24, 2023. PayFac vs ISO: When Does One Make Sense over The Other? Add comment. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. A payment facilitator (payfac) is a service provider for businesses that simplifies the merchant-account enrollment process. 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. By viewing our content, you are accepting the use of cookies. next-level service: 24/7, every day of the year. Enabling businesses to outsource their payment processing, rather than constructing and maintaining their own. Can an ISO survive without becoming a PayFac? Becoming a PayFac (i. PayFac: Key Differences & Roles in Payment ProcessingPayFac vs ISO. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. 1 billion for 2021. Payfac = a software product, platform, or marketplace that has in integrated payments into its product, and is responsible for the risk of transactions processed by its customers. However, the setup process might be complex and time consuming. Both offer companies a means of accepting and processing payments, and while they may appear to be the same, they are. However, the setup process might be complex and time consuming. For some ISOs and ISVs, a PayFac is the best path forward, but. If the intermediary entity, which funds the sub-merchants, uses different MID for each merchant, it is called a payment facilitator. Click here to learn more. FIS’ rival, Fiserv, acquired the remaining stake of Finxact for $650 million, while another company, Fintech Amount, bought Linear for $175 million. For example, an. A payment processor is a company that works with a merchant to facilitate. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. So, revenues of PayFac payment platforms remain high. merchants look at the long-term TCO on buying vs. Some ISOs also take an active role in facilitating payments. Wide range of functions. However, the setup process might be complex and time consuming. These companies have proven to the acquiring bank they can satisfy those regulatory requirements and, as a result, may board as many of the SaaS’s. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. In other words, processors handle the technical side of the merchant services, including movement of funds. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Depending on your processing volumes there are two different types of merchant accounts that you will qualify for, either a PSP and an ISO. An ISO (Independent Sales Organization) is similar to a PayFac in a lot of ways. If you want to take a full revenue model opposed to a commission based model anyway. It runs about 40 minutes (really shooting to be less than 30) and we discuss the differences in payfac vs ISO and where payfac is heading. ISVs create software for companies in the payments industry. Can an ISO survive without becoming a PayFac? Becoming a PayFac (i. While all of these options allow you to integrate payment processing and grow your. For example, an. However, the setup process might be complex and time consuming. While both types of merchant account providers can assist you with equipment and services, an ISO will provide you with your own merchant account, whereas a. 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. While an ISO product will sometimes take weeks to approve a merchant due to the more stringent and quite often paper-based application process, PayFacs are able to approve. In a new series, Rich Aberman, co-founder of WePay, and Karen Webster set the record straight on what a PayFac is and isn’t, how a company can become one (and what it costs), the value equation. 00 Retains: $1. Very few PayFac as Service providers publish pricing to sub PayFac’s and there is a reason. Payment Facilitator. One of the key differences between PayFacs and ISO systems is the contractual agreement. At first it may seem that merchant on record and payment facilitator concepts are almost the same. Payment facilitation, or “payfac,” continues to grow in popularity among software providers and is designed to facilitate payment card acceptance without requiring individual merchants to go through the lengthy process of establishing traditional merchant accounts. Hardware and Software. PayFacs perform a wider range of tasks than ISOs. Ongoing Costs for Payment Facilitators. ; For now, it seems that PayFacs have. Most important among those differences, PayFacs don’t issue. You may have also heard the name “Member Service Provider (MSP)”, which is the term Mastercard uses to call ISO. For example, an. Payment facilitation (Payfac) is a service that allows businesses to accept payments from their customers in a variety of ways. Our belief remains that all payfacs will inevitably write directly to the networks and avoid the processors for so many reasons. Also, unlike an ISO, the PayFac provides the processing services, settlement of funds, and billing to the merchant. 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. An ISO, or independent sales organization, is a company that resells payment services to merchants on behalf of a payment processor or acquiring bank. ISO are important for your business’s payment processing needs. For example, an artisan. The terms aren’t quite directly comparable or opposable. PayFacs vs ISOs. PayFac-as-a-service delivers a competitive payment program with instant onboarding of merchants while creating a seamless customer experience. Learn more: PayFac vs ISO: which one to choose for your business? Benefits of becoming a PayFac. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. The PayFac must properly follow KYC practices and correctly assess the sub-merchants as all transactions can be aggregated under a single merchant ID. Lower. PayFacs take care of merchant onboarding and subsequent funding. One is an ISO or independent sales organization, and another is a PayFac or payment facilitator. THIRD PARTY AGENT An entity that provides payment related services on behalf of a Visa Client. Independent sales organizations (ISOs) and payment facilitators (PayFacs) both act as intermediaries between merchants and payment processors, making them parallel channels in the overall payments ecosystem. In a similar manner, they offer merchants services to help make the selling process much more manageable. Besides that, a PayFac also. Payfac and ISO models involve much more regulatory and compliance overhead than payfac-alternative models. In other words, ISOs function primarily as middlemen. PayFacs provide a similar service to standard merchant accounts, but with a few important differences. Otherwise, you can use an independent sales organization (ISO), which allows for higher volume but can create delays in transaction times. Even better? Funds are settled to the PayFac’s account and it’s determined by the PayFac to move those funds to the merchant. Payfac as a Service providers differ from traditional Payfacs in that. 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. Payfacs are registered independent sales organizations (ISOs) that have been sponsored by an acquiring bank. In this hybrid payment facilitation model, the Payfac payment service provider becomes a Payfac with Sponsor Banks; they act as a master merchant account and are able to set up sub-accounts for merchants same-day. Payment facilitator model is a lucrative option for many present-day companies. We get white glove treatment from Global Payments Integrated—they put clients first. . When choosing between a Payment Facilitator (Payfac) and a Merchant of Record (MoR) for your business, several key factors should be carefully considered: 1. A guide to marketplace payments. Gross revenues grew considerably faster. The new PIN on Glass technology, on the other hand, is becoming more widely available. or by phone: Australia - 1300 721 163. They’ll listen to you and guide you in developing the solutions your customers want and need. Lower. PayFac vs. They offer payments to their merchant customers, known as submerchants, through their own links with payment processors. agent A specified good or service is a distinct good or service (or a distinct bundle of goods orBy setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Payment Facilitator. The PayFac model has gained popularity in recent years, as it allows businesses to simplify their payment processing and reduce costs, while also providing a better customer experience. 1) A PayFac always acts on sub-merchant’s (retailer’s) behalf, while an MOR might be the actual retailer. This means that there is no need for any charges between the issuer and the acquirer. Registering as a payment facilitator (PayFac) or independent sales organization (ISO) have become popular options for SaaS companies looking for a comprehensive payment strategy. However, the setup process might be complex and time consuming. On. Anti-Money Laundering or AML. Now let’s dig a little more into the details. ISO Versus the PayFac Payment Model. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. This was around the same time that NMI, the global payment platform, acquired IRIS. a Payment Service Provider (PSP), aka a Payment Facilitator (PayFac). Browse Payfac, SaaS and SaaS Payments content selected by the SaaS Brief community. By viewing our content, you are accepting the use of cookies. In recent years payment facilitator concept has been rapidly gaining popularity. Typically, the ISO stays out of the contract between the two and instead focuses on the relationship with the payment processor. Avoid the slow, manual sub-merchant onboarding with other payfac solutions, and offload your payments compliance obligations to Stripe. I/C Plus 0. The most important difference between a PayFac and an ISO is that PayFacs “own” their merchants – entering into direct contracts with them (albeit on behalf of an acquiring partner. ISO does not send the payments to the merchant. Global Electronic Technology, Inc. When you want to accept payments online, you will need a merchant account from a Payfac. MSP = Member Service Provider. For example, an. However, the setup process might be complex and time consuming. PayFac vs ISO is an illustrative example of natural selection and adaptation in the fintech world. ISO vs. See moreWhat is a payment facilitator (payfac)? What is an independent sales organization (ISO)? What are the differences between ISOs and payfacs? Do I need an. ISO serves as an intermediary between merchants and acquiring banks, taking responsibility for essential functions such as merchant onboarding, sales. Becoming a payment facilitator is a change to your operational and support models, has and it pays long-term benefits. PayFac vs ISO: Weighing Your Payment Options . Clover vs Square. Square has been one of the most disruptive technology companies in the past decade, yet they recently caught the media’s attention for the wrong reason. 2. This is. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. It assumes liability for losses or non-compliance. ISO vs. Instant merchant underwriting and onboarding. ISOs mostly resell merchant accounts, issued by multiple acquiring banks. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Generally speaking, you will. You see. ISO vs. 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. It is when a business is set up as a primary merchant account and provides payment processing to its sub-merchants. 20 (Processing fee: $0. Here’s how Visa defines payment facilitators and sponsored merchants: “PayFac or merchant aggregator, a payment facilitator is a third party agent. PayFac vs ISO: 5 significant reasons why PayFac model prevails. Toward the average human, ISO is the acronym employed by the Global Organization for Standards. Owners of many software platforms face the need to embed. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. In addition to serving as Payroc ’ s SVP Payfac Trusty,. PayFac vs Payment Processors. PayFac vs ISO: When Does One Make Sense over The Other? Now’s Your Chance to Suggest 2020 Article Topics. Acquiring Bank. However, they do not assume. An ISO or acquirer processes payments on behalf of its clients that are call merchants. ISVs lease or sell their software, earning their money by providing Software-as-a-Service. What’s the Difference? Before payment facilitators began enabling smaller merchants to accept payments, acquiring banks relied on another. Relationships of modern humans with other human species, such as Neanderthal etc, ranged from killing and eating each other to interbreeding. The ISO is an intermediary signing up the merchants for the acquirer’s payment processing services. Processor relationships. However, the setup process might be complex and time consuming. What is a merchant of record? Read article. Merchants need to understand these differences, so they can decide which of these options may be better suited for their business. 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. Payment facilitator model is suitable and effective in cases when the sub-merchant in question is a medium- or large-size business. 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. Payment facilitators conduct an oversight role once they have approved a sub merchant. This is because PayFacs or master merchants must have a market or domestic entity wherever they are providing. 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. For example, an. For example, an. As a seasoned global executive with strategic leadership experience across banking, #. For example, an. However, much of their functionality and procedures are very different due to their structure. Cancel reply. As a result, PayFac or ISO must accept a higher level of accountability, which in the case of PayFacs maybe 100%. However, the setup process might be complex and time consuming. The ISO is an intermediary signing up the merchants for the acquirer’s payment processing services. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. becoming a payfac. What’s the Difference Between a Payment Facilitator, a Payment Processor, and an Independent Sales Organization (ISO) At a glance, a facilitator, a processor, and an ISO may seem to be similar, but the differences are notable. Maybe you want to learn about PayFac vs. PSPs, including PayFacs, are entities, to which acquiring banks and payment network providers delegate merchant lifecycle management functions in. 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. ” A PayFac can have a two-party agreement, meaning it enters into a direct contractual relationship with its merchants (with or without a. Sometimes a distinction is made between what are known as retail ISOs and. 05 per transaction + $6 per monthly active account. The PayFac is the merchant of record for transactions. However, the setup process might be complex and time consuming. While there are advantages to taking on high risks, such as greater flexibility. For example, an artisan. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. The acquirer receives funds from the issuer and pays them into the master merchant account of the PayFac.