When Payment Facilitation first came into the spotlight, many viewed the model as too high risk. Over the years, the payment facilitation market has shown extreme growth because it benefits the entire payments ecosystem, such as banks, card brands, merchants, and consumers. According to Research Firm Statista, the estimated payfac transaction volume is projected to reach $513 billion by this year.
Before PayFac was introduced, many small merchants struggled to offer their customers a digital payment solution that larger companies were able to provide. Today, Payment Facilitators are able to provide small merchants with a better payment experience. VISA and Mastercard have helped make this transition easy by embracing PayFac and removing digital payment acceptance barriers for small merchants.
Companies of all sizes are starting to become Payment Facilitators after discovering the benefits. PayFacs, such as Stripe and Shopify, Inc., have found that offering a seamless path to electronic payment acceptance helps grow digital payments. Worldwide organizations are becoming PayFac’s to deliver a better payment experience, increase revenues, and improve business valuations.
This successful payment model also helps acquirers. Payment Facilitation provides the opportunity to expand transaction volumes, cut the cost of doing business, and offset risks. Becoming a PayFac requires taking on underwriting risk, in return for a larger portion of the payments stream, which can boost net revenue by 20% to 50%. Today, it’s not surprising that businesses are realizing they can provide a better experience for consumers, while getting a greater return in revenue and business valuations by becoming a Payment Facilitator.