Traditional Payment Facilitators (PayFacs) are able to record the revenue of all processing and be considered the merchant of record as they board partners and merchants. Payfacs also have full control of the pricing setup, branding and disbursement of funds. Taking on responsibility as a payfac involves underwriting and compliance of your portfolio, and taking on risk. With a secure system and these tips, you can take on risk with confidence and experience the full benefits of becoming a PayFac.

  • Know Who Your Customers Are

As Payment Facilitators underwrite and onboard merchants, it is important that they know who their merchants and customers are. PayFacs are required to follow Know Your Customer (KYC) requirements, which say that institutions must verify their customers identities that wish to open accounts. They are also required to monitor and record any suspicious activity coming from their customers. With all of these regulations and requirements in mind, Payment Facilitators can streamline the onboarding process while still meeting their responsibilities to protect the payment system.

  • Prevent Fraud More Efficiently

The potential for fraud is high in online transactions, but by implementing the right tools and processes, you can keep your business and customers secure. The first step to help prevent fraud is monitoring transactions and reconciling your bank accounts daily. Most PayFac solutions have tools in place to monitor when unusual transactions or chargebacks are made. You should also set custom rules and limits for the number of purchases and dollar amounts` based on the normal daily transactions in your business. Businesses should also use AVS and CVV verification tools to ensure credit card transactions are authentic, most payment processing solutions include these tools.

  • Get Notified in Real Time with Automated Alerts

If you want to be on top of everything that is happening in your business and know when there is a problem before your customers do, then you need real time automated alerts. An automated monitoring system can notify you as soon as a problem happens and even notify you if something doesn’t happen – when it should. Real-time alerts can help your business reduce risk and feel better knowing your payments system is always monitored.

  • Implementing a Compliance Program

Payment Facilitators should implement a compliance program to ensure all regulations are being followed. To ensure the most effective compliance program, you must apply an ongoing process that correlates with your organizations ethics and values. This program will also educate individuals within the organization to be aware of the expectations to do the right thing involving the payments process.

  • Ongoing Merchant Due Diligence and Monitoring

Merchant due diligence and monitoring is a key factor for any business processing credit card payments. It is important to ensure illegal transactions are not injected into your payment system. Having specific policies in place to onboard and monitor merchants will help reduce risk associated with merchants. By applying due diligence and monitoring regulations, you keep scammers out of the credit card ecosystem and ensure payment processors take quick action if there is ever unusual activity.