Owners of businesses are charged with making a host of tough decisions. One of the most critical decisions a business owner faces is how payments will be accepted for products and services. While traditional merchant account services are provided by an independent sales organization (ISO), more modern and effective sub-merchant account services (Payment Facilitators) make payment processing more effective than ever before.

Payment Facilitators (PayFac)

Payment Facilitators, or PayFacs, are sub-merchant accounts for merchant service providers to provide payment processing services to their own merchants. With this system, a PayFac can offer merchant services in a highly efficient manner. The PayFac is exempt from underwriting all merchants upfront and is instead underwriting merchants as transactions are processed on an ongoing basis. 

Payment Model For The Digital Age

Technology is ever-expanding how business is conducted, and payment processing is one such aspect improved by the digital age. New technology has made it possible to integrate payments and software, resulting in a proliferation of recent trends and opportunities. Some examples of these opportunities are mobile payments and the now popular contactless payments.

Why Payment Facilitators Make Sense Today

PayFacs have evolved from the merchant services market, primarily in response to the high demand for more streamlined processing. In contrast to other intermediaries, PayFacs relieve acquirers from performing specific administrative procedures such as merchant underwriting. Most PayFacs act as software and service (SaaS) providers, allowing them to extend a vertical solution suite as part of their service packages. 

How Payment Facilitators Work

In contrast to an ISO, PayFacs use an underwriting tool that evaluates data and gives approval in real-time. This immediate transfer of information and support provides the merchant with greater control over the payment processing. Fund settlement and movement time are increased, and fraud issues and chargebacks are the responsibility of the PayFac. 

Advantages Of Using A Payment Facilitator

While there are many advantages to be enjoyed by using a PayFac, business owners agree that the system itself has boosted their ability to manage payments more efficiently. Still, instant onboarding, ease of access to sub-merchant accounting, billing and statements, reconciliation reporting, and automated chargeback importation make using a PayFac a wise business decision. 

For any enterprise searching for a streamlined payment processing platform, the Payment Facilitator model is sure to be a wise choice to manage a vital aspect of business operations.