#payfac

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What is Payment Facilitator + Key Challenges to Overcome

Article covers what payment facilitator is, how the payment facilitation model works, and the benefits of leveraging third-party payment facilitation expertise.

What is a Payment Facilitator and Why They are Key for Growing Companies? Payment facilitators are a central pillar of successful businesses, and in this guide, we’ll cover everything there is to know about the topic.

Here are some of the key points we will cover:

What is a payment facilitator?

How does the payment facilitation model work?

What are the primary functions within payment facilitation?

What are the challenges of becoming a payment facilitator?

What is PayFac as a service, and how can it help companies overcome common payment facilitation challenges?

What is a payment facilitator? A payment facilitator, also called a PayFac, is an entity that helps companies accept electronic payments from customers via multiple channels by quickly onboarding them as submerchants. Thus, the company can use the PayFac’s infrastructure to easily collect payments from its customers while the PayFac manages all administrative and technical aspects of the infrastructure.

How does the payment facilitator model work? The payment facilitator model simplifies the way companies collect payments from their customers. It also helps onboard new customers easily and monetizes payments as an additional revenue stream.

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Everyone knows the rewards of payment facilitation. That’s why it’s an attractive prospect for SaaS businesses in vertical industries looking to grow, build value, and gain more control over their user experience.

All the upside does come at a cost, though. The risks you take as a payfac are complex and wide-ranging, from compliance, fraud, and PCI to card regulations and merchant due diligence.

Succeed, and the rewards can be significant. On the other hand, fail, and you could pay a hefty price. It’s a balancing act between how much risk you’re willing and able to take and the rewards you want to attain. Once you find that balance, it can impact your decision to become a payfac and which business model you ultimately choose.

So, what are the significant risks you face as a payfac? Let’s take a look.

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8 Ways to Attract Merchants Using a PayFac-as-a-Service Solution | CustomerThink

PayFac, or payment facilitation as a service, offers a different software platform to onboard new users and monetize payments. Additionally, the platform acts as a merchant account that sets up the sub-accounts for end users.

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We help you solve complex payment challenges so your business can rapidly scale, quickly launch, and monetize payments.

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Managed PayFac or Managed Payment Facilitation

A  Payment Facilitator [Payfac] https://www.agilepayments.com/managed-payfac is essentially a Master Merchant

that processes credit and debit card transactions for sub-merchants within their payment application.

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Managed PayFac : Options for SaaS platforms to leverage payments as revenue drivers

Managed PayFacs https://www.agilepayments.com/managed-payfac can be thought of as “sub PayFacs.” A true PayFac

assumes all of the compliance, regulatory and infrastructure costs. These costs can easily exceed 100k.

The Managed PayFac option creates a platform for you to leverage these tools and have your business act as a sub

PayFac without the significant time and expense of a true PayFac.

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What is a Payment Processing Partnership?

While there can be some subtle differences on a case-to-case basis, a payments partnership is an agreement with a processing organization to share revenue in return for the leverage the merchant organization brings by way of their application-using market base. There can be other things provided by the processing organization outside of their typical duties like boarding and customer support, but revenue generation to the SaaS organization is a driving factor. Visit for all information at https://www.agilepayments.com/

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https://www.agilepayments.com/

For the SaaS provider, potential advantages in becoming a Payment Facilitator are compelling: payment facilitation drives ease in client onboarding and unlocks a new stream of revenue generation.

The ability to bypass onboarding friction by enabling customers to immediately accept credit cards through your app is a competitive differentiator. As well, customers’ ability to forgo burdensome application processes drives up your engagement and adoption. These dynamics mean more revenue derived from the payment facilitation solution.

But payment processing is inherently risky, even on the traditional merchant processor level.  

Those risks are compounded exponentially for a SaaS organization who becomes a payment facilitator, particularly one with a high volume client base that processes primarily subscriptions on credit card transaction basis.  

Knowing your customer is critical. Chargebacks are of critical concern, and ultimately it’s the SaaS company that carries the burden on them.  While the benefits of payment facilitation are attractive, without the compliance and supporting infrastructure, the risks can quickly compromise the engagement. In some cases it’s worth exploring a hybrid facilitation model where underwriting and compliance concerns are transferred, while opportunities for revenue generation remain. Contact Agile Payments as [email protected] to explore your options

Becoming a PayFac or Payment Facilitator: What can go wrong?

For the SaaS provider, potential advantages in becoming a Payment Facilitator are compelling: payment facilitation drives ease in client onboarding and unlocks a new stream of revenue generation.  

Contact Agile Payments as [email protected] to explore your options