For example, an artisan. PayFac vs ISO: Contractual Process. Cancel reply. San Jose California Equipment Maintenance Agreement with an Independent Sales Organization. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. Payfac as a Service is the newest entrant on the Payfac scene. The PayFac aggregates transactions and sends them to their processor, keeping operations streamlined. Payfac is a contracted Independent Sales Organisation (ISO), so they have the responsibility to manage their own sales agents and underwriters and adhere to the rules of the card associations. B2B. Rather then setting up each of their clients with their own merchant account, the Payfac lets them piggyback on the Payfac’s account. 00 Payment processor/ merchant acquirer Receives: $98. To help us insure we adhere to various. becoming a payfac. However, the setup process might be complex and time consuming. Avoiding The ‘Knee Jerk’. Want to know the difference between ISO and payment facilitator? ️ Read this summary to find out why payment facilitator concept has been rapidly gaining popularity. And this is, probably, the main difference between an ISV and a PayFac. A PayFac is one of the types of a payment service provider (PSP). Although each of these methods offer their own distinct advantages, understanding how they differ and which option is right for your specific. Payment facilitators, aka PayFacs, are essentially mini payment processors. The ISVs that look at the long. The most important difference between a PayFac and an ISO is that PayFacs “own” their merchants – entering into direct contracts with them (albeit on. Merchants get underwritten more efficiently, while acquirers are relieved of some merchant services, delegated to PayFacs for a reward. What is a payfac? A payfac, short for payment facilitator, is a type of provider in the payments industry that simplifies the process for other businesses to accept credit and debit card payments. PayFac: How the Two Most Common Types of Payment Intermediaries Differ. In fact, when a merchant is seen as potentially liable for fraudulent activity, an ISO and/or processor are sometimes named as codefendants, along with people at the ISO or processor who. ISV: An Independent Software Vendor (ISV) is a company that creates and sells software. agent A specified good or service is a distinct good or service (or a distinct bundle of goods orA payment processor serves as the technical arm of a merchant acquirer. New Zealand -. Payfac-as-a-service vs. One of the main benefits to adopting the Payfac ® model is the increase in revenue you get from each transaction processed using your software. With Visa, you’ll be applying to be a registered ISO, but with Mastercard, you’ll technically be applying to be a registered MSP, or member service provider. 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 other words, processors handle the technical side of the merchant services, including movement of funds. You own the payment experience and are responsible for building out your sub-merchant’s experience. These companies include owners of SaaS platforms, franchisors, ISO, marketplaces, and venture capital firms. This series, “Just the FACs,” tracks the development and progression of ISVs and PayFacs. By owning these operational components,. It also must be able to. Start earning payments revenue in less than a week. For example, an. PayFacs take care of merchant onboarding and subsequent funding. PayFac vs ISO: which one to choose for your business? Read article. Table of Contents [ hide] 1. Reduced cost per application. 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. You must be logged in to post a comment. They offer payments to their merchant customers, known as submerchants, through their own links with payment processors. Both PayFacs and ISO’s (independent sales organizations) act as intermediaries between merchants and payment processors . Sub-merchants sign an agreement with the PayFac for payment. Payfac is the abbreviated term often used in the payments industry to describe a company that provides payment processing services to. Software users can begin. 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. 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. Very rarely, said Mielke, do ISVs win with the “knee-jerk reaction of becoming a PayFac and capturing those additional revenues. And this is, probably, the main difference between an ISV and a PayFac. responsible for moving the client’s money. However, the setup process might be complex and time consuming. In contrast, a PayFac is responsible for the submerchants. This model is ideal for software providers looking to. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. A PayFac provides credit card processing services to merchants on behalf of a bank or other. It would register the merchant on a sub-merchant account and it would have a contract with the acquiring bank. Partnering with a PayFac-as-a-Service provider leaves the technical work like coding, compliance monitoring, and payment integration to industry. Both the PayFac and ISO acquisition models have unique benefits and drawbacks. This also means the Payfac assumes the merchant’s credit liability, but they diversify this risk by aggregating a large pool of merchants under them. Software users can begin. ISOs mostly resell merchant accounts, issued by multiple acquiring banks. Ongoing Costs for Payment Facilitators. For example, an. However, the setup process might be complex and time consuming. As he noted, among the firms that most commonly move down the PayFac path – ISOs, ISVs and platform businesses – the benefits stand out quite brightly: easier. Onboarding process Today’s PayFac model is much more understood, and so are its benefits. A payment processor is a company that works with a merchant to facilitate transactions. By viewing our content, you are accepting the use of cookies. payment processor question, in case anyone is wondering. It assumes liability for losses or non-compliance. 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. Indeed, PayFac model is a beneficial solution for merchants, acquirers, and, of course, payment facilitators themselves. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. This can include card payments, direct debit payments, and online payments. Wide range of functions. The Job of ISO is to get merchants connected to the PSP. One classic example of a payment facilitator is Square. A. This was around the same time that NMI, the global payment platform, acquired IRIS. In this post, we break down the differences between a few of the most common routes you can take when it comes to integrated payment models: independent sales organization (ISO), full-fledged payment facilitator (PayFac), or PayFac-as-a-Service (PFaaS) models. Payment facilitator model is a lucrative option for many present-day companies. 1. When accepting payments online, companies generate payments from their customer’s debit and credit cards. What’s the difference in an ISO and a PayFac? While an ISO merely connects a merchant to a bank, a PayFac owns the full client experience. The arrangement made life easier for merchants, acquirers, and PayFacs alike. I/C Plus 0. Marketplace vs ecommerce platform: What's the difference? Read article. implementation of a payment facilitator model) calls for getting certified as one by the respective acquirer, and for. 3. ISVs create software for companies in the payments industry. PayFac vs ISO: When Does One Make Sense over The Other?In this article, you'll get an in-depth analysis of the pros and cons of #PayFac vs. You own the payment experience and are responsible for building out your sub-merchant’s experience. The merchants can then register under this merchant account as the sub-merchants. 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. 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. 收单行收取费用，有时称为Merchant Discount Rate ， 该费用通常为每笔交易额的百分比。复杂之处在于，一般收单行收取的总交易费用可以分为多个不同部分，由. PSPs, including PayFacs, are entities, to which acquiring banks and payment network providers delegate merchant lifecycle management functions in. For example, an artisan. A payfac or PF, short for payment facilitator, makes it possible for you to accept payments from customers in a variety of ways, including card payments,. The payment facilitator works directly with the. The main difference between these two technologies,. next-level service: 24/7, every day of the year. May 24, 2023. Aug 10, 2023. Next-generation ISO (or next-gen ISO) is a. One is an ISO or independent sales organization, and another is a PayFac or payment facilitator. However, the setup process might be complex and time consuming. ISOs never directly touch a merchant’s money as the money will flow directly from the payment processor to the merchant’s merchant. Since it is a franchise setup, there is only one. The PayFac must properly follow KYC practices and correctly assess the sub-merchants as all transactions can be aggregated under a single merchant ID. . 3. There’s not much disclosure on the ‘cost of sales’ (i. An ISO is a third-party company that refers merchants to acquiring banks or payment service providers. Even better? Funds are settled to the PayFac’s account and it’s determined by the PayFac to move those funds to the merchant. ISOs never directly touch a merchant’s money as the money will flow directly from the payment processor to the merchant’s merchant. 07% + $0. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. For example, an. In recent years payment facilitator concept has been rapidly gaining popularity. Often, ISVs will operate as ISOs. This means that a SaaS platform can accept payments on behalf of its users. Blog. Otherwise, you can use an independent sales organization (ISO), which allows for higher volume but can create delays in transaction times. Moreover, integrating a payfac solution into ISV’s software removes the need for a merchant to create a relationship outside of the software with acquiring banks or payment gateways. In other words, ISOs function primarily as middlemen. Payment facilitator model allowed all categories of entities to benefit: merchants received fast and smooth underwriting, acquirers could save resources and service larger numbers of merchants. But of course, there is also cost involved. Article September, 2023. The ISVs that look at the long. PayFac vs. In short, a PayFac or payment facilitator, is a master merchant that supports sub-merchants. When PayFac became a buzzword among software platforms and the many businesses trying to sell to them, the meaning of the word started to blur. (GETTRX) is a registered ISO/MSP/PSP/Payment Facilitator for Merrick Bank, South Jordan, UT, FDIC insured. Swipesum data all you need in know about Payfac vs ISO. The ISO acts as an intermediary between the merchant and the payment processor, taking care of merchant recruitment, sales, and ongoing merchant support, while the processor handles transactions behind the scenes. For example, an artisan. PayFac vs ISO. The key aspects, delegated (fully or partially) to a. Worldpay was one of the first processors to offer payfac extensibility. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. #ISO registration. 70. the PayFac Model. accounting for 35. Until recently, SoftPOS systems didn’t enable PINs to be inputted. An ISV can choose to become a payment facilitator and take charge of the payment experience. Also take a look at some of the primary regulations payfacs face, such as those from the Financial Crimes Enforcement Network, Office of Foreign Assets Control, and USA PATRIOT Act. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Modern PayFacs find it more profitable to integrate with just one processor/gateway and provide merchant processing services (onboarding, chargeback. While all of these options allow you to integrate payment processing and grow your. Unlike PayFac technologies, ISO agreements must include a third-party bank to sponsor the contract. NPC is Vantiv's nationwide ISO merchant distribution business serving over 220,000 small-to-medium-sized merchants. 5. Software companies that focus on specific verticals, such as healthcare or childcare, are natural PayFac candidates. Below the ‘ISO agent’ chunk of the pyramid would be the shopkeepers and then the customers [email protected]. • The acquirer has access to Payfac system to oversee their performance and compliance. 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. ISOs rely mainly on residuals, a percentage of each merchant transaction. Payfacs are registered independent sales organizations (ISOs) that have been sponsored by an acquiring bank. Payment Facilitator. This. 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. PayFac: How the Two Most Common Types of Payment Intermediaries Differ. A merchant of record is an entity that accepts cardholders’ payments and assumes liability for processing of these payments on the merchant’s behalf. While an ISO, or independent sales organization, is similar to a Payfac, there are some key differences. 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. Offering similar services to popular payment processing tools like Stripe and PayPal, PayFac is a third-party merchant service provider. You see. 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. All in all, the payment facilitator has the master merchant account (MID). In essence, they become a sub-merchant, and they face fewer complexities when setting. PayFac vs Payment Processor. 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 payments landscape has changed a lot in the last 20 years and your customers deserve modern payment processingInfinicept provides the method by which to monitor for these transactions within its exception reporting capabilities. ISOs. Both offer ways for businesses to bring payments in-house, but the similarities end there. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Merchants need to understand these differences, so they can decide which of these options may be better suited for their business. What is a merchant of record? Read article. subscribing, and for some of these “old heads” (I’m in that group…. Classical payment aggregator model is more suitable when the merchant in question is either an. 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 relatively new payfac business model is experiencing rapid growth. However, the setup process might be complex and time consuming. For example, an. 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. Besides that, a PayFac also. ISO serves as an intermediary between merchants and acquiring banks, taking responsibility for essential functions such as merchant onboarding, sales. To learn more about the differences between these payment models, see our blog: PayFac vs ISO: Weighing Your Payment Options. Square, Stripe, PayPal, AirBnB and Uber are well-known examples of PayFacs. This is because the per-transaction payment processing rates are typically better for merchant accounts—as opposed to sub-merchant accounts. 05 per transaction + $6 per monthly active account. Stripe’s payfac solution. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. 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. Examples of Payment Facilitators. For example, an. If your rev share is 60% you can calculate potential income. On. A payment facilitator (or payfac) is the owner of a master merchant identification number who registers merchants as sub-merchants and enables their payment acceptance. VC Funding Hit a 5+ Year Low in Q1’23: CBInsights and Carta vs. PayFacs provide a similar service to standard merchant accounts, but with a few important differences. PayFac vs. 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. 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. One classic example of a payment facilitator is Square. To learn more about the differences between these payment models, see our blog: PayFac vs ISO: Weighing Your Payment Options. PayFac-as-a-service delivers a competitive payment program with instant onboarding of merchants while creating a seamless customer experience. This allows faster onboarding and greater control over your user. 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. 4. Onboarding workflow. 20 (Processing fee: $0. In 2021, global payment facilitators processed over $500 billion in transactions – a 75% increase over the previous year. Contracts. For example, an artisan. Our PayFac platform offers secure integration. Payment facilitation requires the master merchant (usually the software provider) to take legal and financial responsibility for the transaction that occur under the primary merchant. At first it may seem that merchant on record and payment facilitator concepts are almost the same. But to banks and merchants it. “You’re giving the payment facilitator the rights to generate liability that you as the bank are going to be responsible for,” Spalinger said. In order to provide a plausible explanation, we need to understand the evolution of the merchant services industry. Fast, efficient boarding solutions that orchestrate third-party and internal systems to help you turn prospects to customers – face-to-face, on the phone, or online. A Payment Facilitator or Payfac is a service provider for merchants. Stax Payments is thrilled to announce the appointment of our new Chief Executive Officer, Paulette Rowe. “So, your policies and procedures have to guide how you are going to. Smaller. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Difference #1: Merchant Accounts. One of the key differences between PayFacs and ISO systems is the contractual agreement. Toward the middle person, ISO is the acronym used by the International Arrangement for Standards. Blog. However, the setup process might be complex and time consuming. When you want to accept payments online, you will need a merchant account from a Payfac. However, payment processing can quickly become overwhelming and complicated, often leaving. To learn more about the differences between these payment models, see our blog: PayFac vs ISO: Weighing Your Payment Options. PayFac vs ISO: Contractual Process. The payment facilitator, or “PayFac”, model of merchant acquiring is growing extremely rapidly. While there are one lot of roles ISOs handle in that payments space, they Swipesum details all you must go know about Payfac vs ISO. We get white glove treatment from Global Payments Integrated—they put clients first. ” A PayFac can have a two-party agreement, meaning it enters into a direct contractual relationship with its merchants (with or without a. ISO are important for your business’s payment processing needs. Ensure that the ISO offers solutions that play nicely with the tools and platforms you’re using in your business. All ISOs are not the same, however. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Our payment-specific solutions allow businesses of all sizes to. 1. . In order to understand how. The Traditional Merchant Onboarding Process vs. June 26, 2020. Sometimes a distinction is made between what are known as retail ISOs and. On. As small business grows, MOR model might become too restraining, while payment facilitators provide robust APIs, which sometimes allow merchants to customize each function separately, according to their. Massive technological leaps have made it easier than ever for software providers to explore new opportunities and expand their offering, such as becoming a PayFac as a service. 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 could also work with an existing ISO and get a buy rate, then make X over that Buyrate but you wouldn’t be able to be in the agreement or have any access to claim the discount or. Under the PayFac model, a merchant is set up under the PayFac’s master account, but they are onboarded with their own unique MID. Becoming a payment facilitator is a change to your operational and support models, has and it pays long-term benefits. 1 comment. ISO Versus the PayFac Payment Model. A payfac is a type of payment aggregator, but it typically provides a more comprehensive suite of services. Some stay where they are (like, again, Uber or Amazon), while others decide to implement the PayFac model. In comparison, ISO only allows for cheque payments. For example, in an ISO relationship, you’re unable to customize the onboarding experience for your customers, but with managed payment facilitation, you can. The types of new entities an ordinary ISO can turn into include a PayFac, a wholesale ISO, a next-generation ISO, or a merchant services consultant. The payfac model is a framework that allows merchant-facing companies to. Until recently, SoftPOS systems didn’t enable PINs to be inputted. Whatever works best for them. It needs to obtain a merchant account, and it must be sponsored into the card networks by a bank. You must be logged in to post a comment. Payfac Pitfalls and How to Avoid Them. Though they seem similar on the surface, there are key differences in how they operate. This includes underwriting, level 1 PCI compliance requirements,. A payment processor is a company that works with a merchant to facilitate. 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 this article we are going to explain why payment facilitator model is becoming so popular (attracting more and more entities) while ISO model is gradually dying out, vacating the space for new payment facilitators. PayFac offers clients a choice if they wish to pay by cheque or bank transfer. Marketplace vs ecommerce platform: What's the difference? Read article. An ISO (Independent Sales Organization) is similar to a PayFac in a lot of ways. 1. Click at read more about what an OBO is and what it has to do with make processing! don’t provide any processing infrastructure, nor do they continually control any on their merchants’ money directly. (PayFac) Receives: $3. One of the most significant differences between Payfacs and ISOs is the flow of funds. The contract is typically between the sponsor and the merchant, but the ISO may sometimes be included in a three-party agreement. Payment processors do exactly what the name says. Most businesses that process less than one million euros annually will opt for a PSP. Understanding the Payment Facilitator model The payment facilitator model was created as a way of streamlining business’ processes in a way that would allow them to accept electronic. 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-as-a-Service helps you hit the ground running and quickly onboard customers while adhering to compliance standards. What’s the Difference? Before payment facilitators began enabling smaller merchants to accept payments, acquiring banks relied on another. Payment facilitation (Payfac) is a service that allows businesses to accept payments from their customers in a variety of ways. However, the setup process might be complex and time consuming. But how that looks can be very different. 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. 20 (Processing fee: $0. Once you have everything in order, you’re ready to apply to be a registered ISO with Visa and Mastercard. This means that there is no need for any charges between the issuer and the acquirer. However, the setup process might be complex and time consuming. PINs may now be entered directly on the glass screen of a smartphone using this new technology. For businesses, the difference between using payfac-as-a-service compared to becoming a payfac comes down to time, cost, and risk. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. That is why the model seems so attractive for different. For example, an. The enabler is essentially an acquirer in the traditional term. PayFacs work under one or more payment processors, operating in a layer of the industry between processors and merchants. ISOs and ISVs are both B2B providers, working with merchants and the companies who serve them. So, revenues of PayFac payment platforms remain high. The name of the MOR, which is not necessarily the name of the product seller, is specified by. If a marketplace or any other company (ISO, SaaS provider, ISV, franchisor, venture capital firm) decides that it is the right time for it to become a white-label or full-fledged PayFac, it can do so. But of course, there is also cost involved. But for this purpose, it needs to build a strong relationship with an acquirer that will underwrite it as a PayFac. Traditionally, a business that wanted to accept card payments would need to set up a merchant account with a bank, which can be a complex and time. a PSP/PayFac. While the. The biggest downside to using a PSP is cost. e. June 14, 2023 PayFac Vs. 0. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. In essence, PFs serve as an intermediary, gathering. Menda chats with Deana Rich about two main topics. PayFac vs Payment Processors. Industries. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. For example, if you’re selling in-store, then your ISO should offer you a point of sale software and. In this sub-merchant model, Payfac has a master merchant account under which merchants are signed up, as sub-merchants. 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. Just to clarify the PayFac vs. This allows faster onboarding and greater control over your user. This simplifies the onboarding process and enables smaller. At the same time, Paragon Payment Solutions assumes the majority of risk and responsibilities related to operational expenses, chargebacks,. For example, an artisan. Payment facilitators, aka PayFacs, are essentially mini payment processors. 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. Both aggregators and facilitators offer similar benefits from the perspective of the end-user. 3. Payment Processors and ISOs have a symbiotic relationship, with each party benefiting from the collaboration. PayFac vs ISO is an illustrative example of natural selection and adaptation in the fintech world. ISO: Key Differences & Roles In Payment Processing The world of payment processing has its fair share of acronyms, and two of the most popular are PayFac (Payment Facilitator) and ISO (Independent Sales Organization). Depending on your processing volumes there are two different types of merchant accounts that you will qualify for, either a PSP and an ISO. There are DEF benefits to. El ISO se encarga de facilitar la relación entre las dos partes y de conseguir que los comerciantes contraten una cuenta de vendedor. However, the setup process might be complex and time consuming. The tool approves or declines the application is real-time. Hardware and Software. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Estimated costs depend on average sale amount and type of card usage. Top content on Payfac, SaaS and SaaS Payments as selected by the SaaS Brief community. 9% and 30 cents the potential margin is about 1% and 24 cents. Enabling businesses to outsource their payment processing, rather than constructing and maintaining their own. PayFac vs ISO: Key Differences. But no matter the vertical, the build versus buy question — that perennial. 007 per transacation. Supports multiple sales channels. PAYMENT FACILITATORStep 5) Apply for Registration with the Major Card Companies. Also, unlike an ISO, the PayFac provides the processing services, settlement of funds, and billing to the merchant. 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. ISO: What Is the Optimal Integrated Payment Strategy in SaaS? Advertisement. In fact, ISOs don’t even need to be a part of the merchant’s contract. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. The Visa® merchant aggregation model covers all commerce types, including the face-to-face and e-commerce environments, and helps to increase electronic payment acceptance for merchants The differences of PayFac vs. Generally, a PayFac is a good fit for businesses that process less than $1 million in payment volume annually, while an ISO is well-suited for larger businesses that process more than this. Maybe you want to learn about PayFac vs. 4. In this model, the issuer (having the relationship with the cardholder) and the acquirer (having the relationship with the Merchant) is the same entity. PayFac vs ISO: Differences, Similarities, and How to Choose the Right One 11 Like Comment Share Copy; LinkedIn; Facebook; Twitter; To view or add a comment, sign in. There are two types of merchant account providers: independent sales organizations (ISO) and payment facilitators (PayFac), also known as payment service providers (PSP). In a similar manner, they offer merchants services to help make the selling process much more manageable. A guide to payment facilitation for platforms and marketplaces. A payfac or PF, short for payment facilitator, makes it possible for you to accept payments from customers in a variety of ways, including card payments,. Here are several benefits: As a hybrid PayFac, your company can handle client onboarding in minutes or hours instead of the usual 48-72-hour time-frame required for merchant account setup. Our team has over 30 years experience. In contrast, PayFacs have one or two processor relationships and onboard ISVs as referral agents. After the vetting process, the PayFac entity adds the sub-merchant to its master list of sub-merchants or customers. PSP = Payment Service Provider. The PayFac model thrives on its integration capabilities, namely with larger systems. Business Size & Growth. Payment Facilitator. 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. Here are the six differences between ISOs and PayFacs that you must know.