We just won the ETA Top 10 Payments ISV Award!

We are excited to receive this distinguished award!

How Payment Facilitation Works

How Payment Facilitation Works

Are you considering payment facilitation as a strategy to drive revenue for your software business? This innovative merchant services model enables SaaS companies to access $35 trillion in payment monetization opportunities. 

What is a Payment Facilitator (PayFac)?

Payment facilitators are merchant services providers (MSPs) that provide merchants with the ability to process electronic payments. Most PayFacs are software companies (aka ISVs) that offer payment processing as an embedded feature within their existing SaaS software to their end customers (merchants).

The PayFac Difference

Payment facilitation brings a next-generation approach to the traditional world of merchant services, differing greatly from the independent sales organization (ISO) model. The two unique elements of the PayFac model are sub-merchant onboarding and a software-led approach.

The PayFac Model Explained

PayFacs open merchant processing accounts directly with the bank and operate as master merchants. They onboard their sub-merchants with processing accounts and provide proprietary software with embedded payment processing features.

PayFac Benefits for Merchants

  • Fast account onboarding
  • Innovative payment technology
  • Flexible and competitive pricing

PayFac Benefits for SaaS Providers and ISVs

  • Highly lucrative revenue stream
  • Improved customer satisfaction and retention
  • Customized and branded payment flows  

ISO Vs. PayFac

PayFacs and ISOs have unique operating structures that result in distinct merchant experiences.

  1. ISO

ISOs act as intermediaries between acquiring banks and merchants. They resell payment processing tools and services from third-party companies.

  1. PayFacs 

PayFacs open merchant processing accounts directly with the bank and operate as master merchants. They onboard sub-merchants and sell proprietary software with embedded payment processing features. 

The best approach for your business depends on a number of factors, such as your processing volume, overhead resources, and overall business goals. 

To learn more about payment facilitation, read our article How Payment Facilitation Works: An Overview for SaaS Providers.

Become a PayFac With Exact Payments

As a PFaaS provider, Exact Payments has all the tools and support that SaaS companies need to get up and running with the PayFac model. You’ll be able to embed innovative payment features and enjoy a profitable revenue stream—without having to shoulder the responsibilities of building a full PayFac infrastructure. To learn more about our solution and how it can help your business, contact us for a free consultation!

Access Resource

Form cannot be loaded, please try refreshing the page or disabling any ad or cookie blocking tools.
You can review our commitment to protecting your privacy and our privacy practices in our Privacy Policy