Overall, ISOs work as intermediary “resellers” of payment processors or acquiring banks to merchants, while PayFacs have a single account and absorb greater. This allows the businesses under the payfac’s umbrella to focus on their core operations rather than deal with the complexities of the. For example, an artisan. A payfac is a type of payment aggregator, but it typically provides a more comprehensive suite of services. Embedding payments into your software platform is a powerful value driver. This was an increase of 19% over 2020,. However, the setup process might be complex and time consuming. They are typically small businesses that work with a limited number of banks. ISO are important for your business’s payment processing needs. Payfac and payfac-as-a-service are related but distinct concepts. Payfac. Most businesses that process less than one million euros annually will opt for a PSP. An ISO is an intermediary entity that resells and markets payment processing services on behalf of banks and payment processors. But regardless of verticals served, all players would do well to look at. Before offering customers payment methods from popular card networks (Visa, Mastercard, etc. 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. An ISO is a third-party company that refers merchants to acquiring banks or payment service providers. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. This type of partnership is the least involved for an ISV or ISO. However, payment processing can quickly become overwhelming and complicated, often leaving businesses feeling unprepared and doomed to failure. For example, an. However, PayFac concept is more flexible. ISO vs. However, the setup process might be complex and time consuming. This was around the same time that NMI, the global payment platform, acquired IRIS. For example, 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. PayFac: How the Two Most Common Types of Payment Intermediaries Differ. Each of these sub IDs is registered under the PayFac’s master merchant account. You see. It’s where the funds land after a completed transaction. Blog Exact Payments CEO, Phil Levy, Discusses the Future of Fintech With The Strawhecker Group. The first key difference between North America and Europe is the penetration of ISVs. However, the setup process might be complex and time consuming. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Touch device users, explore by. Besides that, a PayFac also. An ISO, or independent sales organization, is a company that resells payment services to merchants on behalf of a payment processor or acquiring bank. However, the setup process might be complex and time consuming. PayFacs provide a similar. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. For example, an. At the same time, Paragon Payment Solutions assumes the majority of risk and responsibilities related to operational expenses, chargebacks,. In contrast, PayFacs have one or two processor relationships and onboard ISVs as referral agents. Fortis also. Lean on our payments expertise and offer your customers an end-to-end solution. Maybe you are ready to become a full-fledged PayFac, maybe the answer is a managed PayFac, or maybe the best solution would be to act as an ISO. A merchant of record is an entity that accepts cardholders’ payments and assumes liability for processing of these payments on the merchant’s behalf. 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. For example, an. For example, an. 4. PayFacs perform a wider range of tasks than ISOs. 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 Payment Aggregator can quickly onboard a new merchant (typically a user of the SaaS offering) and they can begin. For example, an. ISO 23195, Security objectives of information systems of third-party payment services, provides an internationally agreed list of terms and definitions, two logical structural models and a list of security objectives. 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. ISOs rely mainly on residuals, a percentage of each merchant transaction. However, the setup process might be complex and time consuming. A payment facilitator allows sub-merchants under one master merchant to process payments easily, with less hassle. Cutting-edge payment technology: Extensive. For example, an. So naturally, any company considering the option needs to make sure the investment they’ll make in the Payfac model makes sense financially. The value of all merchandise sold on a marketplace or platform. PayFac: Key Differences & Roles in Payment ProcessingThe choice between a PayFac and a payment processor depends on your business needs, industry, and desired level of support. However, the setup process might be complex and time consuming. 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: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. ,), a PayFac must create an account with a sponsor bank. Acquirer = a payments company that. payment processing. Benefits and criticisms of BNPL have emerged on several fronts. The contract is typically between the sponsor and the merchant, but the ISO may sometimes be included in a three-party agreement. Payfac as a Service providers differ from traditional Payfacs in that. For example, an. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. For example, an artisan. However, the setup process might be complex and time consuming. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Risk management. Stripe is an ISO with First Data Merchant Services (FDMS, I believe now owned or controlled by Wells Fargo) doing the actual processing and, as such, assumes a different legal role than PayPal (which is a VAR for Paymentech). However, the setup process might be complex and time consuming. However, the setup process might be complex and time consuming. You own the payment experience and are responsible for building out your sub-merchant’s experience. Payfac’s immediate information and approval makes a difference to a merchant. 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: A payfac operates under a master merchant account, and creates subaccounts for each business it services. 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. Contracts. The PayFac does not have to underwrite all merchants upfront — they are instead, underwriting the merchants essentially as they continue to process transactions for them on an ongoing basis. 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. Depending on your processing volumes there are two different types of merchant accounts that you will qualify for, either a PSP and an ISO. the PayFac Model. Generally speaking, a PayFac might be suitable for. This simplifies the onboarding process and enables smaller. 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. However, the setup process might be complex and time consuming. Assessing BNPL’s Benefits and Challenges. What is an ISO vs PayFac? Independent sales organizations (ISOs). Payfac is a type of payment facilitator, while ISO stands for Independent Sales Organization. com explains everything you need to know. There isn’t much of a debate in terms of functionality in the larger payment processor vs. They may offer more or different services than a processor. Processor relationships. However, the setup process might be complex and time consuming. For example, an artisan. 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. For example, 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. 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. 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. They provide the systems and technology that process transactions. 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. A. Onboarding workflow. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. For example, an artisan. The key aspects, delegated (fully or partially) to a. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Even better? Funds are settled to the PayFac’s account and it’s determined by the PayFac to move those funds to the merchant. While they both enable a company to process payments, they have different roles and responsibilities. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. PayFac Solution Types. 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. PayFac vs ISO: Contractual Process. Can an ISO survive without. It works by using one umbrella merchant account that allows every merchant to open as a sub-account underneath it. Depending on your processing volumes there are two different types of merchant accounts that you will qualify for, either a PSP and an ISO. Payfac: What’s the difference? Independent Sales Organization (ISO) is a third-party entity that partners with payment processors or acquiring banks to facilitate merchant services. Cons. PayFac: How the Two Most Common Types of Payment Intermediaries Differ. PayFac Dynamic Payout Daily Operations Guide This document is intended for use by operations and financial professionals to assist with day-to-day monitoring and management of the Worldpay Dynamic Payout funding model. To fully understand the benefits of the payment facilitator model, it’s important to first take a look at what goes into creating a standard payment processing agreement. For example, an. e. 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. Stripe By The Numbers. As a result, PayFac or ISO must accept a higher level of accountability, which in the case of PayFacs maybe 100%. The main difference between these two technologies,. A payment processor serves as the technical arm of a merchant acquirer. Owners of many software platforms face the need to embed. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. While there is some overlap between a payment processor and a PayFac, there are also some important differences you should be aware of (although. PayFac vs. Step 1: Sender initiates P2P transaction to Transaction Originator. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. 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. 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: A payfac operates under a master merchant account, and creates subaccounts for each business it services. However, the setup process might be complex and time consuming. PayFac vs Payment Processors. Here are the six differences between ISOs and PayFacs that you must know. Call it the Amazon. 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 Worldpay PayFac® experience goes the distance from boarding sub-merchants to collecting payments, reducing risk, and more. However, the setup process might be complex and time consuming. The Payment Facilitator Registration Process. Clover vs Square. A best-in-class payment solution. North America is a Mature ISV Market, Europe is Not. 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. To learn more about the differences between these payment models, see our blog: PayFac vs ISO: Weighing Your Payment Options. 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 merchant fills out extensive paperwork in order to open their own merchant processing account. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. 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. Payment aggregator vs. 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 and payfac-as-a-service are related but distinct concepts. For example, an. However, the setup process might be complex and time consuming. Checkout. Besides that, a PayFac also takes an active part in the merchant lifecycle. Now let’s dig a little more into the details. e. If you want to take a full revenue model opposed to a commission based model anyway. Payfac-as-a-service vs. The ISO is an intermediary signing up the merchants for the acquirer’s payment processing services. . However, the setup process might be complex and time consuming. Qualpay offers a fully-integrated payment processing solution, including merchant account, payment gateway, invoicing and recurring payments. a merchant to a bank, a PayFac owns the full client experience. Also, unlike an ISO, the PayFac provides the processing services, settlement of funds, and billing to the merchant. becoming a payfac. ISO vs. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. However, the setup process might be complex and time consuming. ISO vs PayFac. Checkout’s “gross profit” is the P&L line most comparable with Adyen’s “net revenue” line. However, the setup process might be complex and time consuming. 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. So, the main difference between both of these is how the merchant accounts are structured and organized. 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: A payfac operates under a master merchant account, and creates subaccounts for each business it services. July 12, 2023. For example, an artisan. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payfac-as-a-service vs. Payment Facilitators (commonly known as PayFacs or PFs) have risen in popularity over the recent years. ISOs are an exceptionally important part of the payments ecosystem, serving a critical role that supports both their processing partners and their merchants. Comments on: ISO vs Payfac: Choosing the Right Payment Solution for Your BusinessA: Mastercard Send is the first-of-its-kind interoperable global platform that enables funds to be sent quickly and securely. 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 key difference between a payment aggregator vs. However, the setup process might be complex and time consuming. By Ellen Cibula Updated on April 16, 2023. An ISO or PayFac can earn millions of dollars from a portfolio of hundreds or even thousands of merchants, all taking hundreds or thousands of electronic payments per day. In order to understand how. For example, an. In a similar manner, they offer merchants services to help make the selling process much more manageable. 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. For example, an. However, the setup process might be complex and time consuming. However, the setup process might be complex and time consuming. While the PayFac model comes with some unique risks, the benefits of additional control and potentially higher margins have seen its popularity grow among two major categories of operators: traditional acquirers and independent software vendors. 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. For example, an. For example, an artisan. 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. Intro: Business Solution Upgrading Challenges; Payment. PayFacs for short, are esoteric merchant acquiring entities that are really picking up momentum. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. When choosing between a Payment Facilitator (Payfac) and a Merchant of Record (MoR) for your business, several key factors should be carefully considered: 1. And this is, probably, the main difference between an ISV and a PayFac. These companies include owners of SaaS platforms, franchisors, ISO, marketplaces, and venture capital firms. A payfac is a type of payment aggregator, but it typically provides a more comprehensive suite of services. However, the setup process might be complex and time consuming. As a result of the first two. , it will enable disbursements and P2P payments to and from nearly any U. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. 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. 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. Also Read: Evaluating the Differences Between an ISO and a PayFac . For example, an. 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. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Read More. PayFacs take care of merchant onboarding and subsequent funding. Traditional Merchant Account vs. However, the setup process might be complex and time consuming. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. For example, an. However, the setup process might be complex and time consuming. This means providing. For example, an. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. All ISOs are not the same, however. A payment facilitator (payfac) is a service provider for businesses that simplifies the merchant-account enrollment process. Payfac and ISO (Independent Sales Organization) are two terms that are often confused with each other when it comes to payment processing. In essence, a PayFac is an agent for a payment processor, but a unique twist to the. Stripe Terminal is fully compatible with Connect, enabling your platform or marketplace to accept in-person payments. Both the PayFac and ISO acquisition models have unique benefits and drawbacks. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. For example, an. However, the setup process might be complex and time consuming. PayFac: Key Differences & Roles in Payment Processing A payment facilitator (payfac) is a service provider for businesses that simplifies the merchant-account enrollment process. In order to understand how ISOs fit. Companies large and small rely on their accounting/finance, billing, cash. For example, an artisan. But how that looks can be very different. . April 12, 2021. Typically, the ISO stays out of the contract between the two and instead focuses on the relationship with the payment processor. ISVs create software for companies in the payments industry. A Payment Facilitator or Payfac is a service provider for merchants. “Plus, you have a consumer base that is extremely savvy when it. According to SMB estimates. The industry term is Payment Facilitation (or Payfac), and Exact has everything you need to build and scale the entire process from instant onboarding to flexible payouts, fraud protection, comprehensive reporting and end-to-end data. 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. This article is part of Bain's report on Buy Now, Pay Later in the UK. Without ISOs, a relatively small handful of global and regional payment processors would each be forced to interact with thousands. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. 4. 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. What is an ISO vs PayFac? Independent sales organizations (ISOs). In order to provide a plausible explanation, we need to understand the evolution of the merchant services industry. We would like to show you a description here but the site won’t allow us. The bank receives data and money from the card networks and passes them on to PayFac. Extensive. ISO vs. While some software providers starting out as an ISO or referral partner may elect a managed payfac solution as the next logical tech enablement progression, other providers may not want to relinquish visibility and control to a third. There is the opportunity for significantly more payments revenue by becoming a PayFac compared to becoming an ISO or referral partner. This model is ideal for software providers looking to. 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. Payment Processors are responsible for authorization, authentication, data security, settlement, clearing, and reporting services, while ISOs focus on sales, marketing, merchant support, customer service, and value-added services. 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 fact, ISOs don’t even need to be a part of the merchant’s contract. Wider range of featuresA payment facilitator or payfac is a service provider that affords small and medium-sized merchants the means to process debit or credit card payments more quickly, efficiently, and securely, allowing them more room to focus on their core business objectives. PayFac vs. It provides a technology, allowing to authorize transactions and, potentially, receive transaction settlement information. However, the setup process might be complex and time consuming. However, the setup process might be complex and time consuming. Unlike PayFac technologies, ISO agreements must include a third-party bank to sponsor the contract. 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 merchantsA Payment Facilitator (PayFac) is a type of merchant services company that provides business owners with a way to accept electronic payments, both online and in-store. For example, in an ISO relationship, you’re unable to customize the onboarding experience for your customers, but with managed payment facilitation, you can. ,), a PayFac must create an account with a sponsor bank. One classic example of a payment facilitator is Square. An ISO, or independent sales organization, is a company that resells payment services to merchants on behalf of a payment processor or acquiring bank. Below we break down the key benefits of the PayFac model for software. (ISO). It’s an easy choice for the ISV or PayFac that wants to boost its growth and dip its toes into a very easy international market. However, the setup process might be complex and time consuming. However, the setup process might be complex and time consuming. However, the setup process might be complex and time consuming. 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. A Payment Facilitator or Payfac is a service provider for merchants. In exchange for the user fees, PayFac underwrites these new merchants and assumes the risk of any payments made through its platform. If the intermediary entity, which funds the sub-merchants, uses different MID for each merchant, it is called a payment facilitator. If you use direct charges, all Terminal API objects belong. For example, an. ISO: Choosing the Right Solution: To select the right payment processing solution, consider the following factors: Nature of Your Business and Industry: Assess your business’s specific needs and requirements, as well as any industry-specific. Payment Facilitator. The road to becoming a payments facilitator, according to WePay founder Rich Aberman, is long, expensive and technologically complex. 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. The way Terminal creates API objects depends on whether you use direct charges or destination charges. Massive technological leaps have made it easier than ever for software. Segregated accounts are legally segregated from the firm's assets, meaning the company cannot use the funds stored to conduct business operations. an ISO. 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. Click here to learn more. Risk management. 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. 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. However, the setup process might be complex and time consuming. One of the key differences between PayFacs and ISO systems is the contractual agreement. This is because the per-transaction payment processing rates are typically better for merchant accounts—as opposed to sub-merchant accounts. For example, an. ISO collaborates closely with the International Electrotechnical Commission (IEC) on all matters of electrotechnical standardization. A payfac has a much more flexible payment system and a wider variety of payment methods, so much so that it can be carried out through the linked bank account. However, the setup process might be complex and time consuming. For example, an. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. However, the setup process might be complex and time consuming. 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. The payment facilitator model was created by the card networks (i. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. PayFac vs ISO. For example, 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. A three-party scheme consists of three main parties. However, the setup process might be complex and time consuming. A Payment Facilitator or Payfac is a service provider for merchants. Use this document after completing your integration and certification testing and have started processing live transactions. During Jim's tenure with NPC and Vantiv, he also drove the development of and relationship with several key NPC ISOs, as well as oversight and management of specific. Visa vs. Merchants need to. For example, an. However, the setup process might be complex and time consuming. For example, an. For example, an. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. 5. As a result, the revenues, collected by a PayFac, are much larger than the revenues of a traditional ISO. Payscape is also a registered ISO/MSP for Fifth. For example, an. A Payfac, or payment facilitator, is essentially a third-party payment system that allows businesses and organizations to receive and process online and in-store payments. ISOs are an exceptionally important part of the payments ecosystem, serving a critical role that supports both their processing partners and their merchants. However, the setup process might be complex and time consuming. The arrangement made life easier for merchants, acquirers, and PayFacs alike. However, there are instances where discrepancies arise. ISO: An Independent Sales Organization (ISO) is a company that refers businesses that need to accept card payments to processors and acquiring banks. Both PayFacs and ISO’s (independent sales organizations) act as intermediaries between merchants and payment processors . In 2021, global payment facilitators processed over $500 billion in transactions – a 75% increase over the previous year. Moreover, in a sense, PayFac model relieved acquirers from merchant management functions, which they delegated to PayFacs. agent A specified good or service is a distinct good or service (or a distinct bundle of goods orPayment 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. However, the setup process might be complex and time consuming. 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. Visa, Mastercard) around 2011 as a way for aggregators to provide more transparency into who their sub-merchants were. However, the setup process might be complex and time consuming. A. In other words, processors handle the technical side of the merchant services, including movement of funds. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. One key difference between payment facilitators and aggregators is the size of businesses or merchants they work with. In the U. Almost every bank nowadays has a department dealing with merchant services. ; Selecting an acquiring bank — To become a PayFac, companies. Beyond that lies the customer experience. PayFac vs merchant of record vs master merchant vs sub-merchant. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. However, the setup process might be complex and time consuming. 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. 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. e. When you’re using PayFac as a service, there are two different solution types available. For example, 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. Payment facilitator model is suitable and effective in cases when the sub-merchant in question is a medium- or large-size business. Wide range of functions. A payfac is also responsible for underwriting and risk assessment, settling funds with submerchants, dealing with chargebacks and disputes, and ensuring compliance with regulations in the payment industry. An ISO or acquirer processes payments on behalf of its clients that are call merchants.