Here’s how Visa defines payment facilitators and sponsored merchants: “PayFac or merchant aggregator, a payment facilitator is a third party agent that. PayFacs provide a similar service to standard merchant accounts, but with a few important differences. ; Re-uniting merchant services under a single point of contact for the merchant. You own the payment experience and are responsible for building out your sub-merchant’s experience. PayFac is software that enables payments from one vendor to one merchant. 00 Payment processor/ merchant acquirer Receives: $98. PayFac vs ISO: Contractual Process. They’ll listen to you and guide you in developing the solutions your customers want and need. an ISO. Square has been one of the most disruptive technology companies in the past decade, yet they recently caught the media’s attention for the wrong reason. (ISO). With a. 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:. However, the setup process might be complex and time consuming. Payfac’s immediate information and approval makes a difference to a merchant. S. • The acquirer has access to Payfac system to oversee their performance and compliance. A PayFac is one of the types of a payment service provider (PSP). PayFac vs ISO: When Does One Make Sense over The Other? Add comment. All in all, the payment facilitator has the master merchant account (MID). However, the setup process might be complex and time consuming. PayFacs are often more suitable for SMEs seeking a quick and straightforward setup. You may also like. Our team has over 30 years experience. Understanding the differences between an ISO versus a PayFac will help you see why using a plug-and-play PayFac-as-a-Service solution is the most effective payment acceptance choice. ISOs sold merchant accounts to applicants on behalf of different acquiring banks and were integrated with multiple payment gateways, that were connected to specific acquirers and processors. Onboarding workflow. I/C Plus 0. They offer merchants a variety of services, including. I SO. ”. Visa 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. One of the key differences between payment aggregators and payment facilitators is the size of sub-merchants they are servicing. In contrast, PayFacs have one or two processor relationships and onboard ISVs as referral agents. However, payment processing can quickly become overwhelming and complicated, often leaving. It needs to obtain a merchant account, and it must be sponsored into the card networks by a bank. In short, Payment Facilitation is an operating model that affects the acquiring side of the payment ecosystem. 00 Retains: $1. Optimized across years of experience onboarding and verifying millions of individuals and businesses, our payfac solution includes real-time KYC checks, sanctions screening, secure card data tokenization and vaulting,. 1. Let us take a quick look at them. Payfac and payfac-as-a-service are related but distinct concepts. 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 underlying role that these fill for a business is to provide merchant services, and you can read our reviews of various merchant service providers here. The acquirer receives funds from the issuer and pays them into the master merchant account of the PayFac. Avoiding The ‘Knee Jerk’. For example, an. The ISVs that look at the long. VAR, ISV, Next-generation ISO: Outside Payment Facilitator Paradigm. 20) Card network Cardholder Merchant Receives: $9. implementation of a payment facilitator model) calls for getting certified as one by the respective acquirer, and for. However, the setup process might be complex and time consuming. For example, an artisan. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. 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. So, the main difference between both of these is how the merchant accounts are structured and organized. Technology has fundamentally changed how businesses, acquiring banks, and card networks work together. We promised a payfac podcast so you’re getting a payfac podcast. For businesses, the difference between using payfac-as-a-service compared to becoming a payfac comes down to time, cost, and risk. In order to provide a plausible explanation, we need to understand the evolution of the merchant services industry. 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. Risk management. 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. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. eCommerce. However, the setup process might be complex and time consuming. What is an ISO vs PayFac? Independent sales organizations (ISOs) and payment facilitators (PayFacs) play important intermediary roles in the payments ecosystem. Difference #1: Merchant Accounts. This site uses cookies to improve your experience. The ISO is an intermediary signing up the merchants for the acquirer’s payment processing services. 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. 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. So naturally, any company considering the option needs to make sure the investment they’ll make in the Payfac model makes sense financially. Payfac conducts oversight on all the transactions on its platform to ensure that all payments operate under legal and network regulations. A payment facilitator (payfac) is a service provider for businesses that simplifies the merchant-account enrollment process. Payfac-as-a-service vs. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. By owning these operational components,. 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. May 24, 2023. Generally speaking, you will. One of the reasons for this phenomenon is that many companies (including former independent sales organizations (ISO)) find it more profitable to combine the functions of an online gateway provider and a merchant service provider (MSP). 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. Go female, it describes the daylight sensitivity of a digital camera or a chunks of film. Learn more: What is an ISO? PayFac vs marketplace: what’s the difference? A PayFac is similar to a marketplace in that it provides a platform for merchants to sell their goods or. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. 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. ISVs create software for companies in the payments industry. A payfac is a type of payment aggregator, but it typically provides a more comprehensive suite of services. For example, in an ISO relationship, you’re unable to customize the onboarding experience for your customers, but with managed payment facilitation, you can. For example, an artisan. Payment facilitator model is suitable and effective in cases when the sub-merchant in question is a medium- or large-size business. Payment Facilitator. responsible for moving the client’s money. The terms aren’t quite directly comparable or opposable. You see. In contrast, PayFacs have one or two processor relationships and onboard ISVs as referral agents. 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. While there are many benefits of integrating to a Payfac, two of the most notable are frictionless onboarding and risk, liability and costs associated. PayFac vs. One of the most significant differences between Payfacs and ISOs is the flow of funds. Unlike PayFac technologies, ISO agreements must include a third-party bank to sponsor the contract. But to banks and merchants it. Payment Facilitator vs Payment Processor. If you are an existing Bambora customer who needs assistance there are our support guides that can be found here. Also, it’s essential to mention that PayFac is a Mastercard model, while the one for Visa is a payment service provider. Both the PayFac and ISO acquisition models have unique benefits and drawbacks. ISO vs PayFac: What’s the difference? An ISO is a third-party company that refers merchants to acquiring banks or payment service providers. ISOs never directly touch a merchant’s money as the money will flow directly from the payment processor to the merchant’s merchant. About 50 thousand years ago, several humanities co-existed on our planet. When you are listed, you help secure the promise of a trusted payment system by highlighting your investment in data security and the. Top content on Payfac, SaaS and SaaS Payments as selected by the SaaS Brief community. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. 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. In fact, ISOs don’t. 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. Moreover, in a sense, PayFac model relieved acquirers from merchant management functions, which they delegated to PayFacs. India’s leading payment gateway: Working with a full-service payment services provider,. This site uses cookies to improve your experience. One classic example of a payment facilitator is Square. PSPs facilitate payments and act as a proverbial middleman between you and the merchant. For example, an. Payfac-as-a-service vs. payment processor question, in case anyone is wondering. An ISV can choose to become a payment facilitator and take charge of the payment experience. However, the setup process might be complex and time consuming. The arrangement made life easier for merchants, acquirers, and PayFacs alike. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Clover vs Square. Often, ISVs will operate as ISOs. However, the setup process might be complex and time consuming. Global Electronic Technology, Inc. However, the setup process might be complex and time consuming. For example, an artisan. Contracts ISOs and PayFacs sign different contracts with their clients. This can include card payments, direct debit payments, and online payments. At Payline, we’re experts when it comes to payment processing solutions. The Payment Facilitator uses a sub-merchant platform to provide two types of merchant accounts, a PSP and an ISO. What’s the Difference Between a Payment Facilitator, a Payment Processor, and an Independent Sales Organization (ISO) At a glance, a facilitator, a processor, and an ISO may seem to be similar, but the differences are notable. ISO. The new PIN on Glass technology, on the other hand, is becoming more widely available. 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 vs ISO: Weighing Your Payment Options . If necessary, it should also enhance its KYC logic a bit. 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. For example, an. ISO vs PayFac: What’s the difference? An ISO is a third-party company that refers merchants to acquiring banks or payment service providers. However, the setup process might be complex and time consuming. Episode 2 is live! Our guest on this episode is Menda Sims, Chief Payments Officer at Stax Payments. ISO = Independent Sales Organization. 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. At first it may seem that merchant on record and payment facilitator concepts are almost the same. The facilitator company collects and manages the money. Both offer ways for businesses to bring payments in-house, but the similarities end there. A three-party scheme consists of three main parties. Almost every bank nowadays has a department dealing with merchant services. 00 Payment processor/ merchant acquirer Receives: $98. Now that you’ve learned about what a PayFac is, you might want more information. A relationship with an acquirer will provide much of what a Payfac needs to operate. For example, an. Sometimes a distinction is made between what are known as retail ISOs and. They are agents of the banks and therefore only. After the vetting process, the PayFac entity adds the sub-merchant to its master list of sub-merchants or customers. For example, the bank will need to determine whether it will require daily reports or access to the Payfac’s systems. 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. To know that your payfac relationship is completely above-board, first know what a payment facilitator is and the issues related to money transmission. ; For now, it seems that PayFacs have. This includes underwriting, level 1 PCI compliance requirements,. 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. What is a Payment Facilitator (Payfac)? Payfacs are an evolution of a long-established distribution model in the payments industry. . A guide to marketplace payments. 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. 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. If your sell rate is 2. 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. Stax Payments is thrilled to announce the appointment of our new Chief Executive Officer, Paulette Rowe. Indeed, PayFac model is a beneficial solution for merchants, acquirers, and, of course, payment facilitators themselves. PayFac: Key Differences & Roles in Payment Processing Read more Top 4 Benefits of Being an Independent Sales Agent Read more Why Becoming a Sales Agent in the Payments Industry is a Great Job. PayFac vs ISO: When Does One Make Sense over The Other? Now’s Your Chance to Suggest 2020 Article Topics. ISOs. Very rarely, said Mielke, do ISVs win with the “knee-jerk reaction of becoming a PayFac and capturing those additional revenues. 20) Card network Cardholder Merchant Receives: $9. PayFac: How the Two Most Common Types of Payment Intermediaries Differ. Top content on Payfac and Payments as selected by the SaaS Brief community. 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 payment facilitator (PayFac) is a merchant services business that sets up electronic payment and processing services for business owners, so they can accept electronic payments online or in-person. Blog. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. Most businesses that process less than one million euros annually will opt for a PSP. Modern PayFacs find it more profitable to integrate with just one processor/gateway and provide merchant processing services (onboarding, chargeback. In essence, they become a sub-merchant, and they face fewer complexities when setting. Payment facilitation (Payfac) is a service that allows businesses to accept payments from their customers in a variety of ways. Checkout’s UK & Europe net revenues in FY2019 were $55M and grew 52% yoy. PayFac vs. PayFacs work under one or more payment processors, operating in a layer of the industry between processors and merchants. PayFac-as-a-Service has emerged from payment companies and independent sales organizations (ISO) that have gone through the regulatory compliance of PayFac registration. Payfac’s immediate information and approval makes a difference to a merchant. In order to understand how. Our payment-specific solutions allow businesses of all sizes to. Each ID is directly registered under the master merchant account of the payment facilitator. 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. . In the current downturn, said Mielke, the PayFac or ISV that is diversified will be better positioned to weather the storm. They typically work with a variety of acquiring banks, using those relationships to "resell" merchant accounts to merchants. Ongoing Costs for Payment Facilitators. Supports multiple sales channels. Banks. Without ISOs, a relatively small handful of global and regional payment processors would each be forced to interact with. June 14, 2023 PayFac Vs. Now let’s dig a little more into the details. So, what. Typically, the ISO stays out of the contract between the two and instead focuses on the relationship with the payment processor. Software users can begin. Under the PayFac model, each client is assigned a sub-merchant ID. However, the setup process might be complex and time consuming. A PayFac, or payment facilitator, is a merchant services model that streamlines the merchant account enrollment process by onboarding a merchant as a sub-account under the PayFac’s master account. PayFac is more flexible in terms of providing a choice to. 70. For some ISOs and ISVs, a PayFac is the best path forward, but. This can include card payments, direct debit payments, and online payments. A three-party scheme consists of three main parties. merchants look at the long-term TCO on buying vs. For example, an. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. 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. In fact, ISOs don’t even need to be a part of the merchant’s contract. PayFac vs Payment Processors. To the extent that a Payment Facilitator wishes to identify and review every unmatched refund it has that capability. The merchant interacts directly with the ISO and follows their set processes to register and become. Cancel reply. For example, an. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. The PayFac model is also very attractive to independent software vendors. Even though PayFacs and ISOs may seem to be quite similar on the surface, there are a few key differences between them. Toward the average human, ISO is the acronym employed by the Global Organization for Standards. Payment facilitation, or “payfac,” continues to grow in popularity among software providers and is designed to facilitate payment card acceptance without requiring individual merchants to go through the lengthy process of establishing traditional merchant accounts. (GETTRX) is a registered ISO/MSP/PSP/Payment Facilitator for Merrick Bank, South Jordan, UT, FDIC insured. 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 merchantsThe differences of PayFac vs. 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). This site uses cookies to improve your experience. For example, an. A PayFac works by establishing one master merchant account, which can then be leveraged by multiple businesses for a small fee. Aug 10, 2023. And this is, probably, the main difference between an ISV and a PayFac. What is a payment facilitator (payfac)? What is an independent sales organization (ISO)? What are the differences between ISOs and payfacs? Do I need an ISO or a payfac? Is Stripe an ISO or a payfac? Payment Facilitator vs ISO. But no matter the vertical, the build versus buy question — that perennial. The payment facilitator model was created by the card networks (i. While an ISO product will sometimes take weeks to approve a merchant due to the more stringent and quite often paper-based application process, PayFacs are able to. Payment facilitator model is a lucrative option for many present-day companies. In fact, they broke the mold when they offered Toast a payfac at $0. Industries. Another distinction between PayFacs and ISOs is in the “fine print. Payfac as a Service is the newest entrant on the Payfac scene. For example, payment facilitators typically perform underwriting, boarding, and transaction monitoring. or by phone: Australia - 1300 721 163. The name of the MOR, which is not necessarily the name of the product seller, is specified by. In a similar manner, they offer merchants services to help make the selling process much more manageable. Even better? Funds are settled to the PayFac’s account and it’s determined by the PayFac to move those funds to the merchant. To help us insure we adhere to various privacy regulations, please select your country/region of residence. ISO Versus the PayFac Payment Model. It is when a business is set up as a primary merchant account and provides payment processing to its sub-merchants. For example, an. Worldpay was one of the first processors to offer payfac extensibility. Once a sub-merchant has been through the onboarding process it is down to the PayFac to control payments adhering to the rules. PayFac vs ISO: Key Differences. So how much. This simplifies the onboarding process and enables smaller. Smaller. Some stay where they are (like, again, Uber or Amazon), while others decide to implement the PayFac model. One classic example of a payment facilitator is Square. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Also, unlike an ISO, the PayFac provides the processing services, settlement of funds, and billing to the merchant. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. Reduced cost per application. Payment facilitation, or “payfac,” continues to grow in popularity among software providers and is designed to facilitate payment card acceptance without requiring individual merchants to go through the lengthy process of establishing traditional merchant accounts. There are DEF benefits to. a PSP/PayFac. To learn more about the differences between these payment models, see our blog: PayFac vs ISO: Weighing Your Payment Options. 0. 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. For example, an. By viewing our content, you are accepting the use of cookies. A Payment Facilitator or Payfac is a service provider for merchants. Whatever information you need, we can help. Payment Facilitators are 100% responsible for PCI Compliance, risk underwriting, funding and providing payment support. If you want to take a full revenue model opposed to a commission based model anyway. In essence, PFs serve as an intermediary, gathering. Download to discover your next payment strategy: Sponsor: Nexio #. e. Each client is the merchant of record for transactions. Maybe you want to learn about PayFac vs. PayFac: ISO: Merchant onboarding timeline : Instant account approvals: Days or weeks : Sign-up process: Quick and easy. Whatever works best for them. Avoid the slow, manual sub-merchant onboarding with other payfac solutions, and offload your payments compliance obligations to Stripe. And this is, probably, the main difference between an ISV and a PayFac. Unlike PayFac technologies, ISO agreements must include a third-party bank to sponsor the contract. 5. Skaleet's Core Banking Platform helps marketplaces launch their PayFac solution by opening a merchant bank account and receiving a merchant category code (MCC) to acquire and aggregate payments for a group of smaller merchants, typically called sub-merchants. The arrangement made life easier for merchants, acquirers, and PayFacs alike. Besides that, a PayFac also. However, the setup process might be complex and time consuming. The size and growth trajectory of your business play an important role. With an ISO, you’ll. For example, an. Owners of many software platforms face the need to embed. One of the main benefits to adopting the Payfac ® model is the increase in revenue you get from each transaction processed using your software. Both offer companies a means of accepting and processing payments, and while they may appear to be the. ” A PayFac can have a two-party agreement, meaning it enters into a direct contractual relationship with its merchants (with or without a. Underwriting is a risk assessment practice that helps the PayFac entity understand the nature of the sub-merchant business and the risks involved in onboarding such a profile. (PayFac) Receives: $3. The PayFac, he said, has emerged, and evolved from its 1990s underpinnings where merchant acquirers had handled that merchant enrollment, boarding, underwriting and even settlement. The new PIN on Glass technology, on the other hand, is becoming more widely available. 007 per transacation. PayFac vs ISO is an illustrative example of natural selection and adaptation in the fintech world. They typically work. A PayFac provides credit card processing services to merchants on behalf of a bank or other. In short, a PayFac or payment facilitator, is a master merchant that supports sub-merchants. While all of these options allow you to integrate payment processing and grow your. However, the setup process might be complex and time consuming. 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. In order to understand how. The terms aren’t quite directly comparable or opposable. 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. However, the setup process might be complex and time consuming. With the payment facilitator or PayFac model, every user gets a sub-merchant ID. 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. Marketplace vs ecommerce platform: What's the difference? Read article. The PayFac must properly follow KYC practices and correctly assess the sub-merchants as all transactions can be aggregated under a single merchant ID. PayFac vs ISO: Contractual Process. You may also like. For example, an. This is a clear indicator that fraud monitoring should be a priority in 2022 and beyond, and why it’s vital to work with a PayFac like. ISV: An Independent Software Vendor (ISV) is a company that creates and sells software. The ISO, who has a direct relationship with the processor, then earns an even smaller slice of the fee, often amounting to a fraction of one percent. This doesn’t happen with ISO, as it never handles money directly. In a similar manner, they offer merchants services to help make the selling process much more manageable. As a seasoned global executive with strategic leadership experience across banking, #. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. San Jose California Equipment Maintenance Agreement with an Independent Sales Organization. Hardware and Software. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Generally speaking, a PayFac might be suitable for bigger businesses that need to process a large volume of transactions, and an ISO might be more suitable for. Even though PayFacs and ISOs may seem to be quite similar on the surface, there are a few key differences between them. However, the setup process might be complex and time consuming. Registered payment facilitators earn 20-40 basis points more per transaction than they would riding the rails of another wholesale PayFac. 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. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. “So, your policies and procedures have to guide how you are going to. Before this model was available, businesses would often partner with an ISO to enable payment acceptance for its clients—and many still do today. While we’ll discuss costs below, PayFacs can onboard merchants much more quickly than a traditional ISO model. However, the setup process might be complex and time consuming. Until recently, SoftPOS systems didn’t enable PINs to be inputted. Aug 10, 2023. Click here to learn more. ISO are important for your business’s payment processing needs. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. You must be logged in to post a comment. 8–2% is typically reasonable. 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. PayFac vs Payment Processors. In simple terms, the MOR is the name that the customer (cardholder) sees on the receipt. FIGURE 6: SaaS Provider & Platforms – Observed PayFac Model Progression Journeys . 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. For starters, ISOs function only as resellers. Recently, the concepts of PayFac and aggregators have started converging. Lower. In exchange for the user fees, PayFac underwrites these new merchants and assumes the risk of any payments made through its platform. Reducing. Before outlining the similarities and commonalities of ISOs and ISVs, it’s helpful to recap their key differences: ISOs sell payment solutions to merchants, with wholesale ISOs offering additional services such as customer support. Payfac 45. Payment processors do exactly what the name says. Start earning payments revenue in less than a week. A PayFac, or payment facilitator, was originally defined by Visa® and Mastercard® to describe the entity that is officially doing business with the card brands. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. PayFac vs ISO: 5 significant reasons why PayFac model prevails. In general, if you process less than one million. For example, an. 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. 1. subscribing, and for some of these “old heads” (I’m in that group…. 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 artisan. PayFac: Key Differences & Roles in Payment ProcessingPayFac vs ISO. Some ISOs also take an active role in facilitating payments. The distinction between wholesale ISO and PayFac is thusly less critical than the distinction between being a technology company and being a troglodyte. 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. Until recently, SoftPOS systems didn’t enable PINs to be inputted. The PayFac model thrives on its integration capabilities, namely with larger systems. They typically work with a variety of acquiring banks, using those relationships to "resell" merchant accounts to merchants. accounting for 35. ISOs rely mainly on residuals, a percentage of each merchant transaction. PayFac-as-a-service delivers a competitive payment program with instant onboarding of merchants while creating a seamless customer experience.