A software platform that wants to add a payment solution has two options: become its payment facilitator or partner with one. Creating an in-house solution requires a lot of time and resources, especially if there’s a need to develop a compliance infrastructure.
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A payment aggregator offers a hassle-free onboarding process and flat transaction fees, opening up new monetization opportunities for businesses and offering consumers a more comprehensive range of purchasing options.
On this post, let's talk about the impact a payment facilitator can have on your business:
Streamlined Onboarding Process
A Payment Facilitator is a business that allows multiple merchants to accept payments without requiring each seller to obtain their merchant account. The payment facilitator establishes a master merchant account with an acquirer and then invites individual merchants to participate by registering as sub-merchants.
Creating your in-house solution for accepting payments requires a significant investment of time in developing the compliance infrastructure and training your team to monitor for even the most subtle developments in payment rules, card network requirements, and other industry standards.
A payment facilitator already has an army of experienced payment experts on the watch for these changes, saving you valuable resources that could be better spent addressing other strategic initiatives.
As a result, businesses that opt for the PayFac model can offer quicker onboarding for new merchants, easier management of who is approved to use their platform, and more opportunities to monetize payments, opening up a new pillar of revenue and adding value to their platform.
Reduced Risk of Chargebacks
Establishing a payment infrastructure has been a prohibitive barrier for many small businesses. Payment facilitators, also known as PayFacs, enable companies to monetize payments within their platforms without the burden of costly, specialized hardware and software.
A PFaaS model will require significant client education to bring your clients up to speed on new processes that may impact their business. You must walk them through complex procedures, new reconciling payment data methods, etc.
This is a significant time investment that you should factor into your overall business model. Additionally, you must comply with new regulations for vetting sub-merchants and other responsibilities associated with the role. In the end, however, the benefits of a PFaaS model outweigh these costs.
Payment facilitation models can also make your company more competitive by reducing fees and offering flat-rate pricing structures.
Enhanced Customer Experience
What Is a Payment Facilitator? A payment facilitator offers smaller businesses a smoother, easier path to electronic payment acceptance. It’s a more prominent organization with the infrastructure to deal with compliance regulations and risks associated with moving money.
It can also manage all the paperwork, which allows for fast and easy onboarding of small businesses (sub-merchants). Unlike a traditional processor that needs to take time to approve merchant accounts, PayFac can expedite this process by having pre-approved accounts with financial institutions.
A PayFac can also have a straightforward and easy-to-understand fee structure. Becoming a payment facilitator requires careful consideration of the pros and cons. Choosing a provider that offers excellent support and service with responsive customer care and flexible pricing and charge structures is vital.
This will enable you to focus on your clients and grow your business. Talk to a Finix payments specialist for personalized guidance and additional information.
A payment facilitator can help your business generate more revenue by taking a cut of each transaction processed. This can benefit software companies that offer payment functionality as part of their product offering but can’t integrate it themselves.
For merchants, working with a payment facilitator can eliminate the need for extensive paperwork and underwriting, allowing them to start accepting payments within a much shorter timeframe. Payment facilitators can also handle the compliance process and monitor transactions for potential fraud.
Tips On Choosing A Payment Facilitator
When choosing a payment facilitator, look for one that offers competitive pricing and transparent fees. It's important for a company to provide responsive customer support and various payment options, including credit cards, e-wallets, and local payment methods.
Moreover, they should provide you with comprehensive reporting and analytics systems to track performance and trends. This way, you can be confident that you are getting the most value for your money.
Also, ensure the payment facilitator you choose can seamlessly integrate with your existing software to deliver a seamless user experience.