Payment Facilitator
Definition
A payment facilitator (PayFac) is a master merchant that enables sub-merchants to accept payments without each obtaining their own merchant account.
How It Works
The PayFac signs a single merchant agreement with an acquiring bank, then onboards sub-merchants under its master MID. Transactions are processed through the PayFac's infrastructure, which handles underwriting, funding, and compliance on behalf of its sub-merchants.
Why ISVs Care
Becoming a PayFac lets ISVs own the payment experience, earn revenue on every transaction, and control onboarding speed. However, it also means taking on liability for sub-merchant fraud and regulatory compliance, making it a significant operational commitment.
A payment facilitator (PayFac) aggregates merchants under a single master merchant account, streamlining onboarding and enabling ISVs to monetize payments directly.