Business

The PayFac Model

Have you been interested in an additional revenue stream from payments? Or maybe you own a franchise and want to earn money on top of the payment services provided by your business? Do you have an already established consumer base as a private equity or venture capital firm that requires certain payment functionality? Or do you want to generate additional value to take part in the merchant life cycle as a wholesale ISO? Even if you do not classify yourself as one of the above company types, if you want to manage your customers’ payment experience, then our payment facilitator program can provide advantages that may prove helpful for your business.

Benefits of the United Thinkers Program

The payment facilitator model allows companies to be more involved with the revenue from various merchant services. This is primarily one of the reasons why this model has become more widespread.

Currently, a payment facilitator can operate in many different ways and model types. These include the usual payment facilitator, white-label payment facilitator, hybrid PayFac, and PayFac in a box. Considering the many choices available, it is important to choose the PayFac model that will best suit your business interests and enhance its functionality. Thanks to companies like United Thinkers, this choice can become significantly easier for you to make.

Part of United Thinker’s UniPay Gateway omni-channel payment technology is a fully functional payment facilitator program. This could also be viewed as UniPay offering PayFac as a service. What we offer is basically the full automation of the entirety of the merchant lifecycle, including the underwriting, onboarding, risk assessment, funding, etc.

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Our model allows your business to let us worry about several of the key responsibilities, specifically concerning PayFacs. Our team can provide the following capabilities for your business:

  • Offer a fully operational and complete white-label platform.
  • Assist your business with specific processes such as merchant underwriting, KYC processes, background checks, and risk assessment for your business.
  • Provide API for merchant onboarding, including premade onboarding forms. A merchant can instantly start processing once the form is completed and they are subscribed to a payment facilitation service.
  • Provide completely transparent merchant statements with your company’s logo.
  • Provide the functionality for automating the collection of merchant service fees.
  • Support several different configurations.
  • Ensure honesty and fairness in revenue sharing. We are more than happy to share payment processing profits with you. You will be able to profit off of the payment services you provide.

Who Can Benefit From Our Program

Businesses with multiple clients providing products are the best suited for this PayFac model implementation. These clients can also be sub-merchants. Examples of some companies benefitting from the PayFac implementation are the following:

  • Software platforms and SaaS companies
  • Franchisors
  • Owners of online marketplaces
  • ISOs
  • Private equity firms and venture capital firms

Overall Advantages Provided by the PayFac Model

  1. Generally, PayFacs have a wider range of functions than what an ISO is capable of. ISOs just deal with reselling merchant accounts, while PayFacs take a more active approach in the merchant lifecycle.
  2. ISOs usually partner with several acquirers and processors in order to be able to refer different merchants from certain industries to specific acquirers with the proper MCC code. In contrast to an ISO, a PayFac usually partners with one or two acquirers. This way, a PayFac can have a consolidated transaction processing volume and more unified operations.
  3. It is generally more profitable for a PayFac to offer its services, including merchant and gateway services, as one complete package and support a single acquirer. Due to this, it is, on average easier for PayFacs to negotiate better processing terms for themselves and their sub-merchants and increase their earned residual revenue.
  4. The PayFac model is more accessible to several company types, including ISVs, SaaS platform providers, franchisors, and ISOs. The only thing that is really necessary to make more money from merchant services as a PayFac is a sizable consumer base.
  5. Most of the software and SaaS platforms are also recognized as so-called “growth companies.” They attract new possible investors based on a regular evaluation of the company. This value is usually based on the company’s annual revenue. Since the PayFac model can easily create an additional source of revenue, the overall revenue of the company will also increase, thus resulting in a higher apparent value of the company and a more appealing appearance for incoming investors.
  6. As the various benefits the PayFac model can provide are becoming more widely known, the popularity of this model also increases. This provides an incentive for processing platforms to also participate, offering PayFac models to those willing to also utilize the advantages of the PayFac model.
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Feel free to contact our experts for more information on the PayFac model.

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