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What Is PayFac Model And How Is It Beneficial For Businesses?

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What Is PayFac Model And How Is It Beneficial For Businesses

A Payment Facilitator, or PayFac, program is a type of financial services program that allows businesses to accept payments and manage the payment experience for their customers.

This type of program can be beneficial for those with an established base of customers who want to manage their own payment experience, as it can help to streamline the process and reduce costs associated with processing payments.

A PayFac program can also be beneficial for software platforms and venture capital or private equity firms wishing to generate a revenue stream from payments, as it can provide a way for them to accept and process payments from customers.

PayFac program could also benefit franchise owners by allowing them to outsource the management of their payments to a third-party provider, which could help to reduce costs associated with processing payments.

PayFac programs also offer many benefits for customers, including the ability to track payments, set up recurring payments, and view transaction history.

UniPay PayFac Pricing Model

Many companies are turning to PayFacs to process payments because they offer several advantages. By using a PayFac, businesses can avoid paying the higher fees that are typically associated with credit card processing.

PayFacs can also give software companies access to the revenue that would typically go to merchant services providers. This can be a significant profit for companies that rely heavily on credit card transactions.

In addition, PayFac programs offer more flexibility and control than traditional merchant services providers. This means that software companies can tailor the payment experience to their individual needs and preferences.

Finally, PayFacs can provide businesses with additional security and fraud protection. This is essential for companies that process large numbers of transactions.

As a result, they are an increasingly attractive option for software companies looking to accept payments.

  • There are several models of Payment Facilitator (PayFac) programs, each with its advantages and disadvantages:
  • The full-fledged payment facilitation model is when PayFac takes on the full liability for the merchant.
  • The white-label payment facilitator model is less complex and costly, but it does not provide the same level of liability protection.
  • The hybrid model is somewhere in between, offering a balance of complexity and liability protection.

PayFac in a box is the most straightforward and most affordable option, but it does not involve all of the features and benefits of the other models.

Businesses can choose the model that best suits their needs.

PayFac companies like UniPay Gateway make being a payment facilitator simple by offering total automation services and omnichannel payment technology.

They also usually offer omnichannel payment technology and take care of the management of the entire merchant lifecycle from start to finish, including underwriting and risk assessment.

As a result, businesses can focus on their core competencies and leave the payment facilitation to UniPay Gateway.

Not all PayFac companies offer these services, so it is essential to research which company would best fit a business’s needs. 

At UniPay Gateway, we understand that businesses need to be able to choose the services they want to delegate to their PayFac provider.

That’s why we offer a white-label platform that can be customized to suit your needs. From risk assessment and background checks to KYC processes and merchant underwriting, we can assist with all aspects of the payment process.

We also offer ready-made merchant onboarding forms and processes, so businesses can start processing payments immediately. And for added convenience, our platform can be white-labeled with your company’s logo.

We believe in providing fully automated merchant services fee collection and supporting various set-up configurations to suit your needs.

We offer transparent and honest revenue-sharing models, and our platform is fully automated, so businesses can focus on what they do best.

Our international payment solutions make it easy for businesses to expand into new markets. With merchant accounts in Canada and the United States, we can help you take your business to the next level.

Choose UniPay Gateway as your PayFac provider and enjoy peace of mind knowing that you’re partnering with a reliable and trusted leader in the industry.

Who Is UniPay PayFac Model Designed For? 

UniPay PayFac Model is designed for businesses of all sizes that sell physical or digital goods and services online. This includes businesses in a wide range of industries, such as retail, e-commerce, travel, and hospitality. 

The ideal business for UniPay Gateway PayFac program has a large number of clients, as this will allow the business to generate a significant amount of revenue through the fees associated with each transaction.

However, businesses of all sizes can gain profit from UniPay PayFac Model, as it provides a mere and efficient way to accept payments directly from their customers without having to go through a third party.

UniPay Gateway PayFac program is also a good choice for businesses that offer subscription-based services, as it provides a recurring revenue stream.

How Has the Payment Facilitator Model Evolved?

In the early days of online payments, businesses could only apply for a merchant account through a bank or other financial institution.

This was a cumbersome and time-consuming process, often taking several weeks to complete. Furthermore, the fees associated with these accounts were often quite high.

In response to this, independent sales organizations (ISOs) emerged as third-party providers of merchant accounts. However, these ISOs were often little more than resellers, with little involvement in the actual process of underwriting and onboarding merchants.

The process of underwriting and onboarding merchants was still costly and long.

This changed with the emergence of the payment facilitator (PayFac) model. Under this new arrangement, PayFacs actively take part in the process of approving and funding merchant accounts.

They manage background verifications, funding, chargebacks, reporting, monitoring, and underwriting. As a result, they can reduce the processing time to a matter of hours.

This new arrangement is beneficial for all parties involved, as it reduces costs and speeds up the process.

A Summary of the PayFac Model’s Advantages

There are six primary benefits to using a Payment Facilitator (PayFac) over an Independent Sales Organization (ISO).

  1. While an ISO or independent sales organization can simply process credit card payments, a PayFac can provide a wider range of services, including facilitating ACH transactions, helping with PCI compliance, and offering fraud prevention tools.
  2. PayFacs offer consolidated volume and unified operations, leading to economies of scale and improved efficiencies.
  3. Because PayFacs consolidate the volume of many different merchants, they can often offer better processing terms and higher revenue shares than ISOs.
  4. PayFacs are also generally more accessible to smaller businesses that might not otherwise be able to qualify for a merchant account.
  5. Because they offer such valuable services, PayFacs typically increase the valuation of a company.
  6. Finally, as more and more platforms and acquirers look to offer PayFac programs, it’s becoming more accessible than ever for businesses to find a PayFac that meets their needs.

Consequently, it’s no surprise that increasingly more platforms and acquirers are beginning to offer PayFac programs. Consult our experts for the details.