As online payments become increasingly prevalent in today’s digital economy, businesses are looking for efficient and reliable ways to manage their payment processing. Two options for businesses looking to handle online payments are using a Payment Facilitator (PayFac) or becoming a Payment Facilitator themselves.

In this blog, we’ll explore the benefits of using a Payment Facilitator versus becoming a Payment Facilitator.

What is a Payment Facilitator?

Before we dive into the benefits, let’s first define what a Payment Facilitator is. A Payment Facilitator is a company that provides payment processing services to businesses, typically small to medium-sized businesses. The Payment Facilitator simplifies the process of accepting electronic payments by providing businesses with a single point of contact for managing all their payment transactions.

Benefits of using a Payment Facilitator

1. Faster setup time: One of the most significant benefits of using a Payment Facilitator is the quick setup time. Payment Facilitators handle all the technical aspects of integrating payment processing into your business. This means that businesses can start accepting payments within a matter of days, rather than the weeks or months it might take to set up payment processing on their own.
2. Reduced costs: Payment Facilitators offer economies of scale that can significantly reduce the cost of payment processing for small to medium-sized businesses. Payment Facilitators leverage their existing relationships with payment processors to negotiate lower processing rates for their clients. This can result in substantial savings for businesses.
3. Simplified compliance: Payment processing can be complex and requires adherence to strict compliance regulations. Payment Facilitators take on the burden of ensuring that all payments are processed in compliance with regulatory requirements, reducing the risk of non-compliance and potential fines for businesses.
4. Enhanced security: Payment Facilitators have dedicated security teams that ensure that all payment processing is secure and protected against fraud. This provides an added layer of protection for businesses and their customers.

Benefits of becoming a Payment Facilitator

1. Increased control: By becoming a Payment Facilitator, businesses have complete control over the payment processing experience. This allows businesses to customize the payment experience to match their brand and user experience.
2. Additional revenue streams: Becoming a Payment Facilitator can be a significant revenue stream for businesses. Payment Facilitators earn a percentage of the transaction fees charged to businesses using their services.
3. Greater flexibility: As a Payment Facilitator, businesses can offer a wider range of payment options to their customers. This can be particularly beneficial for businesses that operate in multiple countries and need to offer localized payment options.
4. Enhanced customer relationships: By becoming a Payment Facilitator, businesses can build deeper relationships with their customers. Payment Facilitators can offer value-added services such as subscription management, customer support, and other value-added services that can improve customer satisfaction.

Conclusion

Choosing whether to use a Payment Facilitator or become a Payment Facilitator is a significant decision for any business. While there are benefits to both options, the choice ultimately comes down to the unique needs and goals of each business. For businesses looking for a quick and cost-effective way to start accepting electronic payments, using a Payment Facilitator can be an excellent option. For businesses looking to build additional revenue streams, increase control over the payment experience, and deepen customer relationships, becoming a Payment Facilitator may be the way to go.