What is a Payment Facilitator?
A sub-merchant platform involves a Payfac that has been pre-approved for one master merchant account with an acquirer. They are then able to sign-up merchants underneath their master account as sub-merchants, thus expediting the process. Merchants used to (and still can) get individual merchant accounts, but it can be a very cumbersome process, which is why Payfacs adopted this other model.
This has made it far easier to sign-up for a merchant account. Merchants can fill in a small online application, get evaluated by an underwriting tool, and then be boarded as a sub under the master account. This model is also appealing to merchants as the risk is on the facilitator, as they hold the master account.
Payment Processing or Payment Facilitation
The primary difference between payment facilitators and payment processors is how the merchant account is given. With a Payfac, each business is assigned a merchant ID underneath the Payfac. Typically, this is a fast onboarding session and easy setup.
Payment processors rely on ISOs to provide merchant IDs. This can be a longer onboarding process but has value in price and flexibility. Some common payment facilitators are PayPal, Stripe, and Square.
Payment facilitators were created to streamline the merchant onboarding process, allowing underserved merchants to accept payments using their infrastructure. By simplifying the process, a Payment Facilitator can have a small merchant up and running in no time, setting them up as a sub-merchant on their platform.
Every new merchant account comes with a unique number – called the Merchant Identification Number (MID), that identifies an online merchant processing payments through a network. The PayFac MID is the “parent” and the merchant the “child.” Payment Facilitators provide infrastructure for merchants while remaining invisible to their customers, who will only see the merchant’s name on their receipts.
Volume-based solutions with Payment Facilitators
Besides lower and more transparent costs, a payment processor can provide a single secure gateway for multiple payment methods. Think debit, credit, EFT, or new payment technologies like Apple and Google Pay. It can also provide risk-management services and access to multiple POS solutions.
As you start generating higher revenue, there are benefits to opening your merchant account instead of having a sub-merchant account under a Payment Facilitator. The main one being that you’ll probably get better per-transaction rates. As a business owner, you know all too well that every dollar counts. A Payment Processor will connect you to the acquirer directly. This will set you up with a master merchant account with your own unique MID.
Having your own merchant account is more stable than sub-merchant accounts like PayPal, Square, and Stripe. When you don’t share your account with other businesses, you can generally expect funds from your merchant account to be deposited into your business bank account within 1-2 business days.
Some PayFac Costs to Consider
The convenience of payment facilitation comes at a premium. For example, PayPal, Square, and Stripe all take 2.9% + 30¢ per transaction. On a $1,000 purchase, that’s $29.30 that you can kiss goodbye. And that doesn’t include any costs for purchasing or leasing POS systems.
Each company has a different pricing structure. In total, you will need to pay the card brands their fees and the processors their fees. To learn more, check out our pricing.
The Payline Solution
Payline Data accepts most credit and debit card payments, virtual cards, e-checks, and ACH transfers. By processing payments through Payline, business owners can get their merchant account, payment gateway, credit card and virtual terminals, and more. And, unlike many of its competitors, Payline features affordable and transparent pricing without long-term contracts.
Easy to set up, integrate, and use, Payline is an excellent option for small-business owners looking for an affordable payment processing option. Here are a few of the benefits that Payline provides:
- Affordable, transparent pricing: Payline Data offers interchange-plus pricing on credit card payments with a small monthly fee. Check out our pricing calculator to see what you’ll pay.
- Payment gateways: If eCommerce is part of your business, you’ll need a payment gateway to process payments online. Since we are an ISO and not a Payfac, Payline provides a proprietary solution that integrates with over 175 different eCommerce platforms and shopping carts. Accept credit, debit, and electronic payments, process invoices, and schedule recurring payments. Manage multiple merchant accounts, save customer payment information, process large batches of transactions at once and manage inventory.
- Easy integration: Payline Data solutions integrate with a variety of ecommerce platforms and POS systems, making it easy for developers to integrate Payline solutions into a variety of software.
- POS and virtual terminals: Payline Data sells a variety of credit card terminals for online and in-store payments.
- Security: Payline provides layers of protection with security measures at checkout that limit your liability and exposure to fraud and charge-backs. Card-not-present customers must verify their address and CVV before completing a transaction; a Built-in fraud solution evaluates payment history to help differentiate between legitimate and suspicious purchases.
- Customer service: Best-in-class customer support gives Payline customers support via phone, email, and various online FAQs, guides, and tutorials.
- Business loans: In addition to payment processing and related services, Payline can help your business find the financing you need to keep up with growth and shifting market conditions. Fill out a simple application and get connected with over 75 different lending partners. Then, view your loan options through your Payline account and receive funding in as little as 24 hours.
- High-risk accounts: Payline takes the time and care to understand and accommodate the unique needs of all the merchants and industries that we work with. We’ll walk you through the application process for a high-risk merchant account. And if approved, we’ll maintain that account, and help you begin to grow.
Payline offers all this and more with affordable and transparent pricing. Easy plugins connect to POS systems, shopping Carts, Quickbooks, and the card reader of your choice. Your first month with Payline is FREE, with no risk, no upfront fees, and no long-term contracts or cancelation fees.