Payment Facilitator (PayFac)

A payment facilitator, also known as a PayFac, is a financial services entity that enables businesses to accept electronic payments from their customers. Acting as a middleman between merchants and payment processors, PayFacs simplify the process of accepting payments by streamlining the onboarding and underwriting procedures.

Role and Function

Payment facilitators play a critical role in the payment ecosystem by providing a simplified and efficient solution for businesses to accept electronic payments. Traditionally, businesses seeking to accept payments would have to establish individual merchant accounts with payment processors, which involved a complex and time-consuming application process. PayFacs eliminate this burden by aggregating multiple merchants under their own master merchant account, allowing businesses to quickly and easily start accepting payments.

As a PayFac, the entity assumes the responsibility of underwriting and risk management for the merchants it serves. This involves evaluating the financial stability, creditworthiness, and compliance of each merchant to ensure they meet the necessary requirements. By taking on this role, PayFacs provide a valuable service to smaller businesses or those with limited resources, as they may not have the expertise or infrastructure to handle these processes independently.


The rise of payment facilitators has brought numerous benefits to both merchants and consumers. For merchants, the primary advantage is the ease and speed of onboarding. PayFacs typically offer a straightforward application process, enabling businesses to start accepting payments within a short timeframe. This convenience is particularly advantageous for startups, small businesses, and those operating in industries with higher risk profiles.

Furthermore, PayFacs often provide additional value-added services to their merchants, including reporting and analytics tools, fraud prevention measures, and customer support. These services enhance the overall payment experience for merchants, allowing them to focus on their core business activities while leaving the complexities of payment processing to the PayFac.

From a consumer perspective, payment facilitators contribute to a seamless and secure payment experience. By leveraging their expertise in risk management and compliance, PayFacs help safeguard sensitive customer data and protect against fraudulent activities. Additionally, PayFacs offer a wide range of payment options, including credit cards, debit cards, and digital wallets, ensuring that consumers have the flexibility to choose their preferred payment method.


Payment facilitators have revolutionised the payment landscape by simplifying the process of accepting electronic payments for businesses of all sizes. Through their role as intermediaries between merchants and payment processors, PayFacs offer a range of benefits, including quick onboarding, risk management, and value-added services. By leveraging the services of a PayFac, businesses can focus on their core operations while providing their customers with a seamless and secure payment experience.