Payments
Payment facilitator (PayFac)
Updated
A payment facilitator is a company that signs up merchants under its own acquiring relationship, so they can take cards without opening their own merchant account.
A payment facilitator sits between merchants, called sponsored merchants, and an acquiring bank. It onboards and underwrites them, takes their payments through its own relationship with the acquirer, and pays them out. That is what lets a new store accept cards in minutes rather than weeks.
The facilitator takes on duties the acquirer would otherwise have. Visa's Merchant Data Standards Manual says a payment facilitator must evaluate the business of every sponsored merchant and assign the merchant category code that fits it, and Visa's rules add registration requirements for facilitators that sponsor high-integrity risk merchants.
A payment facilitator is not the same as a merchant of record. The sponsored merchant still sells to the customer in its own name; the facilitator provides the payment acceptance.
Frequently asked questions
- What is the difference between a payment facilitator and a merchant of record?
- A payment facilitator lets merchants accept cards under its acquiring relationship, but the merchant still sells in its own name. A merchant of record is the legal seller of the transaction.
- Who assigns the MCC under a payment facilitator?
- The facilitator. Visa says it must evaluate each sponsored merchant's business and assign the most appropriate code.