What Is a Payment Facilitator and How to Become One ?

The world of online payment is filled with various technical terms and jargon that can be confusing for beginners and veterans alike. Take the term ‘payment facilitator’ as an example: what actually is the difference between payment facilitator, payment processor, and payment gateway? 

All these three terms are (mistakenly) often used interchangeably with one another, adding further to the confusion.

Here, we will specifically discuss the concept of payment facilitator, and how you can be a visa or MasterCard payment facilitator in no time. 

What Is a Payment Facilitator

What Is a Payment Facilitator? 

To put it simply, a payment facilitator (sometimes called payfac), is a company that provides service for online businesses/merchants that want to accept payments online. Websites like https://merchantalternatives.com/merchant-services/merchant-accounts/credit-card-processing-high-risk/ allow merchants to check out the options available to them when it comes to credit card processing and who to trust! One of the two main ways for merchants to easily accept payments online is to get a merchant account from a payment facilitator.

Notice that we’ve mentioned one of the two ways, because indeed, there are two main methods for online merchants to accept payments: 

    1. Payment processor: a payment processor will connect you to the credit card acquirer directly. The payment processor will set you up with your own merchant account which will provide more versatility and the ability to custom-tailor your payment process according to your and your customer’s needs. They are also often called MSP (Member Service Provider) 
  • Payment facilitator: in this model, the payment facilitator will handle many different online merchants and will give you a merchant account under them. PayPal and Stripe, for example, are two common examples of payment facilitators. Another term used to describe a payment facilitator is PSP (Payment Service Provider).

A key advantage of using a payment facilitator over a custom payment processor is that it’s typically more affordable and the process of getting one is much easier. The payment facilitator has been pre-approved for a master account with a card publisher (Visa or MasterCard), or an acquirer. So, merchants can sign-up under this facilitator as a ‘sub-merchant’, bypassing the lengthy and difficult qualification process. 

While you can use a payment processor to get an individual merchant account, this is often a very lengthy process, and this is why using a payment facilitator is preferred for most businesses. 

Why a Payment Facilitator Is Necessary? 


As discussed, in the early days of the internet, businesses that want to accept online payments must get their own merchant accounts from their banks or with the help of payment processors. This can be a lengthy process, and the service of a payment processor (MSP) in the past was relatively expensive. So, typically only larger businesses with significant transaction volume would find this method worth it. 

Now, however, both payment processors/PSPs and payment facilitators are more affordable, and both can be a viable solution even for smaller businesses. 

However, for smaller merchants (and individuals who just want to sell something online), applying for an individual merchant account can be very time-consuming. This is where payment facilitators come in, allowing merchants to accept payments using themselves as the ‘master account’, so these merchants can use their existing infrastructure. 

So, with a payment facilitator, businesses can begin accepting online payments and especially credit card payments more quickly and in a much more affordable way.  

So, when it comes to the pros and cons of using a payment processor or payment facilitator, there are several benefits of using a payment facilitator: 

  • You will get approved far quicker, and some facilitators even offer immediate approval
  • You don’t need a separate bank account for your merchant account, which might translate into other issues
  • Typically, better integration with various online businesses, and typically bundles a payment gateway
  • Easier to use than most payment processors/MSPs, so web developers tend to prefer these facilitators

What about the cons? In general, the biggest downside to using a payment facilitator is cost: typically, you’ll pay more to use a payment facilitator than a payment processor in exchange for the ease of approval and convenience. 

Becoming a Payment Facilitator

Many software companies are now exploring the possibility of generating more revenue and better supporting their users by adding payment facilitator services to their existing offers. This is why the payment facilitation industry has been the most popular and fastest-growing payment facilitation model in the past decade.

So, the question is, how can you start a payment facilitator business? 

The short answer is to fulfill the compliance requirements of customer identification programs, and even after that, you are going to be routinely audited. This is where a payments consultant like RPY Innovations can help you become a payment facilitator

  1. Registration and Approval as a Payment Facilitator

This can be a very complex process in becoming a payment facilitator, and the application process itself can be lengthy with very detailed examinations. In this case, you can’t get help from banking institutions due to potential conflict of interest. This is where getting the help of a consultant with a high application acceptance rate can be very important. 

2.  Policy Implementations

To be approved as a payment facilitator, the company would need to implement various procedures in accordance with policies and standards to ensure compliance as a MasterCard or Visa payment facilitator and to other government regulations. 

3. Education

Since your business is going to be audited regularly after you’ve been approved as a payment facilitator, then it’s necessary to train your team to stay compliant (and also profitable) as a payment facilitator. This includes familiarizing everyone with payment-related vocabularies that enables your existing team to communicate effectively in the payment facilitation industry. 

End Words

With online businesses becoming the norm nowadays, a fast and easy payment process is now a necessity. A payment facilitator model ensures any businesses—big or small—can offer the same type of payment options to any customers with ease. 

If you are a business currently looking to provide your customers with a broader range of payment options, then a payment facilitator can be a good solution. Similarly, becoming a payment facilitator can be an interesting opportunity to explore, and payment project consultants like RPY innovation can help you become a payment facilitator with a 100% approval rate. 

Author Bio

Ali Dino is the SEO expert, Blogger, and content writer, who writes about the business, health, technology, and finance. He writes for various online publishers because he loves to share his knowledge and experience with the people in this global village that’s why he has developed a blog where he shares the news related to mentioned topics more frequently & the blog is https://bhtnews.com/