Interested in learning more about Payment Facilitators (Payfac)? You've come to the right place! In this article we will break down some of the most important statistics concerning Payment Facilitators so you can get an idea of how they work and how successful they are today.
As you can imagine, it is very difficult to give an exact number as to the amount of Payfacs currently operating in the industry. While companies like PayPal and Square are known as the major startups that have succeeded, there are dozens of apps, as well as countless other companies that are serving this purpose. Even Amazon's marketplace acts as a payment facilitator when it comes to handling outside transactions.
In the past, people purchased goods and services from local companies where they had quick recourse if a purchase went awry. With today's online marketplace, the idea of handing out your credit card number to unknown entities across the web is quite scary. Unfortunately, traditional ISO's were slow to pick up the technology necessary to handle these online changes. Thus, payment facilitators like PayPal stepped in to provide consumers with a better option.
These Payfacs offer better security and more options for returning your money if something goes wrong or a fraud is suspected. In addition, with more businesses starting up every day thanks to the gig economy, traditional ISOs have been unable to keep up with the demand for new accounts and merchant services. Payfacs have taken a bold stand and risen up to meet this demand.
There has been a lot of discussion about the role of Payfacs and legislation. Most importantly, the argument of whether or not Payment Facilitators must be licensed or registered before they begin handling transactions. Throughout most of the US, licensure is not required because the payment processor is not necessarily a banking institution unto itself. Instead, it is an agent of the merchant and is solely responsible for transferring money from one place to another using software. Many Payfacs are actually tech and software companies with little banking infrastructure.
For those looking for Payfac Payment Facilitators, the solution usually comes from a software vendor, not a bank. With integrated software solutions that cover everything from ERP to CRM, throwing in payment facilitation is just the software vendor's way of providing complete solutions.
Shannon is currently the SVP Sales and Business Development for GlobalOnePay, a division of Pivotal Payments Inc. His goal is to establish strategic partnerships with sales organizations that specialize in the eCommerce space globally. As commerce shifts online, there is exceptional growth potential that Shannon can help ISVs, SaaS, Marketplaces and platforms tap into, to drive payments into profits.