What is (PFaaS) — by Mastercard
- A Payment Facilitator (PayFac) is a model that enables businesses to simplify the merchant onboarding process by allowing a master merchant to process payments for multiple sub-merchants under a single account. This eliminates the need for each merchant to establish their own acquiring relationship.
- PFaaS is the next evolution of the PayFac model, providing businesses with a ready-to-use infrastructure. Instead of building and managing complex risk, compliance, and payment processing systems, PFaaS allows companies to leverage an end-to-end service.
- : Businesses had to work directly with acquirers, leading to long onboarding processes and high setup costs
- : Payment Service Providers (PSPs) streamlined payment acceptance by allowing businesses to process transactions under one umbrella account, but underwriting and onboarding were still complex.
- : By the early 2010s, PayFacs enabled faster onboarding of sub-merchants, lowering compliance risks and simplifying payments.
- : The model evolved to offer PayFac capabilities as a service, helping platforms, ISVs, and software providers integrate payments effortlessly.
:
1️⃣ Acquirers
- Financial institutions that provide merchant accounts and settle funds for transactions.
2️⃣ Payment Facilitators
- The master merchants that onboard sub-merchants, handle transactions, and ensure compliance with regulatory requirements.
3️⃣ Sub-Merchants
- Businesses or individuals that process payments through the PayFac’s infrastructure.
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