An electronic payment facilitator (PayFac) is a financial intermediary or organisation that simplifies payment processing for small merchants or businesses. The main goal of PayFac is to enable partners to accept payments faster and more efficiently: payment by card, e-wallet or other means. A payment processor provides similar services, but it works on a slightly different principle.
Let’s consider what a payment intermediary is, how it works, how a payment processor is structured and how they differ.
What is a payment processor?
The main task of a payment processor is to execute transactions between three parties. The parties involved in executing a payment transaction are:
- seller - a shop, a BC site, a casino, a service aggregator, and so on;
- issuing bank - a financial organisation that issued a card or a buyer's wallet;
- acquiring bank - the bank where the merchant account of the merchant is opened.
A payment processor, such as Billblend, not only handles the processing of financial transactions, but also provides the necessary software hardware to accept payments.
It can be said that the payment processor acts as an intermediary between the business and the banks that are involved in the financial transaction. On the merchant’s website, the customer enters payment details, the processor accepts the data, performs encryption, transmits the information between the payment participants and confirms or denies the transaction based on the responses received.
Modern online shops support different payment methods. Among the most popular are:
- credit and debit cards;
- electronic wallets;
- bank transfers;
- contactless payment;
- cryptocurrencies.
Billblend offers customers more than 70 payment methods. When entering into a partnership, you can enable all of these methods or choose only those that are most in demand from your customers.
What is a payment facilitator (intermediary)?
A payment facilitator (PayFac), like a payment processor, is an intermediary, but the key difference is that PayFac makes its own financial settlements rather than being part of the processing of bank transactions. Payment intermediaries simplify the registration process for merchants, making it faster and more accessible. Among the distinguishing features of the platform is the ability for businesses to register and accept payments for their services with minimal time and document collection.
The facilitator has already entered into an agreement with the bank and has an individual number under which merchants can register, without interacting with the bank directly. The partners of the payment facilitator are called sub-merchants.
Billblend as a payment intermediary offers customers:
- fast connection;
- a flat rate for connection;
- favourable tariffs.
It is necessary to emphasise the peculiarity of PayFac with accumulation of funds on an individual account, which are transferred to the bank not at the moment of transaction, but after a short time. If you choose an unreliable intermediary, there may be delays with the transfer of funds. Another peculiarity is the use of a universal payment terminal. If there are changes in functionality, they affect all sub-merchants.
Billblend acts as a reliable payment processor, offering partners modern payment methods and fraud protection. The advantages of the solution are free consultation, fast integration, flexible tariffs and a personalised approach. There is an opportunity to connect to trading accounts with a high level of risk.
What are the differences between a payment processor and a payment intermediary
The table below summarises the peculiarities of payment processors and intermediaries.
Aspect
Payment Facilitator
Payment processor
Connection
simpler registration form on the portal, which makes it easier for sellers to connect to the resource
More complex process as individual settings are used rather than generic settings
Trading account
all payments are made under a common account belonging to the provider, allowing merchants to use a single
a separate processing account is created for each partner
Responsibility
manages regulatory compliance, often sharing some responsibility with subcontractors
ensures compliance with payment network rules and regulations for individual merchant accounts.
Risk management
risk management is utilised on a collective basis for all subcontractors, it includes return risks and fraud protection
sellers are responsible for managing transaction risks
Data security
industry safety standards are used
safety standards appropriate to each partner’s area of work are utilised
Settlement period
clients get quick access to transaction settlements, usually no more than 1-3 days
Settlement terms may vary, from 1 to 3-5 days depending on the area of business operation and industry standards
Seller registration
faster access to the platform, as common settings are used without a customised approach
more complicated registration process, as the provider conducts a more thorough vetting process
A payment intermediary is needed by SaaS companies and platforms that offer different solutions to customers, such as selling services or goods. With this payment acceptance model, businesses get the maximum benefit and their customers get an integrated simple and secure payment process.
FAQ
What role does a payment processor play in transactions?
During a financial transaction, a payment processor encrypts data and sends data between the card issuing bank and the account servicing bank.
What is a payment intermediary?
A payment intermediary or PayFac is a service provider for merchant accounts, specifically software-as-a-service (SaaS) companies. The intermediary enables customers to conduct transactions on their platform by making payments to merchants.
What are the advantages of using Billblend?
The main benefit is that you can use one platform to aggregate multiple shops. This results in savings
How does PayFac make it easy to accept payments?
PayFacs system supports subcontractors, tracks transactions and adheres to set standards in operations. It simplifies payment acceptance because you don’t have to open a separate account for each merchant.
