Resultsbee.com

A merchant service provider that streamlines the application process for merchant accounts is known as a payment facilitator. One of the technological advancements that have upset the balance of power in the merchant services industry is payments facilitators, or PayFacs.

The lists are around the same size, with 232 payfacs in Europe and 244 in North America. The makeup of the two payfac lists differs significantly, though, and they think that this distinction reveals an intriguing fact about how these two payment platforms have evolved.

A traditional merchant account is upfront underwritten under the payment processor paradigm, resulting in the approval or denial of the merchant's application. When using a payment facilitator, the underwriting process is ongoing, therefore underwriting takes place as each transaction is made possible.

The distinction between a payment processor and a payment gateway is that the former is the service provider that facilitates the transaction, whereas the latter is the communication channel in charge of safely transmitting the payment data to the networks for the credit card companies and payment processors.

The company offering third-party payment services is called PayFac or the Payment Facilitator Payment service provider. It would have a contract with the acquiring bank and register the merchant on a sub-merchant account. As a result, it would set up communication between the merchant and the purchasing bank.