Payfacs: what are payment facilitators?
By Mariana Almeida Marques
Digitalisation has made life easier for everyone. In the payments industry, however, digital advancements force companies to keep updated with the latest payment technologies in order to meet and exceed customer expectations. As the range of payment services and tools continues to expand, it becomes necessary for businesses to simplify their operations.
What are payment facilitators?
Payment facilitators, payfacs or PF can be compared to a master merchant processing account. They offer each merchant a sub-merchant platform where they have access to all the services they need to process payments. Merchants that are signed to a payfac don’t need to have their own Merchant ID, as transactions are aggregated under the payfac’s master ID.
Payfacs act as an mediator between companies and all the payment services, tools and technologies available. They make it easier, faster and cheaper for companies to deploy payment technologies and functionalities, as companies don’t have to individually establish and maintain partnerships with payment players. Some payfacs like PayPal have their own payment gateway, processor and merchant account, whilst others work simply as a middleware for businesses and providers, such is the case of Imburse.
Advantages of using Payfacs
Traditionally, companies would have to establish individual partnerships with each payment service, and deploy technologies in-house using their own resources. As the payments industry advances, it becomes increasingly harder to manage multiple partners and services, as each integration requires a lot of time, heavy paperwork, human and financial resources.
Enter payfacs. There are multiple advantages to using a payfac rather than doing all the integrations on your own: saving money, time and resources are a few of them. Payfacs like Imburse, for example, do all the heavy work so companies don’t have to. This means your company can connect to any payment service and deploy technologies without the hassle of integrations.
Tools and functionalities
Besides, some payfacs are packed with a lot of essential tools to optimise your payments system- take auto-reconciliation for example. Reconciliation is a laborious accounting process that requires a lot of human resources and is prone to manual errors. By making this process automated, you can save a lot of time and resources, but also make it easier to spot errors, comply with regulations and better monitor your cash flow. Other functionalities can include mandate management, data analysis and tokenisation- all of them highly useful for your company to enhance its payment system and internal operations.
Compliance with regulations
Compliance with regulations is a matter of high concern for any financial company. As regulations are constantly being updated, it is critical to ensure full compliance with all the latest directives so you can protect your customers and prevent reputational damages. All payfacs should be PCI-compliant, which means that you won’t have to do anything yourself in order to comply with PCI- the payfac takes on that responsibility for you. Some payfacs also offer the possibility to white label their services, so that customers can only see the merchant’s name and won’t see any of the payfac’s information. This is naturally beneficial for your company to keep its name recognisable.
Types of platforms that use payfacs
Any company that takes payments can use payfacs. Though Imburse works closely with the banking and insurance industry, we are happy to partner with companies in any market. Other industries that can benefit from partnering with a payfac are retail and e-commerce, travel, booking and on-demand services, amongst others. Essentially, any company that sells products or services online.
Though it may not be the main business focus for companies, payments is an increasingly important area to nail. Having an efficient and modernised payments system will allow your company to provide seamless checkout experiences, effective customer service and, ultimately, to differentiate yourself from the competition. Not having it, on the other hand, may make your customers choose other companies to buy services from.
How Imburse can help you
Imburse connects you to the entire payment ecosystem. Once you connect to us, you can integrate any payment technology or provider into your own payment system, avoiding the hassle of single-integrations. Our solution allows companies to have the freedom they need to keep up with a rapidly changing market, ensuring they provide the best possible customer service at all times.
Aside from being able to connect to any payment player, our platform offers you a broad range of management tools and functionalities to fully enhance your payment operations. From smart routing to auto-reconciliation and data analytics, you can access all the tools you need from day one. This is particularly helpful for your company’s treasurers, who will be able to work more efficiently at zero cost.
Payments is an essential part of any company, but we understand that your resources may be better allocated to other business areas. That’s why Imburse takes the responsibility to make it all work for you, and gives you a fully flexible platform that can fulfil your business’s needs and growth plans. If you would like to know more about Imburse or request a demo, do reach out to our team below.