Overall, ISOs work as intermediary “resellers” of payment processors or acquiring banks to merchants, while PayFacs have a single account and absorb greater. These companies have. A Payment Facilitator, or PayFac, is a company that provides payment processing services to merchants looking to accept credit and debit cards. What PayFacs Do In the Payments Industry. Here’s how Visa defines payment facilitators and sponsored merchants: “PayFac or merchant aggregator, a payment facilitator is a third party agent that. With Fortis’ PayFac solution, software developers and merchants can leverage award-winning APIs and leading payment technology to scale their business. Blog 6 Ways Embedded Payments Benefit B2B Accounting SaaS. The value of all merchandise sold on a marketplace or platform. When you want to accept payments online, you will need a merchant account from a Payfac. So, revenues of PayFac payment platforms remain high. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. A PayFac (payment facilitator) has a single account with. However, the setup process might be complex and time consuming. However, the setup process might be complex and time consuming. The Payment Aggregator can quickly onboard a new merchant (typically a user of the SaaS offering) and they can begin. For example, an artisan. For example, an. Segregated accounts are legally segregated from the firm's assets, meaning the company cannot use the funds stored to conduct business operations. Moreover, in a sense, PayFac model relieved acquirers from merchant management functions, which they delegated to PayFacs. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. Global expansion Adapt to changing landscapes Stripe’s payfac solution A comparison Get in touch Technology has fundamentally changed how businesses, acquiring banks, and. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. The payfac accepts and processes payments on behalf of merchants (called submerchants in this context), through a contract with an acquirer. For example, an. For example, an. Qualpay offers a fully-integrated payment processing solution, including merchant account, payment gateway, invoicing and recurring payments. Our digital solution allows merchants. So, what. Payfac and payfac-as-a-service are related but distinct concepts. But of course, there is also cost involved. PayFac vs ISO: Contractual Process. Very rarely, said Mielke, do ISVs win with the “knee-jerk reaction of becoming a PayFac and capturing those additional revenues. 1. There is the opportunity for significantly more payments revenue by becoming a PayFac compared to becoming an ISO or referral partner. For example, an. Payfac: What’s the difference? Independent Sales Organization (ISO) is a third-party entity that partners with payment processors or acquiring banks to facilitate merchant services. PayFac vs. For some ISOs and ISVs, a PayFac is the best path forward, but. Principal vs. Payfac as a Service is the newest entrant on the Payfac scene. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. PayFac vs ISO: Contractual Process. PayFacs take care of merchant onboarding and subsequent funding. For example, an. The downside of this speed is the risk exposure in a breach; if a retail ISO is breached the acquirer steps in and shoulders most of the load. When choosing between a Payment Facilitator (Payfac) and a Merchant of Record (MoR) for your business, several key factors should be carefully considered: 1. An ISO is a third-party company that refers merchants to acquiring banks or payment service providers. For example, an. ISO vs. Visa vs. Payment facilitators have a registered and approved merchant account with the acquiring bank. Also, unlike an ISO, the PayFac provides the processing services, settlement of funds, and billing to the merchant. The North American market for integrated. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. However, the setup process might be complex and time consuming. However, the setup process might be complex and time consuming. PayFac vs merchant of record vs master merchant vs sub-merchant. However, the setup process might be complex and time consuming. However, the setup process might be complex and time consuming. Read More. Visa, Mastercard) around 2011 as a way for aggregators to provide more transparency into who their sub-merchants were. Payfac: What’s the difference?. ISOs. Next-generation ISO (or next-gen ISO) is a. As a result, PayFac or ISO must accept a higher level of accountability, which in the case of PayFacs maybe 100%. Recently, the concepts of PayFac and aggregators have started converging. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. The PSP in return offers commissions to the ISO. What is a PayFac? Benefits & Reasons Why Businesses Need One in 2023. 70. Comments on: ISO vs Payfac: Choosing the Right Payment Solution for Your BusinessA: Mastercard Send is the first-of-its-kind interoperable global platform that enables funds to be sent quickly and securely. 1. In particular the different approval criteria needed for the different. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. While there is some overlap between a payment processor and a PayFac, there are also some important differences you should be aware of (although this isn’t a fully exhaustive list!) Here are the top 6 differences: The electronic payment cycle Payfac-as-a-service is a turn-key payment facilitation model in which an external company provides businesses with the necessary tools and infrastructure to accept electronic payments, such as credit and debit cards, ACH, and echecks. For example, an. PayFac: How the Two Most Common Types of Payment Intermediaries Differ. For example, an. However, the setup process might be complex and time consuming. However, the setup process might be complex and time consuming. In an ever-changing economic world, we are helping businesses be successful today and well into the future. Registering as a payment facilitator (PayFac) or independent sales organization (ISO) have become popular options for SaaS companies looking for a comprehensive payment strategy. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. becoming a payfac. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. However, the setup process might be complex and time consuming. Touch device users, explore by. North America is a Mature ISV Market, Europe is Not. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Click here to learn more. e. Contracts ISOs and PayFacs sign different contracts with their clients. ISOs are an exceptionally important part of the payments ecosystem, serving a critical role that supports both their processing partners and their merchants. In this sub-merchant model, Payfac has a master merchant account under which merchants are signed up, as sub-merchants. However, the setup process might be complex and time consuming. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. According to SMB estimates. PSP = Payment Service Provider. An ISO (Independent Sales Organization) is similar to a PayFac in a lot of ways. Payment facilitation (Payfac) is a service that allows businesses to accept payments from their customers in a variety of ways. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. ISOs play an important role in the payment process, but many people aren’t sure what they are. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. For example, an. A PayFac, or payment facilitator, was originally defined by Visa® and Mastercard® to describe the entity that is officially doing business with the card brands. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. MSP = Member Service Provider. A payfac is a type of payment aggregator, but it typically provides a more comprehensive suite of services. An ISO contract with banks to provide credit card processing services. PayFac vs ISO: 5 significant reasons why PayFac model prevails. implementation of a payment facilitator model) calls for getting certified as one by the respective acquirer, and for. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. When setting up your referral partner program, remember to set tangible marketing and sales goals and do so in a way that makes sense for your partner. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. Benefits and criticisms of BNPL have emerged on several fronts. Each ID is directly registered under the master merchant account of the payment facilitator. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. The ISO is an intermediary signing up the merchants for the acquirer’s payment processing services. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. When you’re using PayFac as a service, there are two different solution types available. It’s more PayFac versus wholesale ISO model or full liability ISO. ISOs vs Payfacs. ISO. You may have also heard the name “Member Service Provider (MSP)”, which is the term Mastercard uses to call ISO. Learn more: PayFac vs ISO: which one to choose for your business? Benefits of becoming a PayFac. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Both offer ways for businesses to bring payments in-house, but the similarities end there. Typically, the ISO stays out of the contract between the two and instead focuses on the relationship with the payment processor. However, the setup process might be complex and time consuming. Payment Facilitator (PayFac) vs Payment Aggregator. No more, no less, and are typically a standalone service. Processor relationships. Clover vs Square. The Visa® merchant aggregation model covers all commerce types, including the face-to-face and e-commerce environments, and helps to increase electronic payment acceptance for merchantsA Payment Facilitator (PayFac) is a type of merchant services company that provides business owners with a way to accept electronic payments, both online and in-store. For example, an artisan. Find a payment facilitator registered with Mastercard. The submerchants and the PayFac enter into an agreement, and that agreement is not related to the PayFac’s agreement with the payment processing partner. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. ISO 23195, Security objectives of information systems of third-party payment services, provides an internationally agreed list of terms and definitions, two logical structural models and a list of security objectives. But of course, there is also cost involved. In contrast, a PayFac is responsible for the submerchants. Mastercard PayFac Models: The Ins and Outs of the “Big Two” Payment Facilitator Programs. Visa or MasterCard bank) member, but that has a relationship with an organization that is an Association member. In the PayFac model, banks that monitor PayFacs are called Acquiring Banks. They build the integration and then lean on the processing partner to. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. e. Difference #1: Merchant Accounts. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. For example, in an ISO relationship, you’re unable to customize the onboarding experience for your customers, but with managed payment facilitation, you can. PayFac vs. For example, an artisan. When you enter this partnership, you’ll be building out. ”. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. The merchant interacts directly with the ISO and follows their set processes to register and become. Onboarding workflow. Depending on your processing volumes there are two different types of merchant accounts that you will qualify for, either a PSP and an ISO. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Payfac and ISO models involve much more regulatory and compliance overhead than payfac-alternative models. An ISO or PayFac can earn millions of dollars from a portfolio of hundreds or even thousands of merchants, all taking hundreds or thousands of electronic payments per day. In fact, ISOs don’t even need to be a part of the merchant’s contract. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. PayFacs are businesses that resell merchant services on behalf of a payment processor, lightening the processor’s load and earning a slice of every transaction fee – known as a residual – in the process. All ISOs are not the same, however. In this hybrid payment facilitation model, the Payfac payment service provider becomes a Payfac with Sponsor Banks; they act as a master merchant account and are able to set up sub-accounts for merchants same-day. Pinterest. The choice between a PayFac and a payment processor depends on your business needs, industry, and desired level of support. Partnering with a PayFac-as-a-Service provider leaves the technical work like coding, compliance monitoring, and payment integration to industry. However, the setup process might be complex and time consuming. (ISO). . Until recently, SoftPOS systems didn’t enable PINs to be inputted. PayFac is more flexible in terms of providing a choice to. ISO vs. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. This model is ideal for software providers looking to. A payment processor serves as the technical arm of a merchant acquirer. PayFac registration may seem like the preferred option because of the higher earning potential. Thus, in contrast to an ISO, a PayFac model can consolidate transaction processing volume and unify internal processes. The ISO is an intermediary signing up the merchants for the acquirer’s payment processing services. While both types of merchant account providers can assist you with equipment and services, an ISO will provide you with your own merchant account, whereas a. Independent sales organizations (ISOs) are a more traditional payment processor. In this model, the issuer (having the relationship with the cardholder) and the acquirer (having the relationship with the Merchant) is the same entity. Acquiring banks willingly delegated them to payment facilitators in exchange for part of liabilities and residual revenues. A payfac is also responsible for underwriting and risk assessment, settling funds with submerchants, dealing with chargebacks and disputes, and ensuring compliance with regulations in the payment industry. ISOs never directly touch a merchant’s money as the money will flow directly from the payment processor to the merchant’s merchant. This solution involves you partnering with either (1) an acquiring bank or (2) an acquirer and a payment facilitator vendor. To learn more about the differences between these payment models, see our blog: PayFac vs ISO: Weighing Your Payment Options. Merchants need to. PayFac: ISO: Merchant onboarding timeline : Instant account approvals: Days or weeks : Sign-up process: Quick and easy. 5. On. However, the setup process might be complex and time consuming. PayFac: How the Two Most Common Types of Payment Intermediaries Differ April 12, 2021. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. However, the setup process might be complex and time consuming. Typically ISOs provide you with your own MID or merchant account, whereas Payfacs set you up with a sub-merchant account under their master account. In the PayFac model, banks that monitor PayFacs are called Acquiring Banks. Payments is an expert in embedded payment solutions, enabling SaaS businesses to monetize payments through its turnkey PayFac-as-a-Service solution. Modern PayFacs find it more profitable to integrate with just one processor/gateway and provide merchant processing services (onboarding, chargeback. e. PayFac-as-a-Service helps you hit the ground running and quickly onboard customers while adhering to compliance standards. Depending on your processing volumes there are two different types of merchant accounts that you will qualify for, either a PSP and an ISO. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Generally, a PayFac is a good fit for businesses that process less than $1 million in payment volume annually, while an ISO is well-suited for larger businesses that process more than this. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. PayFac-as-a-Service has emerged from payment companies and independent sales organizations (ISO) that have gone through the regulatory compliance of PayFac registration. In fact, ISOs don’t even need to be a part of the merchant’s contract. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. PayFac vs ISO. Payment Facilitator vs. For example, an. Generally speaking, a PayFac might be suitable for. ISO question. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. PayFacs are often more suitable for SMEs seeking a quick and straightforward setup. When PayFac became a buzzword among software platforms and the many businesses trying to sell to them, the meaning of the word started to blur. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. To ensure maximum relevancy, the logical structural models, assets, threats and security objectives in this document are based. An ISO, or independent sales organization, is a company that resells payment services to merchants on behalf of a payment processor or acquiring bank. Since it is a franchise setup, there is only one. PayFac: Key Differences & Roles in Payment ProcessingThe choice between a PayFac and a payment processor depends on your business needs, industry, and desired level of support. Typically, it’s necessary to carry all. Each ID is directly registered under the master merchant account of the payment facilitator. However, the setup process might be complex and time consuming. For example, an artisan. The contract is typically between the sponsor and the merchant, but the ISO may sometimes be included in a three-party agreement. Stripe was founded in 2010 by two Irish siblings: then 22-year-old Patrick Collison and younger brother John, 20, positioning itself as the builder of economic infrastructure for the internet — launching their payfac flagship product in 2011. Learn more: PayFac vs ISO: which one to choose for your business? Benefits of becoming a PayFac. When accepting payments online, companies generate payments from their customer’s debit and credit cards. Payfac as a Service providers differ from traditional Payfacs in that. To fully understand the benefits of the payment facilitator model, it’s important to first take a look at what goes into creating a standard payment processing agreement. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payfac-as-a-service vs. However, the setup process might be complex and time consuming. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. However, the setup process might be complex and time consuming. Some ISOs also take an active role in facilitating payments. Get notified when Stripe Reader S700 is available in your country. ISO = Independent Sales Organization. What is a payfac? A payfac, short for payment facilitator, is a type of provider in the payments industry that simplifies the process for other businesses to accept credit and debit card payments. 00 Payment processor/ merchant acquirer Receives: $98. For example, an. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. GETTRX’s Zero and Flat Rate packages offer transparent billing, competitive rates, and industry-leading customer service, making them ideal choices for businesses seeking a seamless payment experience. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Although each of these methods offer their own distinct advantages, understanding how they differ and which option is right for your specific. However, the setup process might be complex and time consuming. S. Can an ISO survive without becoming a PayFac? Becoming a PayFac (i. e. Our digital solution allows merchants to process payments securely. For example, an. It is when a business is set up as a primary merchant account and provides payment processing to its sub-merchants. Table of Contents Visa Global Acquirer Risk Standards: Visa Supplemental Requirements vi Visa Public 1 October 2018 Notice: This is VISA PUBLIC information. The differences of PayFac vs. You own the payment experience and are responsible for building out your sub-merchant’s experience. Second, because residuals are earned on. Why more and more acquirers are choosing the PayFac model. Strategies. Read More. An ISO, or independent sales organization, is a company that resells payment services to merchants on behalf of a payment processor or acquiring bank. ISOs rely mainly on residuals, a percentage of each merchant transaction. In other words, ISOs function primarily as middlemen (offering payment processing), while PayFacs are payment facilitation. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. While the PayFac model comes with some unique risks, the benefits of additional control and potentially higher margins have seen its popularity grow among two major categories of operators:. Independent sales organizations (ISOs) and payment facilitators (PayFacs) both act as intermediaries between merchants and payment processors, making them parallel channels in the overall payments ecosystem. For example, an. GETTRX absorbs the stress of fraud monitoring and compliance reporting while you focus on your business. Thought Leadership, Whitepapers Build Vs. In this post, we break down the differences between a few of the most common routes you can take when it comes to integrated payment models: independent sales organization (ISO), full-fledged payment facilitator (PayFac), or PayFac-as-a-Service (PFaaS) models. However, the setup process might be complex and time consuming. Payment Facilitators vs. ISOs mostly resell merchant accounts, issued by multiple acquiring banks. If you use direct charges, all Terminal API objects belong. PayFacs are generally more suitable for smaller businesses or those looking for a streamlined, integrated payment platform with faster funding times. In a similar manner, they offer merchants services to help make the selling process much more manageable. What’s the Difference Between a Payment Facilitator, a Payment Processor, and an Independent Sales Organization (ISO) At a glance, a facilitator, a processor, and an ISO may seem to be similar, but the differences are notable. PayFac vs. Unlike PayFac technologies, ISO agreements must include a third-party bank to sponsor the contract. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. So naturally, any company considering the option needs to make sure the investment they’ll make in the Payfac model makes sense financially. The Kiflo PRM vendor dashboard keeps partnership teams up-to-date on all partner activity. However, the setup process might be complex and time consuming. Use this document after completing your integration and certification testing and have started processing live transactions. The customer views the Payfac as their payments provider. The Traditional Merchant Onboarding Process vs. Smaller. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. While the PayFac model comes with some unique risks, the benefits of additional control and potentially higher margins have seen its popularity grow among two major categories of operators: traditional acquirers and independent software vendors. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. A PayFac, or payment facilitator, was originally defined by Visa® and Mastercard® to describe the entity that is officially doing business with the card brands. The distinction between wholesale ISO and PayFac is thusly less critical than the distinction between being a technology company and being a troglodyte. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. However, the setup process might be complex and time consuming. In contrast, PayFacs have one or two processor relationships and onboard ISVs as referral agents. But regardless of verticals served, all players would do well to look at. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. ISO vs. However, the setup process might be complex and time consuming. PayFac vs Payment Processors. The business has gone through the traditional setup of a merchant account in its name and is registered as a Merchant. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. One is an ISO or independent sales organization, and another is a PayFac or payment facilitator. As a result, the revenues, collected by a PayFac, are much larger than the revenues of a traditional ISO. They typically work with a variety of acquiring banks, using those relationships to "resell" merchant accounts to merchants. PayFac vs ISO. While an ISO product will sometimes take weeks to approve a merchant due to the more stringent and quite often paper-based application process, PayFacs are able to. On. However, they do not assume. Explore. 00 Retains: $1. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Stripe Terminal is fully compatible with Connect, enabling your platform or marketplace to accept in-person payments. For example, an. Independent sales organizations (ISOs) are a more traditional payment processor. For example, an. Like payment facilitators, ISOs serve as intermediaries to provide merchants with access to the payments system on behalf of their acquiring bank partners, often. Thus, an ISO’s customers can access a wider range of processors, even if the onboarding experience is tedious. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. But for this purpose, it needs to build a strong relationship with an acquirer that will underwrite it as a PayFac. For example, an artisan. For example, an artisan. Merchants get underwritten more efficiently, while acquirers are relieved of some merchant services, delegated to PayFacs for a reward. Now let’s dig a little more into the details. In this article we are going to explain why payment facilitator model is becoming so popular (attracting more and more entities) while ISO model is gradually dying out, vacating the space for new payment facilitators. ,), a PayFac must create an account with a sponsor bank. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Becoming a full payfac typically requires an agreement with a sponsoring merchant acquirer such as Worldpay, registering as a payfac with the card networks, becoming compliant with the Payment Card Industry Data Security Standard (PCI DSS. However, the setup process might be complex and time consuming. Avoiding The ‘Knee Jerk’. The most known examples are website-building companies which can provide integrated payment options, meaning ecommerce customers will see their experience improved as they will no longer need to actively look for third-party payment solutions. However, the setup process might be complex and time consuming. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Even better? Funds are settled to the PayFac’s account and it’s determined by the PayFac to move those funds to the merchant. This was around the same time that NMI, the global payment platform, acquired IRIS. An ISO is a sales partner for payment processors, while a payment facilitator offers payment processing services to merchants by aggregating them under one master account. 2. Here are the six differences between ISOs and PayFacs that you must know. A payfac or PF, short for payment facilitator, makes it possible for you to accept payments from customers in a variety of ways, including card payments,. Without ISOs, a relatively small handful of global and regional payment processors would each be forced to interact with thousands. Stripe is an ISO with First Data Merchant Services (FDMS, I believe now owned or controlled by Wells Fargo) doing the actual processing and, as such, assumes a different legal role than PayPal (which is a VAR for Paymentech). However, the setup process might be complex and time consuming. Unlike PayFac technologies, ISO agreements must include a third-party bank to sponsor the contract. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Today. e. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. For example, an artisan. Payment facilitators, aka PayFacs, are essentially mini payment processors. Traditional – where banks and credit card. Research firm Statista estimates payfac transaction volume totaled $88 billion last year,. Both the PayFac and ISO acquisition models have unique benefits and drawbacks. sales and maintain loyalty.