When you swipe a credit card, transfer money, or make an online purchase, there’s an inherent belief that the system will handle these transactions efficiently and accurately. 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 artisan. 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. There isn’t much of a debate in terms of functionality in the larger payment processor vs. 26 May, 2021, 09:00 ET. 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. PayFacs take care of merchant onboarding and subsequent funding. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payment facilitators have a registered and approved merchant account with the acquiring bank. 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. As a result, the revenues, collected by a PayFac, are much larger than the revenues of a traditional ISO. April 12, 2021. For example, an artisan. Most businesses that process less than one million euros annually will opt for a PSP. In the PayFac model, banks that monitor PayFacs are called Acquiring Banks. 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 of the main benefits to adopting the Payfac ® model is the increase in revenue you get from each transaction processed using your software. 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. Although each of these methods offer their own distinct advantages, understanding how they differ and which option is right for your specific. PayFac: Key Differences & Roles in Payment Processing A payment facilitator (payfac) is a service provider for businesses that simplifies the merchant-account enrollment process. ISO vs. S. For some ISOs and ISVs, a PayFac is the best path forward, but. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. 4. Today’s PayFac model is much more understood, and so are its benefits. 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. On. Payfac-as-a-service vs. For example, an. However, the setup process might be complex and time consuming. In essence, a PayFac is an agent for a payment processor, but a unique twist to the. The PayFac, he said, has emerged, and evolved from its 1990s underpinnings where merchant acquirers had handled that merchant enrollment, boarding, underwriting and even settlement. Payments is an expert in embedded payment solutions, enabling SaaS businesses to monetize payments through its turnkey PayFac-as-a-Service solution. 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. La respuesta corta; es un proveedor de servicios de pago para comerciantes. Jorge started his payment journey 15 years ago. ISOs and ISVs are both B2B providers, working with merchants and the companies who serve them. 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 artisan. PayFac: Key Differences & Roles in Payment Processing Read more Top 4 Benefits of Being an Independent Sales Agent Read more Why Becoming a Sales Agent in the Payments Industry is a Great Job Opportunity! Read more How to Become a Successful Sales Agent in the Payments Industry. 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. 1. 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 (Independent Sales Organization) are two terms that are often confused with each other when it comes to payment processing. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. Read More. While there are advantages to taking on high risks, such as greater flexibility. Maybe you are ready to become a full-fledged PayFac, maybe the answer is a managed PayFac, or maybe the best solution would be to act as an ISO. Both PayFacs and ISO’s (independent sales organizations) act as intermediaries between merchants and payment processors . The ISVs that look at the long. Besides that, a PayFac also. Embedding payments into your software platform is a powerful value driver. com explains everything you need to know. This means that there is no need for any charges between the issuer and the acquirer. There are pros and cons to the PayFac and ISO model depending on the size and specific requirements of your business. At the same time, Paragon Payment Solutions assumes the majority of risk and responsibilities related to operational expenses, chargebacks,. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. These companies have. What is a Payment Facilitator (Payfac)? Payfacs are an evolution of a long-established distribution model in the payments industry. 00 Payment processor/ merchant acquirer Receives: $98. For example, an. Learn more: PayFac vs ISO: which one to choose for your business? Benefits of becoming a PayFac. 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. 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. However, the setup process might be complex and time consuming. Difference #1: Merchant Accounts. 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. Second, because residuals are earned on. To learn more about the differences between these payment models, see our blog: PayFac vs ISO: Weighing Your Payment Options. 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. Generally speaking, a PayFac might be suitable for. ,), a PayFac must create an account with a sponsor bank. When accepting payments online, companies generate payments from their customer’s debit and credit cards. What is an ISO vs PayFac? Independent sales organizations (ISOs). Blog Exact Payments CEO, Phil Levy, Discusses the Future of Fintech With The Strawhecker Group. For example, an. BOULDER, Colo. 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. Read More. Unlike PayFac technologies, ISO agreements must include a third-party bank to sponsor the contract. If you want to take a full revenue model opposed to a commission based model anyway. However, the setup process might be complex and time consuming. Merchant accounts for credit card processing are used by businesses to accept credit cards and there are different models. Global expansion Adapt to changing landscapes Stripe’s payfac solution A comparison Get in touch Technology has fundamentally changed how businesses, acquiring banks, and. 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. The new PIN on Glass technology, on the other hand, is becoming more widely available. However, the setup process might be complex and time consuming. In the U. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Thus, it would arrange communication between both parties, the merchant and the acquiring bank. For example, an. These first few days or weeks sets the tone for how your partners will best. PayFac Solution Types. However, they do not assume. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payfac as a Service providers differ from traditional Payfacs in that. PayFac-as-a-Service helps you hit the ground running and quickly onboard customers while adhering to compliance standards. For example, an. Strategies. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. 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. 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. They build the integration and then lean on the processing partner to. 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. 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. 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. if ms form category == cat02 then save to My Docs. There is the opportunity for significantly more payments revenue by becoming a PayFac compared to becoming an ISO or referral partner. A PayFac provides credit card processing services to merchants on behalf of a bank or other. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. According to SMB estimates. 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. If necessary, it should also enhance its KYC logic a bit. ISO. Step 2: Transaction Originator collects debit card information and initiates transaction to Mastercard. Under the PayFac model, each client is assigned a sub-merchant ID. If you use direct charges, all Terminal API objects belong. Before outlining the similarities and commonalities of ISOs and ISVs, it’s helpful to recap their key differences: ISOs sell payment solutions to merchants, with wholesale ISOs offering additional services such as customer support. The payment facilitator model was created by the card networks (i. For example, an. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. A payment aggregator is a 3rd-party payment service provider (PSP) that allows merchants to process payments without having a merchant account. However, the setup process might be complex and time consuming. The former, conversely only uses its own merchant ID to process transactions. The PayFac aggregates transactions and sends them to its processor, keeping operations streamlined. Next-generation ISO (or next-gen ISO) is a. However, they differ from payment facilitators (PFs) in important ways. All ISOs are not the same, however. Even better? Funds are settled to the PayFac’s account and it’s determined by the PayFac to move those funds to the merchant. So, what. Payment Facilitator vs Payment Processor. The Traditional Merchant Onboarding Process vs. Partnering with a PayFac-as-a-Service provider leaves the technical work like coding, compliance monitoring, and payment integration to industry. MoneySend is the Mastercard transaction type (Transaction Code 28) designed. For example, an artisan. Each ID is directly registered under the master merchant account of the payment facilitator. A payfac is a type of payment aggregator, but it typically provides a more comprehensive suite of services. Payfac = a software product, platform, or marketplace that has in integrated payments into its product, and is responsible for the risk of transactions processed by its customers. 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. Typically, the ISO stays out of the contract between the two and instead focuses on the relationship with the payment processor. 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. Para ampliarlo, es una empresa que permite a sus clientes aceptar pagos electrónicos utilizando la plataforma del facilitador de pagos. Merchants need to understand these differences, so they can decide which of these options may be better suited for their business. g. 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. 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. Also, unlike an ISO, the PayFac provides the processing services, settlement of funds, and billing to the merchant. PINs may now be entered directly on the glass screen of a smartphone using this new technology. The merchant fills out extensive paperwork in order to open their own merchant processing account. Since it is a franchise setup, there is only one. ISOs play an important role in the payment process, but many people aren’t sure what they are. ISVs create software for companies in the payments industry. 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. 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. So, revenues of PayFac payment platforms remain high. Payment Processors and ISOs have a symbiotic relationship, with each party benefiting from the collaboration. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Shop. Payfac is a contracted Independent Sales Organisation (ISO), so they have the responsibility to manage their own sales agents and underwriters and adhere to the rules of the card associations. Thus, an ISO’s customers can access a wider range of processors, even if the onboarding experience is tedious. To help your referral partners be as successful as possible, you need a smooth onboarding process. Thus, in contrast to an ISO, a PayFac model can consolidate transaction processing volume and unify internal processes. PayFac vs ISO: Contractual Process. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. I SO. 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. Within the ARM industry, PayFac models can provide an especially significant benefit – these models can be used to enable full compliance for convenience fee solutions, in order to protect collection agencies from non-compliance risks including lawsuits,. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. When autocomplete results are available use up and down arrows to review and enter to select. However, the setup process might be complex and time consuming. So, MOR model may be either a long-term solution, or a. An ISO works as the Agent of the PSP. 3. . A payment facilitator is a merchant services business that initiates electronic payment processing. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. For example, an artisan. As PSPs must pay acquirers and banks and still have some profit margin, the fees can be higher than what can be directly negotiated with banks and acquirers. PayFac vs merchant of record vs master merchant vs sub-merchant. e. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. For example, an. 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. 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 PayFac: What’s the difference? An ISO is a third-party company that refers merchants to acquiring banks or payment service providers. For example, an. However, the setup process might be complex and time consuming. The PayFac model allows a single entity to become the “merchant of record” and board sub-merchants with fewer data requirements and scrutiny. Confusion often arises when distinguishing ISO vs. However, the setup process might be complex and time consuming. However, the setup process might be complex and time consuming. For example, an. This allows faster onboarding and greater control over your user. But regardless of verticals served, all players would do well to look at. However, the setup process might be complex and time consuming. Payfac’s immediate information and approval makes a difference to a merchant. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. Visa, Mastercard) around 2011 as a way for aggregators to provide more transparency into who their sub-merchants were. 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 differences of PayFac vs. The procedures used to develop this document and those intended for its further maintenance are described in the ISO/IEC Directives, Part 1. You may have also heard the name “Member Service Provider (MSP)”, which is the term Mastercard uses to call ISO. 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. Stripe and Square are two examples of well-known PayFacs that are incredibly popular with business owners in a wide variety of industries. Mastercard PayFac Models: The Ins and Outs of the “Big Two” Payment Facilitator Programs. Smaller. 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. Payfac and payfac-as-a-service are related but distinct concepts. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Beyond that lies the customer experience. For example, an. payment processor; What is a payment aggregator? A payment aggregator, also often referred to as a payment facilitator (payfac) or payment service provider (PSP), is a financial technology company that simplifies the process of accepting electronic payments for businesses. For example, an. For example, an artisan. 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. So naturally, any company considering the option needs to make sure the investment they’ll make in the Payfac model makes sense financially. In order to provide a plausible explanation, we need to understand the evolution of the merchant services industry. We wrote an earlier piece that discussed the history of PayFacs if you want to get caught up, so for the purposes of this […]5. A. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. They typically work with a variety of acquiring banks, using those relationships to "resell" merchant accounts to merchants. However, the setup process might be complex and time consuming. MSP = Member Service Provider. An ISO contract with banks to provide credit card processing services. However, the setup process might be complex and time consuming. Payfacs are registered independent sales organizations (ISOs) that have been sponsored by an. The facilitator company collects and manages the money. Moreover, in a sense, PayFac model relieved acquirers from merchant management functions, which they delegated to PayFacs. 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 artisan. 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. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Compare price, features, and reviews of the software side-by-side to make the best choice for your business. 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. However, much of their functionality and procedures are very different due to their structure. Unlike PayFac technologies, ISO agreements must include a third-party bank to sponsor the contract. The bank receives data and money from the card networks and passes them on to PayFac. As merchant’s processing amounts grow, it might face the legally imposed. 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. PayFac offers clients a choice if they wish to pay by cheque or bank transfer. For example, an. Sometimes a distinction is made between what are known as retail ISOs and. 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. GETTRX absorbs the stress of fraud monitoring and compliance reporting while you focus on your business. ISOs function primarily as sales agents or. Before offering customers payment methods from popular card networks (Visa, Mastercard, etc. ISO are important for your business’s payment processing needs. 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 some software providers starting out as an ISO or referral partner may elect a managed payfac solution as the next logical tech enablement progression, other providers may not want to relinquish visibility and control to a third. Understanding the differences between an ISO versus a PayFac will help you see why using a plug-and-play PayFac-as-a-Service solution is the most effective payment acceptance choice. However, the setup process might be complex and time consuming. This allows faster onboarding and greater control over your user. 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: How the Two Most Common Types of Payment Intermediaries Differ. PayFac vs Payment Processors. Step 1: Sender initiates P2P transaction to Transaction Originator. The PayFac model thrives on its integration capabilities, namely with larger systems. implementation of a payment facilitator model) calls for getting certified as one by the respective acquirer, and for. Payment facilitation requires the master merchant (usually the software provider) to take legal and financial responsibility for the transaction that occur under the primary merchant. For example, an. When it comes to choosing between a PayFac and an ISO, the best option depends on your business's specific needs and preferences. Payscape is also a registered ISO/MSP for Fifth. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. In fact, ISOs don’t even need to be a part of the merchant’s contract. However, the setup process might be complex and time consuming. Want to know the difference between ISO and payment facilitator? ️ Read this summary to find out why payment facilitator concept has been rapidly gaining popularity. In a new series, Rich Aberman, co-founder of WePay, and Karen Webster set the record straight on what a PayFac is and isn’t, how a company can become one (and what it costs), the value equation. In other words, processors handle the technical side of the merchant services, including movement of funds. PayFac Dynamic Payout Daily Operations Guide This document is intended for use by operations and financial professionals to assist with day-to-day monitoring and management of the Worldpay Dynamic Payout funding model. While an ISO, or independent sales organization, is similar to a Payfac, there are some key differences. Even better? Funds are settled to the PayFac’s account and it’s determined by the PayFac to move those funds to the merchant. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Popular 3rd-party merchant aggregators include: PayPal. For example, an. The payment facilitator works directly with the. Step 3: The Network (Mastercard) conducts due diligence on Transaction Originator, originates the transaction, routes to PIN Debit networks and provides transaction controls. Here are the six differences between ISOs and PayFacs that you must know. ISVs create software for companies in the payments industry. Recently, the concepts of PayFac and aggregators have started converging. A PayFac works by establishing one master merchant account, which can then be leveraged by multiple businesses for a small fee. 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. “Plus, you have a consumer base that is extremely savvy when it. The payment facilitator, or “PayFac”, model of merchant acquiring is growing extremely rapidly. For example, an. However, the setup process might be complex and time consuming. For businesses, the difference between using payfac-as-a-service compared to becoming a payfac comes down to time, cost, and. 70. Mastercard PayFac Models: The Ins and Outs of the “Big Two” Payment Facilitator Programs. PayFac registration may seem like the preferred option because of the higher earning potential. ISOs. Collect customer data to increase. Under the PayFac model, each client is assigned a sub-merchant ID. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. This includes underwriting, level 1 PCI compliance requirements,. The Payment Facilitator Registration Process. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. For example, an artisan. 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. Get notified when Stripe Reader S700 is available in your country. As a result of the first two. PSP and ISO are the two types of merchant accounts. Visa or MasterCard bank) member, but that has a relationship with an organization that is an Association member. Processor relationships. ISO. Jul 14, 2020 - Are you an ISO? Find out why you should become a PayFac and what options you have available for becoming a Payment Facilitator and providing merchant services. For example, an. A payfac has a much more flexible payment system and a wider variety of payment methods, so much so that it can be carried out through the linked bank account. In other words, ISOs function primarily as middlemen. The merchants can then register under this merchant account as the sub-merchants. This doesn’t happen with ISO, as it never handles money directly. The PayFac does not have to underwrite all merchants upfront — they are instead, underwriting the merchants essentially as they continue to process transactions for them on an ongoing basis. Without ISOs, a relatively small handful of global and regional payment processors would each be forced to interact with thousands. 1. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. PayFac vs ISO: Contractual Process. When you’re using PayFac as a service, there are two different solution types available. 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, the ISO stays out of the contract between the two and instead focuses on the relationship with the payment processor. PayFacs perform a wider range of tasks than ISOs. PayFacs are generally more suitable for smaller businesses or those looking for a streamlined, integrated payment platform with faster funding times. 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. A Payment Facilitator or Payfac is a service provider for merchants. Propelling High Performance Digital Commerce. A payfac is a type of payment aggregator, but it typically provides a more comprehensive suite of services. e. The industry term is Payment Facilitation (or Payfac), and Exact has everything you need to build and scale the entire process from instant onboarding to flexible payouts, fraud protection, comprehensive reporting and end-to-end data. (ii)during any period of two consecutive years, individuals who at the beginning of such period constitute the board of directors of the Company (the “Board”) and any new directors whose election by the Board or nomination for election by the Company’s stockholders was approved by at least two-thirds of the directors then still in office who either were. Our payment-specific solutions allow businesses of all sizes to. becoming a payfac. Payment Facilitators vs. A Payment Facilitator or Payfac is a service provider for merchants. Traditionally, a business that wanted to accept card payments would need to set up a merchant account with a bank, which can be a complex and time. However, the setup process might be complex and time consuming. An ISO, or independent sales organization, is a company that resells payment services to merchants on behalf of a payment processor or acquiring bank. In the current downturn, said Mielke, the PayFac or ISV that is diversified will be better positioned to weather the storm. 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 of the largest challenges a new PayFac will face is meeting the rigorous demands of its sponsorship bank,” says CJ Schneller, Vice President of Enterprise Risk at MerchantE. For businesses, the difference between using payfac-as-a-service compared to becoming a payfac comes down to time, cost, and risk—in short.