How to become a PayFac
Can becoming a PayFac help grow your business?
What is a PayFac exactly?
A Payment Facilitator (PayFac) is a merchant service provider that simplifies the merchant account onboarding process. PayFacs operate on a merchant payment platform (like Magnius is offering) where merchants no longer need their own MID (direct account with an acquirer), but are boarded directly under the PayFac’s master MID account.
What you need to become a PayFac
- Capital: Investigation time and effort coupled with due diligence costs can easily exceed a lot of money. Before you get started, make sure you have the necessary capital to become a payment facilitator.
- Resources: You will need to devote team members to ongoing risk mitigation and compliance issues in order to consistently offer the best service to your customers.
- An understanding of payments: Without a solid grasp of what can go wrong, what your obligations are, as well as what components create your costs (and what can be done about them) you will be exposed to financial and reputational risk.
- Critical mass: To absorb the initial and ongoing expense of becoming a PayFac, you clearly need to drive enough revenue to offset those costs. Without enough clients you likely will not generate the revenue needed to sustain costs involved.
- The appropriate client base: As a PayFac you need to find your appropriate client base. Who is your target group? Are you focusing on convenience by easing the on-boarding procedure then paying higher payment processing fees are worthwhile for small businesses.
How can Magnius help?
Yes, there is the underwriting, the application processing, the risk underwriting, but then PayFacs also have to have a payment gateway. That’s probably one of the things people most often overlook in terms of becoming a PayFac.
You can go through a registration process, but then you need technology. You have to have something to offer these people to make their life easier and allow your merchants to process transactions. You can get the merchant approved but then you have to do the merchant provisioning.
You have to be able to support commerce in any environment, any payment method, whether it’s mobile, whether it’s online, whether it’s card present, [or] retail face-to-face. With Magnius, you are agnostic to each environment.
Because Magnius has deep experience and history as a payment gateway, we plan to leverage our experience to connect PayFacs with the processor they register with – and that’s huge. And we provide you with exposure to or the ability to process any card types or APM. We provide that capability to you in a singular white labeled, dedicated hosted platform.
Get in touch with us
Are you interested in becoming a PayFac with us?
We’ve worked with a lot of different payment facilitators. Fill out the contact form to get started becoming a payfac today. ps, doesn’t matter how big or small you are as a company. I guarantee we can help get you the best rates out there.