Traditional payfacs have embedded payment systems and register their master MID with an acquiring bank. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. In other words, processors handle the technical side of the merchant services, including movement of funds. Selecting the suitable operating model and payment service provider (“PSP”) partner is at the core of a payfac strategy. payment facilitator (payfac) MoRs and payfacs both play significant roles in the e-commerce payment process, but their responsibilities and the scope of their services differ. With the PayFac model, the ISV can instead offer those same users the option to become sub-merchants, reducing friction and tapping into a new revenue. The MoR is liable for the financial, legal, and compliance aspects of transactions. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. Batches together transactions from sub-merchants before sending them to processors. Most people think of it as just software, but card brands officially define PayFac as the merchant of record. ago. An ISO or acquirer processes payments on behalf of its clients that are call merchants. In a comprehensive white paper on the subject we explained PayFac meaning and how to become a payment facilitator. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. Most payments providers that fill. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Payfacs, which are frequently chosen by startups and smaller companies, make the onboarding process easier for merchants and enable them to begin receiving payments swiftly and painlessly. Read on to learn more about how payment facilitator vs. With a Payfac, it is easy for the merchant to get niche treatment because the software determines the structure, eliminating the need for laborious documentation. This was around the same time that NMI, the global payment platform, acquired IRIS. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Payfac Terms to Know. Merchant of record vs. Here’s how: Merchant of record. As a sub-merchant of a payfac, you can still offer payment processing services and allow your clients to take electronic payments, online payments, mobile payments and process transactions. platforms vs. When a company decides to operate as a payment facilitator, it obtains a payment facilitator account from an acquirer and aggregates payment transactions for its merchant portfolio through that account. By allowing submerchants to begin accepting electronic. Because merchant accounts are required to process debit and credit card transactions, it’s. PayFacs are models where the service provider (e. A good Merchant of Record solution has a robust infrastructure designed to streamline global payment processing and everything it entails, from payment gateways to merchant banks. Here’s how: Merchant of record. , invoicing. Solutions. As merchant numbers and workflow complexity grows, using white-labeled PayFac-as-a-Service can set your ISO apart. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. They typically work with a variety of acquiring banks, using those relationships to "resell" merchant accounts to merchants. g. PayFac vs ISO: 5 significant reasons why PayFac model prevails. 83% of card fraud despite only contributing 22. Here’s how: Merchant of record See full list on pymnts. Here’s how: Merchant of record. A merchant of record is an entity that is legally authorised and responsible for processing customer payments – here's what businesses should know about it. Instead of each individual business needing to set up its own merchant account , a process that can be time-consuming, the payfac effectively “rents out” merchant account functionality under its larger master merchant. For example, many of PayPal. Estimated costs depend on average sale amount and type of card usage. When a company decides to operate as a payment facilitator, it obtains a payment facilitator account from an acquirer and aggregates payment transactions for its merchant portfolio through that account. Platforms using a traditional payfac solution open a merchant bank account and receive a merchant ID (MID) to acquire and aggregate payments for a group of smaller merchants, typically called sub-merchants. Most payments providers that fill. payment facilitator (payfac) MoRs and payfacs both play significant roles in the e-commerce payment process, but their responsibilities and the scope of their services differ. Traditionally, businesses that wanted to accept credit card payments had to complete a lengthy, complex process of setting up a merchant account with a bank or a payment processor. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. Key Features of Visa’s CBPS Program: Merchant on record: The CBPS provider serves as the merchant on record, processing consumer card payments on your behalf. For MOR, shoppers must. 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. Take Uber as an example. The business has gone through the traditional setup of a merchant account in its name and is registered as a Merchant. Merchant of Record. PayFac-as-a-service delivers a competitive payment program with instant onboarding of merchants while creating a seamless customer experience. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. To our knowledge, the term MOR is not a formal designation, although it does provide a useful shorthand for platforms, marketplaces, and others whose business model involves meeting the criteria to be a merchant. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. traditional merchant service accounts. 0 companies are able to capture more of the payment economics and offer merchants a better experience. Insiders. Merchant of record vs. Traditional payment facilitator (payfac) model of embedded payments. Payfac 45. The PayFac model has gained popularity in recent years, as it allows businesses to simplify their payment processing and reduce costs, while also providing a better customer experience. The PayFac is the merchant of record for transactions. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. Merchant of record vs. Becoming a payment processor and being a sub-merchant is a much less costly and time-consuming option for SaaS payment solutions . As your clients conduct credit and debit card payments, the funds from each payment are saved in your merchant account. Understanding Payfac vs Merchant of Record. DENVER, October 10, 2023 — Infinicept, a leading provider of embedded payments, and Payment Visor, a payment management consulting firm, today announced a partnership that brings together critical payments expertise with Infinicept’s Payfac -as-Service and embedded payments platform. The PF may choose to perform funding from a bank account that it owns and / or controls. The Shifting Provision of Merchant Services . Payment Facilitator Model Definition. Most people think of it as just software, but card brands officially define PayFac as the merchant of record. Article September, 2023. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. When it comes to choosing between a PayFac and an ISO, the best option depends on your business's specific needs and preferences. It enters a contractual agreement with its customer, the PayFac, which is the master merchant. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. It’s important to look for a payfac that has a strong track record of security and compliance and has implemented measures such as. In the PayFac model, the payment service provider (PSP) acts as a master merchant and allows sub-merchants to process transactions through their own merchant accounts. PayFacs and payment aggregators work much the same way. On merchant-owned e-commerce websites, they'll need a checkout interface with a payment gateway that can accept credit and debit card details. A Payment Facilitator or PayFac simplifies merchant account enrollment which allows smaller companies to quickly gain the upper hand. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. For this reason, payment facilitators’ merchant customers are known as submerchants. The Add Sub-Merchant screen appears, as shown in the following figure. This allows faster onboarding and greater control over your user. While we’ll discuss costs below, PayFacs can onboard merchants much more quickly than a traditional ISO model. A merchant of record (MoR) is the entity that is authorized, and held liable, by a financial institution to process a consumer’s credit and debit card transactions. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. With Punchey, you are the merchant of record. Merchant of record or MOR is an essential link between a company that needs to accept electronic payments and consumers of its products. with Merchant $98. A PayFac is a processing service provider for ecommerce merchants. Payment Facilitator. PayFac vs. Do the math. The key participants in this model are the acquirer, payment facilitator, and sponsored merchant. A PayFac is the official merchant of record with the major card brands such as Visa and Mastercard and holds the relationship with the acquiring bank. The transaction descriptor specifies the name of the MOR. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. And this is, probably, the main difference between an ISV and a PayFac. g. If you are a marketplace or are considering becoming one, you have some important decisions to make. MOR is responsible for many things related to sales process, such as merchant funding, withholding. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. What comes to mind is a picture of some large software company, incorporating payment. It offers the. An ACH return happens when a bank returns an electronic funds transfer (EFT) to the originating institution. So, the main difference between both of these is how the merchant accounts are structured and organized. It would register the merchant on a sub-merchant account and it would have a contract with the acquiring bank. A merchant of record is an entity that accepts cardholders’ payments and assumes liability for processing of these payments on the merchant’s behalf. Traditional payfacs have embedded payment systems and register their master MID with an acquiring bank. A Payment Facilitator (PayFac) is a type of merchant services company that provides business owners with a way to accept electronic payments, both online and. A payment facilitator, also known as a payfac, is a provider that extends all the functionality of a merchant account to merchants without requiring them to go through the process of acquiring their own individual merchant account. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. It is quintessential to crunch those numbers and figure out if the ROI is worth entertaining the thought. Here’s how: Merchant of record. Merchant of record vs. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. The PayFac directly manages the payment of funds to sub-merchants. Payment Facilitators (Payfacs) and Merchants of Record (MoRs) are two different ways to process payments. 20 (Purchase price less interchange) $98. Platforms using a traditional payfac solution open a merchant bank account and receive a merchant ID (MID) to acquire and aggregate payments for a group of smaller merchants, typically called sub-merchants. In simple terms, the MOR is. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Sub-merchants, on the other hand. As the name suggests, this is the entity that processes the transactions. A Payment Facilitator or PayFac simplifies merchant account enrollment which allows smaller companies to quickly gain the upper hand. A Payment Facilitator, or PayFac, is a sub-merchant account used by merchant service providers to provide payment processing services to their own clients, known as sub-merchants. A Payfac provides PSP merchant accounts. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. The merchant of record (MOR) is responsible for receiving and processing payments on behalf of the merchant, assuming liability for the transaction. Our digital solution allows merchants to process payments securely. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. On merchant-owned e-commerce websites, they'll need a checkout interface with a payment gateway that can accept credit and debit card details. Here’s how: Merchant of record A merchant account is a type of business bank account that is used to process electronic and payment card transactions. Merchant of record vs. PayFac-as-a-Service; Pricing. A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. who do not have a traditional acquiring relationship. If your sell rate is 2. Rather then setting up each of their clients with their own merchant account, the Payfac lets them piggyback on the Payfac’s account. who do not have a traditional acquiring relationship. If you don't have a very large volume of transactions but still are planning not to use a PayFac, this or an ISO is probably the type of service you. Seller of record vs merchant of record. Paypal is an example of a payfac, and while Paypal is highly convenient and can be great for specific business models, they do not work with certain industries that can be deemed high-risk. A merchant of record is an entity that is legally authorised and responsible for processing customer payments – here's what businesses should know about it. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. The enabler is essentially an acquirer in the traditional term. As the merchant of record, a PayFac can aggregate and process the card payments for as many “sub-merchants” as they would like underneath their umbrella. The road to becoming a payments facilitator, according to WePay founder Rich Aberman, is long, expensive and technologically complex. FIS’ rival, Fiserv, acquired the remaining stake of Finxact for $650 million, while another company, Fintech Amount, bought Linear for $175 million. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. A PayFac (payment facilitator) has a single account with. marketplace businesses differ, and which might be right for you. Sub-merchants, on the other hand. Step 2: The payment aggregator securely receives the payment information from the merchant's website or app and forwards it to the acquiring bank for processing. A merchant of record is an entity that is legally authorised and responsible for processing customer payments – here's what businesses should know about it. accounting for 35. To accept payments online, you will need a merchant account from a Payfac. Here’s how: Merchant of record. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Because of those privileges, they're required to meet industry. A PayFac assumes all the risk involved in payment processing – including fraud loss, chargebacks, and non-payment. Platforms using a traditional payfac solution open a merchant bank account and receive a merchant ID (MID) to acquire and aggregate payments for a group of smaller merchants, typically called sub-merchants. While there are many benefits to this model, payment facilitators and their sponsoring banks and processors should be aware of the. The payment facilitator has already undergone major. The MoR is liable for the financial, legal, and compliance aspects of transactions. So, what. What Does Merchant of Record Mean? Merchant Services By Roberto Sato. The main difference between these two technologies, the Payment Facilitator and the Payment Processor, is the difference in the organization of merchant accounts. A merchant of record is an entity that is legally authorised and responsible for processing customer payments – here's what businesses should know about it. A merchant of record is an entity that is legally authorised and responsible for processing customer payments – here's what businesses should know about it. Sometimes, a payment service provider may operate as an acquirer in certain regions. Consolidates transactions. 1 billion for 2021. The term “merchant of record” refers to the entity that is legally authorized and responsible for processing customer payments —including credit and debit card transactions and digital wallet transactions —for goods or services on behalf of a business. The critical distinction between a merchant account and a business bank account is that the former allows you to manage credit card transactions while the latter enables you to manage all of your funds. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. PayFac vs ISO. Merchant of record vs. A PayFac is a merchant services model in which an organization opens a processing account with an acquiring bank so that it can serve a myriad of merchant clients. Set up merchant management systems such as dashboards,The payment facilitator must first open a merchant account with the acquirer. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. In this article, we explore various forms of payment facilitation, the commercial opportunity for payfacs, the maturation process of select payfac models, and the key features and functionalities to look for in PSPs. Payfacs often offer an all-in-one. Here’s how: Merchant of record. 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. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Using this account, the company can aggregate payments for its portfolio of merchants. By using a payfac, they can quickly. Payment facilitators (PayFacs) or payment service providers (PSPs) serve as the merchant of record with acquirers and processors, operating a single merchant account. A SaaS company that wants to offer its users the ability to accept card payments, needs to first obtain a payment facilitator (PayFac) account from an acquirer. Acts as a merchant of record. Here are the six differences between ISOs and PayFacs that you must know. However, they do not assume. A merchant of record is an entity that is legally authorised and responsible for processing customer payments – here's what businesses should know about it. Facilitates payments for sub-merchants. Since the PayFac already has a relationship with the payment processor and the SaaS company, approval takes as little as a few hours. A payment facilitator (payfac) is a company that simplifies the process of accepting electronic payments for other businesses. The PayFac provides payment acceptance capabilities to downstream sub-merchants. Contracts. A payment facilitator (PayFac) is a company that simplifies the process of accepting payments for businesses, particularly small and medium-sized enterprises (SMEs). First popularized by firms like PayPal and Square, the payments facilitator (payfac) model is reshaping the payments ecosystem, allowing nonpayments companies that adopt it to. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Here’s how: Merchant of record The term “Merchant of Record,” however, does not appear in the most recently published Visa or MasterCard Rules. Instead of each individual business needing to set up its own merchant account , a process that can be time-consuming, the payfac effectively “rents out” merchant account functionality under its larger master merchant. The. For some ISOs and ISVs, a PayFac is the best path forward, but. Merchant of record vs. The term “merchant of record” refers to the entity that is legally authorized and responsible for processing customer payments —including credit and debit card transactions and digital wallet transactions —for goods or services on behalf of a business. 0 is to become a payment facilitator (payfac). The marketplace also manages the. The Payment Facilitator Registration Process. While the term is commonly used interchangeably with payfac, they are different businesses. Payment Facilitators (Payfacs) and Merchants of Record (MoRs) are two different ways to process payments. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. With a. A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. Establish connectivity to the acquirer’s systems Two-way information flow: • Th Payfac pushes messages the acquirer (transaction info). Firstly, in the Payment Facilitator model, all the merchants are sub-merchants under a master merchant account, which allows them to quicker onboarding and more control. FinTech 2. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. The term “merchant of record” refers to the entity that is legally authorized and responsible for processing customer payments —including credit and debit card transactions and digital wallet transactions —for goods or services on behalf of a business. Sometimes it may seem that emergence of PayFac model led to decrease of merchant acquirer revenues. The value of all merchandise sold on a marketplace or platform. Merchants undergo a series of evaluations before they are onboarded as sub. Just like some businesses choose to use a. In contrast, PayFacs have one or two processor relationships and onboard ISVs as referral agents. That means you assume the risk associated with the transactions processed on your platform. Based on that definition, PayFacs take over the. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. This story and the numbers are a little dated now, but from 2013 to 2016, Shopify’s merchant base nearly doubled to 200,000 from about 120,000, yet revenues increased almost 10X – all while. becoming a payfac;. Here's how: Merchant of record. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Businesses that choose to work with a payfac are essentially submerchants under this master account. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. They are at higher risk than other stakeholders in the payments ecosystem because they take on merchant risk — losing customers as those. Our belief is that the logic behind these double standards is that a merchant-of-record carries the liability and compliance responsibility in an ecosystem that is all the same. The PayFac owns the direct relationship with the payment processor and acquiring bank. Merchant of record vs. March 29, 2021. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. A PayFac, or payment facilitator, is a merchant services model that streamlines the merchant account enrollment process by onboarding a merchant as a sub-account under the PayFac’s master account. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. By being delivered digitally vs. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. a merchant to a bank, a PayFac owns the full client experience. A payment facilitator (payfac) is a service provider for businesses that simplifies the merchant-account enrollment process. A major difference between PayFacs and ISOs is how funding is handled. A merchant of record is an entity that accepts cardholders’ payments and assumes liability for processing of these payments on the merchant’s behalf. For example, an artisan who sells handmade jewelry online may find the process of setting up their own merchant account daunting or unnecessary, given their lower transaction volume. Merchant of record vs. Join 99,000+. PayFacs operate as a master merchant that facilitates credit and debit card transactions for sub-merchants (the PayFac customers) within their payments ecosystem. The platform becomes, in essence, a payment facilitator (payfac). Not all that long ago, that same software company would have gone all the way to becoming a merchant of record or a PayFac in the drive to offer payments and push margins. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. It needs to obtain a merchant account, and it must be sponsored into the card networks by a bank. payment facilitator (payfac) MoRs and payfacs both play significant roles in the e-commerce payment process, but their responsibilities and the scope of their services differ. In summary, direct merchant accounts provide more control and customization but require businesses to manage all aspects of payment processing,. Payfacs work by having a master merchant account (and a master MID) through its relationship with acquiring banks. Merchant of record vs. leveraging third party vendors. We promised a payfac podcast so you’re getting a payfac podcast. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. Fast forward to today, Lightspeed has become a payment facilitator (“payfac”) under its ‘Lightspeed Payments’ offering. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. By allowing submerchants to begin accepting electronic. Instead, the payfac has a master merchant account that it uses to process payments for all the “sub-merchants. Global, which also supports financial institutions in card issuing, saw that part of its business record $505 million in adjusted net revenue for the quarter. Understandably, the PayFac model has grown rapidly in popularity with software vendors in a wide variety of categories. net; Merchant of Record A merchant of record is an entity that is legally authorised and responsible for processing customer payments – here's what businesses should know about it. Here’s how: Merchant of record. The payment facilitator model continues to grow in popularity in the merchant acquiring space as a way to board merchants quickly and with minimal friction. 8–2% is typically reasonable. If a marketplace or any other company (ISO, SaaS provider, ISV, franchisor, venture capital firm) decides that it is the right time for it to become a white-label or full-fledged PayFac, it can do so. Processor relationships. A payment facilitator, also known as a payfac, is a provider that extends all the functionality of a merchant account to merchants without requiring them to go through the process of acquiring their own individual merchant account. Payment Facilitators. Merchant of Record. The reports, records, and dashboard help the. transactions, tax compliance and adherence to. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. PayFacs, said Mielke, may face considerable fallout. Sub-merchants operating under a PayFac do not have their own MIDs, and all transactions are processed through the. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. However, if the business experiences rapid growth and needs to onboard a large number of merchants, the payfac may face scalability challenges. A PayFac is an intermediary entity, performing a set of functions (delegated by the acquiring bank) for multiple merchants. Visa, Mastercard) around 2011 as a way for aggregators to provide more transparency into who their sub-merchants were. An MoR acts as a payment processing service that is essentially a reseller of the merchant’s goods or services, and a payfac assumes responsibility for establishing and managing the relationships that the merchant needs to start taking payments. Understanding Payfac vs Merchant of Record. Payfac-as-a-service vs. A master merchant account is issued to the payfac by the acquirer. The acquirer receives funds from the issuer and pays them into the master merchant account of the PayFac. A merchant of record is an entity that is legally authorised and responsible for processing customer payments – here's what businesses should know about it. Here’s how: Merchant of record Merchant of record vs. PayFacs can also use white-label payment orchestration software and offer it to their clients to create a. Essentially, a payfac is a company that allows its customers to accept electronic payments using their platform. The reality is that merchants, even processing with a Payfac may not have the same application and payments footprint. 5. The PayFac uses their connections to connect their submerchants to payment processors. This also means the Payfac assumes the merchant’s credit liability, but they diversify this risk by aggregating a large pool of merchants under them. There’s a distinct difference between PayFac and MOR in the space. ” In other words, instead of setting up merchants to process payments with their own unique accounts, a PayFac is like an aggregator, where the Main. Understandably, the PayFac model has grown rapidly in popularity with software vendors in a wide variety of. Payments news: Rich Aberman, co-founder of WePay, teaches Karen Webster what a PayFac is, why it differs from a merchant of record and how to become one. Becoming a Payment Facilitator or PayFac is often a great fit for SaaS platforms that in addition to a business management app also offers a payment processing solution as well as payment specific solutions, e. Here’s how: Merchant of record. Traditional payfacs have embedded payment systems and register their master MID with an acquiring bank. The term “merchant of record” refers to the entity that is legally authorized and responsible for processing customer payments —including credit and debit card transactions and digital wallet transactions —for goods or services on behalf of a business. Merchant of record vs. Difference #1: Merchant Accounts. PayFacs are generally more suitable for smaller businesses or those looking for a streamlined, integrated payment platform with faster funding times. Acts as a merchant of record. Here’s how: Merchant of record In contrast, with a PayFac, the customer will almost certainly interact directly with the individual sub-merchant, and in some cases may not even know that a PayFac is involved in the transaction. Payscout) acts as the Main Merchant (also known as the Merchant of Record) and can board numerous merchants under this “master account. That was up 5% year-over-year on a constant-currency basis. Next, Aberman and Webster will discuss the difference between a PayFac and a Merchant of Record. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. The transaction descriptor specifies the name of the MOR. The PayFac owns the direct relationship with the payment processor and acquiring bank. To manage payments for its submerchants, a Payfac needs all of these functions. Merchant of record vs. Moreover, in a sense, PayFac model relieved acquirers from merchant management functions, which they delegated to PayFacs. Here’s how: Merchant of record. Today’s PayFac model is much more understood, and so are its benefits. Instead of each individual business needing to set up its own merchant account, a process that can be time-consuming, the payfac effectively “rents out” merchant account functionality under its larger master merchant. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. responsible for moving the client’s money. Part of the reason for that is the sheer volume of terms used to describe some of the approaches to the space, like PayFac ®, payment facilitator, merchant of record (MOR), embedded. Businesses can choose to be their own MoR,. The Visa Consumer Bill Payment Service (CBPS) is an optional service that provides bill payment services to consumers using debit or credit cards. Platforms using a traditional payfac solution open a merchant bank account and receive a merchant ID (MID) to acquire and aggregate payments for a group of smaller merchants, typically called sub-merchants. Settlement must be directly from the sponsor to the merchant. Merchant of record vs. The key aspects, delegated (fully or partially) to. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. MOR has to take ALL liability. payment facilitator (payfac) MoRs and payfacs both play significant roles in the e-commerce payment process, but their responsibilities and the scope of their services differ. Merchant accounts are provided by acquiring banks, often through payment processors or independent sales organizations (ISOs). Some ISOs also take an active role in facilitating payments. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. Here’s how: Merchant of record A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. This model is ideal for software providers looking to. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. ISOs and PFs may occupy similar space, but their fundamental differences set them apart from each other. The MoR is liable for the financial, legal, and compliance aspects of transactions. Amid the great digital shift, he said, sponsor banks — while seeking to broaden their merchant acquiring presence — are getting pushback from ISOs and ISVs to upgrade the front-end experience. A 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. The most significant difference when it comes to merchant funding is visibility into settlements. Also Read: How to Choose Between a Payment Facilitator (PayFac) and a Merchant of Record (MoR) for Your Business What is the Seller of Record (SoR)? The. It also needs a connection to a platform to process its submerchants’ transactions. The main difference between a payment aggregator and a PayFac is the type of merchant ID (MID) used to differentiate accounts. 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. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. PayFacs perform a wider range of tasks than ISOs.