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  • PayTech Trust

What is a Payment Facilitator?

The past year has demonstrated that innovation is more important than ever, as consumers and merchants alike moved to create new opportunities for real-time online payments. During the pandemic, the role of payment facilitators became even more important as many small businesses began accepting credit card payments for the first time.

What is a Payment Facilitator?

A payment facilitator is a merchant service provider that provides the infrastructure so that sub-merchants, usually storefronts or online businesses, can accept credit card payments. Some popular examples of payment facilitators are Stripe and Square. Payment facilitators underwrite their sub-merchants and provide them with the necessary technology to process electronic payments. The payment facilitator partners with an acquiring bank that underwrites the payment facilitator and assumes the financial risk. Payment facilitators also enter into partnerships with payment processors, in order to be able to process transactions initiated by the payment facilitator’s sub-merchants. In short, they provide all the necessary infrastructure for credit card processing and underwrite their sub-merchants, assuming the risk. They generate revenue on each transaction their sub-merchants make.

Woman holding credit card and using a tablet

What are the benefits of working with a Payment Facilitator?

A payment facilitator gives sub-merchants the opportunity to process credit card payments without having to handle all the infrastructure and compliance issues themselves, and without needing to form a relationship with a sponsoring bank and payment processor. Working with a payment facilitator means sub-merchants don’t have to get their own Merchant Identification Number (MID) and are onboarded under the master MID of the payment facilitator. A payment facilitator also streamlines the signup process compared to working directly with a bank and payment processor and is often a cheaper and more flexible solution for small businesses.

How to find a Payment Facilitator for your Small Business

You’ve decided that a payment facilitator is the right solution for your business. But how do you find the right one? Look for one who facilitates as well as processes the payments and meets the PCI compliance requirements, to ensure your data is secure. Find one who takes the time to understand your business and offers in-depth onboarding and ongoing support. You want to partner with a payment facilitator who understands the industry and how it can best support the needs of your business.

PayTech Trust works with you to create innovative solutions to meet your unique payment processing needs. Contact us for more information on how we can help you.


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