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What is a PayFac?

What is a PayFac?

What is a PayFac?

A Payfac, or payment facilitator, is essentially a third-party payment system that allows businesses and organizations to receive and process online and in-store payments. Similar to PayPal or Square, merchants don’t get their own unique accounts. Rather, they get a general merchant account that doesn’t have a unique ID linked to that particular merchant. 

Below we’ll look at some of the pros and cons of Payfacs and whether or not it makes sense for you to utilize a Payfac as a payment option. 

Pros and Cons of a Payfac

So what are the pros and cons of using a Payfac, and how do you know if it makes sense for your organization to use one0?

Benefits of a Payfac:

  • Payfacs are accessible and easily integratable into most businesses.
  • Payfacs are easy to set up. Because they don’t offer unique merchant IDs, they aren’t as customizable and can have a simple one-size-fits-all structure.
  • Because you, as the merchant, are working under a submerchant, you don’t have to do a lot of maintenance or management to keep your Payfac up and running, and if you have issues with the platform, your submerchant will likely take care of those issues so you don’t have to. 
  • Again, because the submerchant takes on most of the responsibility of your payment processes, most Payfacs offer fraud protection straight out of the box. 

Downsides of using a Payfac

  • Because Payfacts offer a convenient one-size fits all solution, they can be more expensive than if you were to set up your payment system on your own. 
  • Many Payfacs are limited in what they can do. If you’re a nonprofit or cultural institution, you will likely want membership management capabilities, donor management features, advanced ticketing, and more. Payfacs, while easy to use, won’t offer much in the way of membership analytics, donor membership management, or other customizable features. 
  • Payfacs will often come with higher transaction fees for your customers and visitors, which can add up in the long run. 
  • Payfacs offer a lot of automotive features that will make for an easy solution, but they don’t typically offer the kind of personalization that you can get with a custom payment option. 

ISOs vs Payfacs

While an ISO, or independent sales organization, is similar to a Payfac, there are some key differences. ISOs, unlike Payfacs, rely on a sponsor bank to finalize their contract with a merchant. The ISO must facilitate the contract between the sponsor and merchant. Depending on the contract, the agreement may be with the sponsor bank and merchant alone or with the ISO as the bridge between the sponsor bank and merchant. 

How the contracts are written will determine who is responsible, either the ISO or the sponsor, if fraud or other issues occur with the merchant. Payfacs, on the other hand, are the direct contractor to the merchant, and they alone are responsible for any technical or security issues. 

How ACME can provide all your payment needs

The problem with Payfacs is how much it costs to build a Payfac and how limiting their features and integrations are for cultural institutions and nonprofits. With ACME Ticketing, you can own your payment process and benefit in the following ways: 

  • Driving recurring revenue to increase your bottom line.
  • Eliminate middlemen that sit on top of your processor.
  • Maximize your transaction margins through ACME’s intelligent optimization.
  • Avoid upfront and ongoing costs associated with building a Payfac. 
  • Unify your omnichannel payment systems and integrate ACME into all of your POS and SDKs. 

With ACME, you get the convenience of a Payfac without all the added costs and lack of customization. Drive memberships, grow tickets, manage members, and reach all of your institutional goals with ACME today



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