Is Payment Facilitation a good option for your SAAS or Platform?
A Payment Facilitator or PayFac acts as a Master Merchant. The Payment Facilitator’s role is to quickly and easily onboard sub merchants to facilitate credit, debit card and in some case ACH transactions for participants in their SAAS product
Payment Facilitation is an attractive option for SAAS providers for 2 primary reasons.
1-Easy onboarding for the app users. Complete a simple application and a new MID [Merchant ID that creates the merchant account] is created and that client can begin processing payments
2-Creates a new revenue stream. The SAAS platform will either have a buy rate or revenue share percentage negotiated with their Payment Facilitation platform partner. In either case every payment transaction generates revenue the platform receives. In many cases this revenue can become substantial. This creates a more profitable and valuable business.
Payment Facilitation is an especially good fit if your SAAS solution offers payment acceptance and in particular recurring payments.
There are many considerations and it makes sense to speak with someone who can listen to what your goals are, answer questions and potentially craft a solution that best serves your end customer and your platform. And we specialize in helping platforms navigate the payments landscape.
Some resources:
An overview of Payment Facilitation Solutions that outlines costs, risks and rewards
Payment Processing Partnership – Looks at options including Payment Facilitation as well as a partnership model where revenue generation is still a big part of the equation but offer options where the SAAS platform can simply focus on their SAAS offering and leverage payments as rev driver.
