Key Takeaways

• Payfac companies simplify payment processing for U.S. businesses of every shape and size, allowing them to accept credit card and other electronic payments with less hassle.
• They manage compliance, underwriting, and risk management, removing the regulatory burden from merchants and increasing their onboarding times.
• Specifically, U.S.-based Payfac solutions provide extensibility through integrations with widely used software and point-of-sale systems—enabling the accommodation of many types of business models and industries.
• Fees, customer support, and feature sets are all different, so businesses need to do their research and compare providers before settling on a Payfac partner.
• Being informed of upcoming changes at the federal and state level is key. This understanding becomes critical when you decide to partner with a Payfac company here in the United States.
• Choosing the best Payfac for your needs can have an enormous impact on your cash flow. It further minimizes chargebacks and delivers robust reporting and analytics, empowering smarter business decisions.

Payfac companies, short for payment facilitators, are leveling the playing field for SMBs. They allow these small businesses to take credit card payments without the burdensome process of establishing their own merchant accounts.

In the U.S., these companies take care of onboarding, risk checking, and settlements. The biggest payfac companies—Stripe, Square and PayPal—offer slightly different features and tools for U.S. Businesses of all sizes.

To select a payfac, compare cost, service, and speed of payout. The following section explains how these companies operate and what to watch out for.

Conclusion

In summary Payfac companies make it easier for grantees to spare their constituents the former agony of acquiring merchant accounts. From small merchants to e-commerce brands to even emerging pop-up retailers, everyone is able to receive payments quickly. No need to fiddle with personal banks or lengthy applications. Square, Stripe, and PayPal may be the household names, but there are many other smaller players in the U.S. That provide strong alternatives as well. Each one brings their unique combination of tools, fees, and support to the table. Pick the best option depending on your business type. Think about how you would like to be paid and how much assistance you are seeking! To get the most competitive deal and features, continue to watch for new features or more competitive offers from these companies to stay sharp. Looking to get a leg up on the competition? Explore some payfac alternatives that work for your brick and mortar or e-commerce store and determine which one best resonates with you.

Frequently Asked Questions

What is a PayFac company?

What is a PayFac company? It combines merchant onboarding, payment processing, and compliance under one easy-to-manage solution.

How do PayFac companies differ from traditional merchant accounts?

PayFac companies provide quick onboarding and easy configuration. That’s because traditional merchant accounts need a lot more documentation and have a much slower time to approval.

What are the benefits of using a PayFac company?

PayFac companies offer faster onboarding, simplified payment processes, and reduced compliance burdens. They provide far superior integration with today’s software-as-a-service platforms.

Are PayFac companies safe to use?

Are PayFac companies safe to use? Yes, established PayFac companies adhere to industry security practices, including PCI DSS standards. They enable businesses to better shield sensitive payment data and lower their fraud risk.

Can small businesses use PayFac services?

PayFac companies are especially suited for small businesses with their quick signup processes, straightforward pricing structures, and the ability to accept a wide range of payment types.

What fees do PayFac companies typically charge?

Most take a cut on transaction fees, but charge monthly fees and in some cases even setup fees. Given the wide variation in rates, it pays to shop around and compare offers.

Do PayFac companies support mobile payments?

Do PayFac companies accept mobile payments. This allows them to quickly enable their business customers to accept payments on the go, whether across the street or across the U.S.