If you’re a motivated C-level leader that wants to earn revenue on your customers credit card processing, read on!How It Began…
In 2013 our technology partner, Usio realized the benefits first-hand of the PayFac model in regards to removing friction in the contracting, onboarding, flexible settlement and reporting processes.
They soon learned that payment facilitation is not for the faint of heart and required elaborate technology on the front and back end to consume mass quantities of data, manage and manipulate that data to make it usable and ultimately, to have the ability to share that data with software partners and their downstream sub-merchants in a way that is meaningful. Add to that the complexities of risk, compliance and merchant support—all of which are very different from traditional merchant acquiring models.
In 2015, the need to simplify and streamline the manner in which payments are accepted became more and more important to companies who were developing apps and software (referred to as ISV’s) within the niche verticals they served. Usio was approached by a large hospital system that had bill delivery and post-adjudication payment collection issues. That opportunity led them to create its Electronic Bill Presentment and Payment (EBPP) tool, that could be easily integrated via a suite of developer friendly API’s, that would sit inside of an I-frame in a way that completely removed the hospital from the scope of PCI and saved them hundreds of thousands of dollars annually. This product and all the features and functionality that live within it, eventually became the “front-end” transactional gateway to which all of Usio’s current software partners integrate via the robust API library that is now available through Usio PayFac -In-A-Box™.
As the market has evolved and our conversations with ISV’s now number in the thousands, Usio saw how the introduction of the PayFac model has led to significant confusion around whether these ISV’s should use Usio PayFac-In-A-Box™, or become a PayFac themselves.
On the surface, doing an integration to a set of API’s to payment-enable a software product seems like a fairly easy thing to do. However, this part of the process is barely dipping your toe in the water in terms of getting into the payments business and this is where many ISVs run aground.
Find a processor that will sponsor you as a PayFac with a member bank and the Card Associations
Pass an extensive underwriting process
In most cases, put up substantial cash reserves and personal guarantees with the bank or processor. Additionally, you must develop credit underwriting guidelines and AML policies.
Ensure that you have the internal capabilities and infrastructure required to manage settlement funds to your downstream sub-merchnats.
Hire staff that are experts in merchant acquiring to sell, implement, support and manage the day-to-day activities of the payments business.
Ensure that payments operations are in (and remain in) full compliance with PCI & other mandates, which can cost hundreds of thousands of dollars annually.
Becoming a PayFac requires building and investing in multiple systems.
PayFacs have ongoing legal requirements to maintain their good standing and credit requirements with acquiring banks and card networks.
The Electronic Transactions Association (a professional advisory group from payment processors, banks and card networks) strongly recommends engaging these industry experts and legal counsel to ensure compliance and adherence to laws and guidelines.
Our best-in-class tokenization and secure solutions are available for all types of sales channels. ACH, Credit Cards, and Debit Cards.
Accept ACH, credit/debit cards and eChecks with the most convenient terminal – your computer. Securely take orders by keying in cardholder information or use a variety of device options. For recurring transactions, quickly set up a bill plan for any customer.
Plug-and-play terminal secures every transaction with a powerful combination of point-to-point encryption and tokenization, allowing you to accept cards with magnetic stripes and EMV chips, as well as NFC payments, with peace of mind.
Committed to building a customized marketing plan with your brand to grow the partnership through various marketing channels.
Upon completion of the Integration, partners are assigned an account team to nurture the leads to enhance conversion rates.