For example, an. A. Payment Processors are responsible for authorization, authentication, data security, settlement, clearing, and reporting services, while ISOs focus on sales, marketing, merchant support, customer. Whatever information you need, we can help. For example, an. You own the payment experience and are responsible for building out your sub-merchant’s experience. Payfac and payfac-as-a-service are related but distinct concepts. The ISVs that look at the long. 4. PayFac vs ISO: Key Differences. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. For example, an. While we’ll discuss costs below, PayFacs can onboard merchants much more quickly than a traditional ISO model. Risk management. Payment processors do exactly what the name says. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. The merchants can then register under this merchant account as the sub-merchants. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. They typically work with a variety of acquiring banks, using those relationships to "resell" merchant accounts to merchants. There are two types of merchant account providers: independent sales organizations (ISO) and payment facilitators (PayFac), also known as payment service providers (PSP). Even though PayFacs and ISOs may seem to be quite similar on the surface, there are a few key differences between them. The ISO is an intermediary signing up the merchants for the acquirer’s payment processing services. To help us insure we adhere to various privacy regulations, please select your country/region of residence. 00 Payment processor/ merchant acquirer Receives: $98. This solution includes hosted payment pages; one-time, subscription, and one-click billing solutions; risk management; affiliate tools, and end-user customer support. Becoming a payment facilitator is a change to your operational and support models, has and it pays long-term benefits. Very rarely, said Mielke, do ISVs win with the “knee-jerk reaction of becoming a PayFac and capturing those additional revenues. Our belief remains that all payfacs will inevitably write directly to the networks and avoid the processors for so many reasons. One is an ISO or independent sales organization, and another is a PayFac or payment facilitator. Fast, efficient boarding solutions that orchestrate third-party and internal systems to help you turn prospects to customers – face-to-face, on the phone, or online. facilitator is that the latter gives every merchant its own merchant ID within its system. PayFac registration may seem like the preferred option because of the higher earning potential. Whatever information you need, we can help. The types of new entities an ordinary ISO can turn into include a PayFac, a wholesale ISO, a next-generation ISO, or a merchant services consultant. Acquirer = a payments company that. Under the PayFac model, a merchant is set up under the PayFac’s master account, but they are onboarded with their own unique MID. However, much of their functionality and procedures are very different due to their structure. When PayFac became a buzzword among software platforms and the many businesses trying to sell to them, the meaning of the word started to blur. Payfac solutions can be a critical source of revenue generation, allowing ISVs to differentiate their product and service offerings in a crowded space. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. Merchants get underwritten more efficiently, while acquirers are relieved of some merchant services, delegated to PayFacs for a reward. In contrast, a PayFac is responsible for the submerchants. Identifying these incidents via the Infinicept system quickly is an easy first step to take in halting such. The new PIN on Glass technology, on the other hand, is becoming more widely available. Read article. The Visa Global Registry of Service Providers is the payment industry's designated source for information on registered and compliant agents that provide payment-related services to Visa clients and merchants. May 24, 2023. Contracts. Indeed, PayFac model is a beneficial solution for merchants, acquirers, and, of course, payment facilitators themselves. By viewing our content, you are accepting the use of cookies. Merchants need to. One of the most significant differences between Payfacs and ISOs is the flow of funds. Technology has fundamentally changed how businesses, acquiring banks, and card networks work together. Here, ISOs (Independent Sales Organizations if on the Visa network), or MSPs. Payment Facilitators vs. Partnering with a PayFac-as-a-Service provider leaves the technical work like coding, compliance monitoring, and payment integration to industry. A payment processor is a company that works with a merchant to facilitate. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. And this is, probably, the main difference between an ISV and a PayFac. Menda chats with Deana Rich about two main topics. A Payment Aggregator or Facilitator [Payfac] can be thought of as being a Master Merchant-facilitating credit, debit card and ACH transactions for sub-clients within their payment ecosystem. By viewing our content, you are accepting the use of cookies. A PayFac, or payment facilitator, is a merchant services model that streamlines the merchant account enrollment process by onboarding a merchant as a sub-account under the PayFac’s master account. Relationships of modern humans with other human species, such as Neanderthal etc, ranged from killing and eating each other to interbreeding. If your rev share is 60% you can calculate potential income. Next-generation ISO (or next-gen ISO) is a. ISOs never directly touch a merchant’s money as the money will flow directly from the payment processor to the merchant’s merchant. As such, read on to discover how the PayFac model works, how to get the best out of it, and how your company can become a payment facilitator. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. The former, conversely only uses its own merchant ID to process transactions. An ISO acts as a middleman, facilitating the relationship between the ISV and the payment. an ISO. Payfac 45. However, the setup process might be complex and time consuming. Unlike PayFac technologies, ISO agreements must include a third-party bank to sponsor the contract. The contract is typically between the sponsor and the merchant, but the ISO may sometimes be included in a three-party agreement. The customer views the Payfac as their payments provider. I SO. Extensive. Estimated costs depend on average sale amount and type of card usage. In short, Payment Facilitation is an operating model that affects the acquiring side of the payment ecosystem. Also, unlike an ISO, the PayFac provides the processing services, settlement of funds, and billing to the merchant. Software users can begin. Also take a look at some of the primary regulations payfacs face, such as those from the Financial Crimes Enforcement Network, Office of Foreign Assets Control, and USA PATRIOT Act. ISO: An Independent Sales Organization (ISO) is a company that refers businesses that need to accept card payments to processors and acquiring banks. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Even better? Funds are settled to the PayFac’s account and it’s determined by the PayFac to move those funds to the merchant. . Payment facilitation, or “payfac,” continues to grow in popularity among software providers and is designed to facilitate payment card acceptance without requiring individual merchants to go through the lengthy process of establishing traditional merchant accounts. 007 per transacation. Avoid the slow, manual sub-merchant onboarding with other payfac solutions, and offload your payments compliance obligations to Stripe. The most known examples are website-building companies which can provide integrated payment options, meaning ecommerce customers will see their experience improved as they will no longer need to actively look for third-party payment solutions. In this article we are going to explain why payment facilitator model is becoming so popular (attracting more and more entities) while ISO model is gradually dying out, vacating the space for new payment facilitators. PayFacs perform a wider range of tasks than ISOs. However, the setup process might be complex and time consuming. Top content on Payfac, Payment Services and SaaS Payments as selected by the SaaS Brief community. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. An ISV can choose to become a payment facilitator and take charge of the payment experience. PayFac vs ISO: When Does One Make Sense over The Other?In this article, you'll get an in-depth analysis of the pros and cons of #PayFac vs. A payfac is also responsible for underwriting and risk assessment, settling funds with submerchants, dealing with chargebacks and disputes, and ensuring compliance with regulations in the payment industry. However, the setup process might be complex and time consuming. The merchant fills out extensive paperwork in order to open their own merchant processing account. Payment Processors: 6 Key Differences. So, what. Both offer companies a means of accepting and processing payments, and while they may appear to be the. 20) Card network Cardholder Merchant Receives: $9. Checkout’s UK & Europe net revenues in FY2019 were $55M and grew 52% yoy. Payfac Pitfalls and How to Avoid Them. Browse Payfac and Payments content selected by the SaaS Brief community. For example, an. But a lot has. The main difference between a payment aggregator and a PayFac is the type of merchant ID (MID) used to differentiate accounts. A payment processor is a company that works with a merchant to facilitate transactions. 0. It is when a business is set up as a primary merchant account and provides payment processing to its sub-merchants. After the vetting process, the PayFac entity adds the sub-merchant to its master list of sub-merchants or customers. 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. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. A Payment Facilitator (PayFac) is a type of merchant services company that provides business owners with a way to accept electronic payments, both online and in-store. If the merchant fits the requirements, PayFac onboards is a sub-merchant under the master MID. Chances are, you won’t be starting with a blank slate. ISO vs. Gateway Service Provider. PayFacs perform a wider range of tasks than ISOs. In this sub-merchant model, Payfac has a master merchant account under which merchants are signed up, as sub-merchants. NPC is Vantiv's nationwide ISO merchant distribution business serving over 220,000 small-to-medium-sized merchants. A three-party scheme consists of three main parties. next-level service: 24/7, every day of the year. GETTRX’s Zero and Flat Rate packages offer transparent billing, competitive rates, and industry-leading customer service, making them ideal choices for businesses seeking a seamless payment experience. The PayFac aggregates transactions and sends them to their processor, keeping operations streamlined. You own the payment experience and are responsible for building out your sub-merchant’s experience. Payfac-as-a-service vs. 05 per transaction + $6 per monthly active account. Blog. While an ISO product will sometimes take weeks to approve a merchant due to the more stringent and quite often paper-based application process, PayFacs are able to. agent A specified good or service is a distinct good or service (or a distinct bundle of goods orBy setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Payscape is also a registered ISO/MSP for Fifth. Each ID is directly registered under the master merchant account of the payment facilitator. However, the setup process might be complex and time consuming. Want to know the difference between ISO and payment facilitator? ️ Read this summary to find out why payment facilitator concept has been rapidly gaining popularity. A PayFac is one of the types of a payment service provider (PSP). One of the main benefits to adopting the Payfac ® model is the increase in revenue you get from each transaction processed using your software. leveraging third party vendors. Those who implement the PayFac model get their residual revenue share for handling both business and technical aspects of merchant lifecycle. In order to provide a plausible explanation, we need to understand the evolution of the merchant services industry. PayFac vs ISO: Weighing Your Payment Options . For example, an. However, the setup process might be complex and time consuming. Reducing. Fast, efficient boarding solutions that orchestrate third-party and internal systems to help you turn prospects to customers – face-to-face, on the phone, or online. SaaS. ISVs create software for companies in the payments industry. Worldpay was one of the first processors to offer payfac extensibility. A Payment Facilitator, or PayFac, is a company that provides payment processing services to merchants looking to accept credit and debit cards. The Traditional Merchant Onboarding Process vs. A PayFac is a processing service provider for ecommerce merchants. What is an ISO vs PayFac? Independent sales organizations (ISOs) and payment facilitators (PayFacs) play important intermediary roles in the payments ecosystem. They provide the systems and technology that process transactions. To know that your payfac relationship is completely above-board, first know what a payment facilitator is and the issues related to money transmission. Owners of many software platforms face the need to embed. Depending on your processing volumes there are two different types of merchant accounts that you will qualify for, either a PSP and an ISO. For example, an. The PayFac, he said, has emerged, and evolved from its 1990s underpinnings where merchant acquirers had handled that merchant enrollment, boarding, underwriting and even settlement. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. PayFac vs ISO: When Does One Make Sense over The Other? Add comment. At the same time, Paragon Payment Solutions assumes the majority of risk and responsibilities related to operational expenses, chargebacks,. Sub-merchants sign an agreement with the PayFac for payment. Enabling businesses to outsource their payment processing, rather than constructing and maintaining their own. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. For example, if you’re selling in-store, then your ISO should offer you a point of sale software and. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. PayFac vs merchant of record vs master merchant vs sub-merchant. In a similar manner, they offer merchants services to help make the selling process much more manageable. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. For example, an artisan. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. 20) Card network Cardholder Merchant Receives: $9. Both PayFacs and ISO’s (independent sales organizations) act as intermediaries between merchants and payment processors . Here are several benefits: As a hybrid PayFac, your company can handle client onboarding in minutes or hours instead of the usual 48-72-hour time-frame required for merchant account setup. As a seasoned global executive with strategic leadership experience across banking, #. Payment facilitators have a registered and approved merchant account with the acquiring bank. Payment facilitator model is suitable and effective in cases when the sub-merchant in question is a medium- or large-size business. Classical payment aggregator model is more suitable when the merchant in question is either an. The new PIN on Glass technology, on the other hand, is becoming more widely available. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Payfac’s immediate information and approval makes a difference to a merchant. All ISOs are not the same, however. Research firm Statista estimates payfac transaction volume totaled $88 billion last year,. Software companies that focus on specific verticals, such as healthcare or childcare, are natural PayFac candidates. However, the setup process might be complex and time consuming. A payfac or PF, short for payment facilitator, makes it possible for you to accept payments from customers in a variety of ways, including card payments,. PayFac is more flexible in terms of providing a choice to. One of the reasons for this phenomenon is that many companies (including former independent sales organizations (ISO)) find it more profitable to combine the functions of an online gateway provider and a merchant service provider (MSP). PayFac vs ISO: Contractual Process. Both the PayFac and ISO acquisition models have unique benefits and drawbacks. The application users complete a simple application. Banks. 1) A PayFac always acts on sub-merchant’s (retailer’s) behalf, while an MOR might be the actual retailer. Merchants possess lang verstehen how. In fact, ISOs don’t. Though they seem similar on the surface, there are key differences in how they operate. Payfac = a software product, platform, or marketplace that has in integrated payments into its product, and is responsible for the risk of transactions processed by its customers. Payfac as a Service providers differ from traditional Payfacs in that. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. A payment facilitator (PayFac) is a merchant services business that sets up electronic payment and processing services for business owners, so they can accept electronic payments online or in-person. Business Size & Growth. PSPs, including PayFacs, are entities, to which acquiring banks and payment network providers delegate merchant lifecycle management functions in. Payfac’s immediate information and approval makes a difference to a merchant. However, the setup process might be complex and time consuming. payment processor question, in case anyone is wondering. But regardless of verticals served, all players would do well to look at. It’s an easy choice for the ISV or PayFac that wants to boost its growth and dip its toes into a very easy international market. For example, an artisan. Payment processors do exactly what the name says. To help us insure we adhere to various privacy regulations, please select your country/region of residence. But to banks and merchants it. Generally speaking, you will. Instead of relying on an ISO program that's heavily focused on payments as a service, we're changing the concept of what service actually means. For example, an. The choice between a PayFac and a payment processor depends on your business needs, industry, and desired level of support. 40% in card volume globally. In fact, they broke the mold when they offered Toast a payfac at $0. They typically work. ) The PayFac takes on merchants as its own contracted “sub-merchants,” which process their transactions through the master merchant account. These companies have proven to the acquiring bank they can satisfy those regulatory requirements and, as a result, may board as many of the SaaS’s. For example, an. 07% + $0. When you start accepting payments online, you need a merchant account from a payment facilitator with sufficient infrastructure and proper compliance to process payments . Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. Equip your business with the knowledge to choose the right payment strategy. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. PSPs facilitate payments and act as a proverbial middleman between you and the merchant. A PayFac sets up and maintains its own relationship with all entities in the payment process. Payment facilitators conduct an oversight role once they have approved a sub merchant. Principal vs. Cancel reply. Very few PayFac as Service providers publish pricing to sub PayFac’s and there is a reason. Marketplaces that leverage the PayFac strategy will have an integrated. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Payfac: What’s the difference? Independent Sales Organization (ISO) is a third-party entity that partners with payment processors or acquiring banks to facilitate merchant services. implementation of a payment facilitator model) calls for getting certified as one by the respective acquirer, and for. Similar to PayPal or Square, merchants don’t get their own. Now that you’ve learned about what a PayFac is, you might want more information. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Cutting-edge payment technology: Extensive. April 12, 2021. However, the setup process might be complex and time consuming. ISO, so you can choose one of the two, or you’re looking for a PayFac solution for your business. PayFac-as-a-Service has emerged from payment companies and independent sales organizations (ISO) that have gone through the regulatory compliance of PayFac registration. Integrated Payments 1. PayFac: How the Two Most Common Types of Payment Intermediaries Differ. So naturally, any company considering the option needs to make sure the investment they’ll make in the Payfac model makes sense financially. As he noted, among the firms that most commonly move down the PayFac path – ISOs, ISVs and platform businesses – the benefits stand out quite brightly: easier. A PayFac works by establishing one master merchant account, which can then be leveraged by multiple businesses for a small fee. One classic example of a payment facilitator is Square. eCommerce. For example, payment facilitators typically perform underwriting, boarding, and transaction monitoring. The merchant interacts directly with the ISO and follows their set processes to register and become. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Skaleet's Core Banking Platform helps marketplaces launch their PayFac solution by opening a merchant bank account and receiving a merchant category code (MCC) to acquire and aggregate payments for a group of smaller merchants, typically called sub-merchants. One of the key differences between PayFacs and ISO systems is the contractual agreement. Becoming a full payfac typically requires an agreement with a sponsoring merchant acquirer such as Worldpay, registering as a payfac with the card networks, becoming compliant with the Payment Card Industry Data Security Standard (PCI DSS. Examples. While an ISO, or independent sales organization, is similar to a Payfac, there are some key differences. This allows faster onboarding and greater control over your user. PayFac-as-a-Service helps you hit the ground running and quickly onboard customers while adhering to compliance standards. However, the setup process might be complex and time consuming. To put it another way, PIN input serves as an extra layer of protection. There are several ways for businesses to go about accepting payments, and two of the most popular provider options are PayFacs and Independent Sales Organizations (ISOs). In short, a PayFac or payment facilitator, is a master merchant that supports sub-merchants. In exchange for the user fees, PayFac underwrites these new merchants and assumes the risk of any payments made through its platform. Establish connectivity to the acquirer’s systems Two-way information flow: • Th Payfac pushes messages the acquirer (transaction info). This. Recommended for companies processing less than $50M of annual payments volume (APV) 66%. Uber could easily masquerade as a PayFac, but it would never choose to become one. If your sell rate is 2. Standard. The contract is typically between the sponsor and the merchant, but the ISO may sometimes be included in a three-party agreement. However, the setup process might be complex and time consuming. A PayFac processes payments on behalf of its clients, called sub-merchants. So naturally, any company considering the option needs to make sure the investment they’ll make in the Payfac model makes sense financially. It provides a technology, allowing to authorize transactions and, potentially, receive transaction settlement information. San Jose California Equipment Maintenance Agreement with an Independent Sales Organization. The distinction between wholesale ISO and PayFac is thusly less critical than the distinction between being a technology company and being a troglodyte. During Jim's tenure with NPC and Vantiv, he also drove the development of and relationship with several key NPC ISOs, as well as oversight and management of specific. Even though PayFacs and ISOs may seem to be quite similar on the surface, there are a few key differences between them. However, they do not assume. PayFac vs ISO: Weighing Your Payment Options . Payment facilitators, aka PayFacs, are essentially mini payment processors. The choice between a PayFac and a payment processor depends on your business needs, industry, and desired level of support. The Traditional Merchant Onboarding Process vs. Start earning payments revenue in less than a week. The PayFac model has gained popularity in recent years, as it allows businesses to simplify their payment processing and reduce costs, while also providing a better customer experience. However, the setup process might be complex and time consuming. Once you’ve been authorized as a payment facilitator, the ongoing costs continue often exceeding $100,000 a year. The Job of ISO is to get merchants connected to the PSP. In banking and payments, ISO stands for independent sales organization – a type of merchant services company that acts as an intermediary and matches merchants with the payment processing services they need. Blog. the PayFac Model. This can include card payments, direct debit payments, and online payments. In essence, PFs serve as an intermediary, gathering. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Now let’s dig a little more into the details. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. While there are many benefits of integrating to a Payfac, two of the most notable are frictionless onboarding and risk, liability and costs associated. One of the main benefits to adopting the Payfac ® model is the increase in revenue you get from each transaction processed using your software. , Concord, California (“Wells”). For example, an artisan. It also needs a connection to a platform to process its submerchants’ transactions. Payfac and payfac-as-a-service are related but distinct concepts. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. Recently, the concepts of PayFac and aggregators have started converging. However, the setup process might be complex and time consuming. Read article. PayFac-as-a-Service (PFAAS) combines easy-to-integrate payment technology, full-service offerings, and transparent pricing to deliver Independent Software Vendors a simple way to harness the full power of payment facilitation – minus. Under the PayFac model, each client is assigned a sub-merchant ID. Learning the meaning of the following terms will help you evaluate PayFac-as-a-Service providers and choose the one best suited to your needs. ISO vs. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. A payment facilitator (payfac) is a service provider for businesses that simplifies the merchant-account enrollment process. Learn more: PayFac vs ISO: which one to choose for your business? Benefits of becoming a PayFac. First popularized by firms like PayPal and Square, the payments facilitator (payfac) model is reshaping the payments ecosystem, allowing nonpayments companies that adopt it to participate more fully in the payments revenue stream. This relatively new payfac business model is experiencing rapid growth. PayFac vs. . The terms aren’t quite directly comparable or opposable. Payment Facilitation as a Service or as it commonly known PayFac as a Service, offers software platforms the ability to both monetize payments and onboard new users instantly. The PSP in return offers commissions to the ISO. ISO serves as an intermediary between merchants and acquiring banks, taking responsibility for essential functions such as merchant onboarding, sales. On. And this makes a difference for several reasons, when it comes to the pros and cons of using a ISO/MSP vs. The payments landscape has changed a lot in the last 20 years and your customers deserve modern payment processingInfinicept provides the method by which to monitor for these transactions within its exception reporting capabilities. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Underwriting is a risk assessment practice that helps the PayFac entity understand the nature of the sub-merchant business and the risks involved in onboarding such a profile. For example, an artisan. Most businesses that process less than one million euros annually will opt for a PSP. By viewing our content, you are accepting the use of cookies. You see. Delve deeper into. ) paying Toast, or Revel, or Clover FOREVER is a tough pill to swallow. Our payment-specific solutions allow businesses of all sizes to. (PayFac) Receives: $3. However, the setup process might be complex and time consuming. One classic example of a payment facilitator is Square. As part of the agreement, the PayFac obtains the right to onboard sub-merchants. What is a merchant of record? Read article. 5. One key difference between payment facilitators and aggregators is the size of businesses or merchants they work with. In contrast, PayFacs have one or two processor relationships and onboard ISVs as referral agents. ISO serves as an intermediary between merchants and acquiring banks, taking responsibility for essential functions such as merchant onboarding, sales. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. ISO: Key Differences & Roles In Payment Processing The world of payment processing has its fair share of acronyms, and two of the most popular are PayFac (Payment Facilitator) and ISO (Independent Sales Organization). You must be logged in to post a comment. Swipesum data all you need in know about Payfac vs ISO. This can include card payments, direct debit payments, and online payments. Lower. The PayFac must properly follow KYC practices and correctly assess the sub-merchants as all transactions can be aggregated under a single merchant ID. PayFacs take care of merchant onboarding and subsequent funding. Unlike PayFac technologies, ISO agreements must include a third-party bank to sponsor the contract. the PayFac Model. Blog. That is why the model seems so attractive for different. As mentioned, the primary difference between payment facilitators & payment processors lies in how merchant accounts are organized.