Episode 30 | The world of PayFac Part 1
PayFAQ: The Embedded Payments Podcast
English - December 05, 2023 18:00 - 11 minutes - 8.21 MB - ★★★★★ - 2 ratingsManagement Business payrix fintech payments payfac payment facilitation payment facilitator embedded payments Homepage Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed
The world of payment facilitation is an exciting place for software companies who want to become PayFac® developers. In this first part of a two-part conversation on the PayFAQ Embedded Payments podcast, Richard Drake, Senior Strategic Partner Manager at FIS, along with host Bob Butler, provide a look inside “PayFac land” and how Worldpay for Platforms has become the one-stop shop for software companies wherever they are on their payments journey.
“We've been offering the payment facilitator model since 2010, but we never had the ability between referral and full-blown payment facilitator. And we now have that with the Payrix acquisition,” he says. The in-between model is a key entry point into payment facilitation for software companies, because it offers attractive benefits and infrastructure support without a lot of the risk.
Drake explains that while everybody wants to be a full-blown PayFac to own the payments relationship and experience, you have to be ready to do it. “First of all, you’ve got to have a decent payments volume. If you don't have enough volume to generate the revenue to offset the costs of being a payment facilitator, then it doesn't make a lot of sense.”
He also says you need an experienced payments risk manager to onboard submerchants as well as a support infrastructure to answer questions about chargebacks, settlements, and billing. “When you're a payment facilitator, while we're on the back end, while we’re the engine, submerchants really have no idea who we are, because the payment facilitator is providing the infrastructure, the support, and has the relationship with the submerchant.”
It sounds like a big responsibility because it is. According to Drake, the reality is payments is hard, and being a PayFac is payments on steroids. Having someone who knows all the pitfalls and can help guide you toward better decisions is invaluable to your success. “We were a pioneer in building out this product and have the best and the most superior support team in the industry. You get all that knowledge at your beck and call, ready to go.”
So, take a listen and breathe a shy of relief. Then watch for part two of the conversation coming soon!