A payment facilitator (PayFac) is a company that enables other businesses to accept electronic payments by acting as a master merchant on their behalf. Instead of each business applying for its own merchant account with a bank, PayFacs aggregate multiple sub-merchants under one master account — getting businesses processing payments in hours rather than weeks.
How the PayFac Model Works
Traditional merchant acquiring requires each business to apply directly to a bank or ISO for a merchant account — a process that can take days or weeks and involves extensive underwriting. A payment facilitator changes this by:
- Obtaining a master merchant account. The PayFac registers directly with Visa and Mastercard, taking on the contractual and financial responsibility for the transactions it processes.
- Onboarding sub-merchants. Businesses that sign up become sub-merchants. The PayFac performs its own KYC/KYB checks and can approve merchants quickly — without each needing their own bank relationship.
- Processing transactions. When a sub-merchant accepts a payment, funds flow through the PayFac’s master account. The PayFac distributes funds to the sub-merchant minus its processing fee.
- Managing risk. Because the PayFac is financially liable for sub-merchant activity, it monitors transactions for fraud, chargebacks, and compliance violations on an ongoing basis.
PayFac vs. Traditional Merchant Acquiring
| Feature | Traditional Acquiring | PayFac Model |
|---|---|---|
| Merchant account | Individual account per merchant | Sub-merchant under master account |
| Onboarding time | Days to weeks | Minutes to hours |
| Underwriting | Full bank underwriting | Simplified PayFac underwriting |
| Risk responsibility | Acquirer bears risk | PayFac bears risk for sub-merchants |
| PCI scope | Merchant manages compliance | PayFac reduces merchant scope |
Why Platforms Choose the PayFac Model
The PayFac model has grown rapidly because it transforms payments from a commodity into a revenue stream. A platform with PayFac capabilities can earn a spread on every transaction its users process, offer a fully integrated checkout experience, and become deeply embedded in daily merchant operations.
ConvesioPay: The PayFac Model in Action
ConvesioPay operates as a PayFac built on Adyen’s global acquiring infrastructure, bringing enterprise-grade payment facilitation to WooCommerce merchants and agencies. Merchants get fast onboarding, transparent pricing at 2.9% + $0.30 per transaction with no monthly fees, and access to the full Adyen payment network — without navigating the 12–18 month process of becoming a registered PayFac themselves.
Ready to get started? Learn more about ConvesioPay or view pricing.