Introduction
If you’re looking to become a PayFac, you need to be aware of the steps and requirements to become a Payment Facilitator. This guide outlines the steps you need to take to become a Payment Facilitator, as well as the additional benefits that come with PayFac status.
What is a PayFac?
A Payment Facilitator, or PayFac, is a company that provides payment processing services to merchants. PayFac’s are third-party entities that provide merchants with payment processing services, such as processing credit card payments and managing invoicing. They are typically integrated with merchant’s point-of-sale systems, providing merchants with a convenient and secure way to accept payments.
How to Become a PayFac
Becoming a PayFac is a multi-step process, but once you’ve done it, you’ll be able to provide payment processing services to merchants. Here are the steps you need to take to become a Payment Facilitator:
1. Obtain a Merchant Account: Before you can become a PayFac, you need to obtain a merchant account. A merchant account is a special type of bank account that allows you to accept payments from customers. You can either open a merchant account with a bank or use a third-party processor, such as Stripe or PayPal.
2. Get a Payment Gateway: Once you have a merchant account, you need to get a payment gateway. A payment gateway is a secure online platform that processes payments for merchants. Some payment gateways, such as Authorize.net and Stripe, are integrated with merchant accounts.
3. Get a Payment Processor: Once you have a payment gateway, you need to get a payment processor. A payment processor is a third-party service that processes payments for merchants. Popular payment processors include Stripe, PayPal, and Authorize.net.
4. Become PCI Compliant: To become a PayFac, you need to be PCI compliant. The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards that merchants must adhere to in order to process payments.
5. Get a Payment Facilitator License: Once you have all the required components, you need to apply for a Payment Facilitator License. This is a special license issued by the card networks that allows you to become a PayFac.
Benefits of Becoming a PayFac
Once you’ve become a PayFac, you’ll be able to provide payment processing services to merchants. Here are some of the benefits of becoming a PayFac:
1. Cost Savings: By becoming a PayFac, you’ll be able to reduce your processing fees. This is because PayFacs are able to pass on their lower processing fees to merchants.
2. Increased Security: As a PayFac, you’ll be able to provide enhanced security to merchants. This is because PayFacs are subject to additional security standards, such as the Payment Card Industry Data Security Standard (PCI DSS).
3. Increased Control: As a PayFac, you’ll have more control over the payment process. This is because PayFacs are able to control the flow of funds and are able to ensure that payments are processed quickly and securely.
Frequently Asked Questions about How to Become a PayFac
What is the cost of becoming a PayFac?
The cost of becoming a PayFac varies depending on the payment processor and merchant account you choose. Generally, the cost of becoming a PayFac is relatively low compared to the cost of processing payments through a merchant account.
Do I need a merchant account to become a PayFac?
Yes, you need to obtain a merchant account before you can become a PayFac. A merchant account is a special type of bank account that allows you to accept payments from customers.
Do I need to be PCI compliant to become a PayFac?
Yes, you need to be PCI compliant in order to become a PayFac. The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards that merchants must adhere to in order to process payments.
What are the benefits of becoming a PayFac?
The benefits of becoming a PayFac include cost savings, increased security, and increased control over the payment process. PayFacs are able to reduce their processing fees and are subject to additional security standards, such as the Payment Card Industry Data Security Standard (PCI DSS).
Do I need a payment gateway to become a PayFac?
Yes, you need to obtain a payment gateway before you can become a PayFac. A payment gateway is a secure online platform that processes payments for merchants. Some payment gateways, such as Authorize.net and Stripe, are integrated with merchant accounts.
Conclusion
Becoming a PayFac is a multi-step process, but it’s worth it in the end. By becoming a PayFac, you can provide payment processing services to merchants, while also enjoying the benefits of cost savings, increased security, and increased control over the payment process. If you’re looking to become a Payment Facilitator, this guide outlines the steps you need to take to become a PayFac.
