Your goal as an ISV is to offer your clients an end-to-end solution that helps them manage their business. Payments are integral to this goal, and offering payment facilitation will undoubtedly boost your revenues. However, becoming a payment facilitator is time-consuming and expensive. Payment-facilitation-as-a-service or PFaaS removes hurdles and helps you offer complete product suites to your clients.
In this article, you’ll learn what payment-facilitation-as-a-service is, along with the following:
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How does payment-facilitation-as-a-service work?
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What are the benefits of PFaaS for ISVs and SaaS platforms?
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Frequently asked questions about payment-facilitation-as-a-service
Table of Contents
What is payment-facilitation-as-a-service?
Payment facilitation or PayFac-as-a-Service helps software platforms offer payment facilitation to their clients without the hassle of applying to become a payment facilitator. Platforms can own the onboarding journey, customize flow to match their brand, and quickly onboard clients. As a result, platforms can achieve fast go-to-market times.
Among other benefits, payment-facilitation-as-a-service helps software platforms remove complexity in costs, offer out-of-the-box payment acceptance, and provide easy compliance to their clients.
How does payment-facilitation-as-a-service work?
Payment-facilitation-as-a-service removes all complexities and helps you offer payment facilitation to your clients. The PayFac-as-a-Service provider provides the infrastructure that you can use to instantly offer payment facilitation to your clients.
For instance, a salon business management app can leverage a PFaaS provider’s expertise to help merchants accept payments from customers. From the merchant’s perspective, they sign up to a business management platform that offers them seamless functionalities from appointment scheduling to payments.
The ISV or SaaS platform bolts the PFaaS provider’s technology onto their platform to create a product that addresses their merchants’ every business need. As a result, the ISV avoids paying hefty fees and spending valuable resources applying to become a payment facilitator.
How does payment-facilitation-as-a-service benefit software platforms?
PayFac-as-a-service offers ISVs and SaaS platforms multiple benefits. One of the biggest benefits is that you don’t have to dedicate costly resources to set up a non-core business function. Payment-facilitation-as-a-service providers offer readymade solutions that you can instantly leverage to make an impact with your clients.
Here are some of the other major benefits of PayFac-as-a-Service:
1. Offer complete product suites
User experience is paramount these days. The more seamless your product is, the easier it is for you to stand out from the crowd. Payments are integral to every business, and a platform that doesn’t offer users the ability to accept payments easily will struggle to gain acceptance.
Payment-facilitation-as-a-service helps you offer this critical functionality without incurring hefty financial and technical costs. You can instantly create a seamless platform that delivers immense value to your merchants.
2. Transparent cost structures
Clients typically face issues calculating the impact of payment processing on their margins. With payment-facilitation-as-a-service, you can offer simple and transparent pricing that removes these hurdles. What’s more, PayFac-as-a-Service also helps you monetize payment facilitation.
You can charge your clients a marginal fee and processing cost above the amount the PayFac charges you and build a new revenue stream. The result is a great experience for your clients and additional cash flow for you.
**Related Read: Importance of Payment Processing**
3. Fast merchant onboarding
One of the biggest hurdles of becoming a payment facilitator is dealing with underwriting risk. Every new merchant brings additional risk to your business, and your bank will want proof of sound underwriting practices. These scenarios often distract SaaS platforms from their core business and delay merchant onboarding, leading to a poor user experience.
For instance, a salon management app will devote its resources to understanding its customers’ needs. Expecting this platform to master underwriting risk and banking compliance is unrealistic. PFaaS providers remove this headache by offering underwriting services as standard.
Thanks to advanced technology and industry expertise, PayFac-as-a-Service providers can help you monitor risk and onboard merchants quickly. You won’t encounter the hassles associated with KYC and AML processes.
Your merchants will experience seamless onboarding and can get started with their businesses from day one.
4. Instant payment acceptance
PayFac-as-a-Service helps you offer instant payment acceptance capabilities to your clients. You won’t have to install additional hardware or software and will receive full back office support such as invoicing and billing.
By transferring these benefits to your clients, you can offer them a memorable user experience that will have them coming back for more.
5. Easy compliance
Compliance is essential in the payments world. As a payment facilitator, you will have to become PCI compliant and monitor merchant transactions according to AML guidelines. Chargeback and other forms of fraud are examples of services merchants expect from payment facilitators.
Providing these services is easy when you opt for PayFac-as-a-Service. With a single solution, you can offer industry-standard compliance controls and fraud protection. Your merchants will trust your platform more and opt for your services.
Conclusion
Payment facilitation is an essential pillar in modern SaaS platforms and ISVs. However, becoming a payment facilitator is complicated. PayFac-as-a-Service removes bottlenecks and gives you a seamless PayFac solution that integrates with your platform.
As a result, your clients can instantly accept payments, and you can elevate your payment process compliance and underwriting to match industry standards.
Curious about how you can boost customer retention, engagement, and revenues by leveraging PayFac-as-a-Service? Get in touch with us here.
FAQs
1) What is payment facilitation as a service?
Payment facilitation or PayFac-as-a-Service helps software platforms offer payment facilitation to their clients without the hassle of applying to become a payment facilitator. Platforms can own the onboarding journey, customize flow to match their brand, and quickly onboard clients. As a result, platforms can achieve fast go-to-market times.
2) Why is payment-facilitation-as-a-service ideal for ISVs?
With PFaaS, ISVs can experience the following benefits:
- Offer seamless and complete product suites
- Simplify payment acceptance cost structures for clients
- Onboard clients quickly
- Offer instant payment acceptance to clients
- Install industry-standard compliance quickly
3) How does payment-facilitation-as-a-service boost revenues?
PayFac-as-a-Service helps you boost revenues by eliminating the traditional bottlenecks to payments acceptance, offering clients simple cost structures and fast onboarding. The result is a memorable user experience that keeps clients returning for more.
Additionally, you can layer custom cost structures on top of the ones your PayFac-as-a-Service provider offers, turning payment facilitation into an additional revenue stream. For instance, you can charge an additional subscription fee for payment acceptance and monetize your product to a greater extent.
4) Does PayFac-as-a-Service simplify compliance?
Yes. Payment-facilitation-as-a-service providers offer an instant upgrade to industry-standard PCI compliance practices. Features such as tokenization SDKs are examples of standard compliance offerings.
In addition, PFaaS providers help you monitor client transactions to ensure you’re always complying with AML laws.
5) How does PayFac-as-a-Service work?
PayFac-as-a-Service is extremely simple to adopt. Your service provider will help you leverage a state-of-the-art payments infrastructure that you can offer your clients. You can also offer back-office capabilities such as invoicing and billing.
These out-of-the-box services will help you gain a larger market share in your industry and build trust amongst your customers, both essential to boosting revenues.
