Merchant Updates Blog

A Deeper Look at ‘Payfac in a Box™’

Posted by Danielle Lafontaine on Apr 26, 2017 10:10:24 AM
Find me on:

PayfacinaBoc_logo_FINAL_TM.jpgThe payments industry continues to rapidly evolve which creates excitement but also confusion within the payments ecosystem, especially when it comes to facilitating payments on software platforms. Similar to what Stripe offers for smaller e-commerce merchants, our ‘Payfac in a Box™’ solution is like Stripe for Practice Management and enterprise software systems. Payfac in a Box™ delivers a full suite of API calls by transaction type in each language so developers can easily cut and paste the code segments you need. Createing an easy, customizable, full circle payments software integration that pays you back in recurring revenue month after month. 

A ‘payfac’, which is short for payment facilitator, is a fairly new concept which is essentially an operating model inside of the acquiring side of payments. The key benefits of integrating payments with a payfac into software are that the responsibilities, risks, and cost associated with being your own registered, PCI certified and technically certified gateway nearly disappear. These requirements make the route of becoming a payfac difficult for most software providers. We essentially offer all of that ‘in a box,' so to speak, so that the end-user merchants of the software system get to batch onboard and process immediately and securely. And the development time is minimal to integrate payments into a software system. It can usually be done within one or two days.

Payfac Wins for Software Developers and Merchants:

  • Much shorter individual PCI SAQ.
  • No annual PCI fees.
  • No card storage security issues.

It’s all done for you. Easy!

Benefits of Using Payfac  in a Box™:

  • Expedites and simplifies the merchant account enrollment process.
  • Allows for flexibility on where and how often funds are settled and disbursed to merchants.
  • Allows for both automated posting and reconciliation as well as analytics.

Sounds pretty simple, right? Anyone who thinks to themselves, “I think I will just become my own Payfac since I develop software this module should not be a big deal right?” Wrong. So, what are the responsibilities, risks, and costs associated with becoming a payment facilitator like us? Good question!

First, there are underwriting expectations/responsibilities as the gateway. We have to create the policies and documentation that explains the due diligence process you go through as a Payfac in underwriting your sub-merchants. This due diligence may include: KYC, AML, Graduation process, Funds flow schematic validated in many cases by third party opinions that cost tens of thousands of dollars in time, legal and other consultative services and fees.

Secondly, we assume the risks involved in payment processing including fraud loss, chargebacks, and non-payment. And we are responsible for all compliance fees. As a registered payfac the card brands like VISA, MasterCard, and Discover require level 2 PCI Attestation to be complete which means tens of thousands a year in AOC, ROC and vulnerability scanning not to mention periodic "reviews" which are more like audits from MasterCard. Oh and not to mention Visa, who separately charges an annual fee of $5K for payfac registration.

Next up are the legal fees involved. Let's face it; it would be silly not to protect yourself in negotiating an agreement which means thousands or tens of thousands of dollars in legal fees in the redlining/negotiation process.

Lastly, we have to deal with certification. Ask any payfac who has certified, and they will tell you this is a black hole. This piece varies depending on the requirements of your specific industry, tender types, and hardware that you are certifying if you are or plan to play in the card present environment. Certification also involved a review of your authorization and settlement process, payment page, ACH/e-check, tokenization, disbursement APIs, reporting and establishing a file connection, and more. Again, ask any payfac who is up and running, and they will estimate the average cost of development is around 50K takes a minimum of six-months time. 

Now that you understand everything involved in becoming a payfac you’ll be able to appreciate what we’ve architected with Payfac in a Box.

Our easy-to-use suite of APIs is a complete commerce payments toolkit for practice management and enterprise software developers utilizing JavaScript, Ruby, PHP, Python, C#, Android, Objective-C, and cURL. Utilizing our payment gateway like Stripe, you can create integrated payment solutions that will fit your software or website’s unique specifications. We enable all major card types Visa/MasterCard/Discover/Amex as well as ACH, E-check and even Electronic Bill Pay Presentment (EBPP) through one interface! We also have a full electronic bill presentment and payment (EBPP) platform that allows you to pick and choose the functionality you need to build a full circle billing and collections integration. Learn more about our Singular BillPAY EBPP solution now.

The proof is in the Specs/APIs – LEARN MORE NOW.

Contact us after you have reviewed the specs and APIs to setup your payments integration. Call 877-829-2170 option 4.

Topics: custom rate payment processing, credit card payments, flat rate payment processing, payments integration, payfac in a box, payfac, payment facilitator

Knowledge is Power! 

Get the latest news, tips and payment processing industry intel right here. 

We hope you enjoy the variety and depth of the content we provide. Access even more great content in our Merchant Education portal where you'll find eNewsletters, webinars, videos, whitepapers, scam alerts and more! 

Blog Sign Up

Recent Posts