What is Payment Facilitator?

Approvals & UnderwritingAlso: PayFac

Payment Facilitator

A company that onboards sub-merchants under its own master merchant account and takes on the associated risk and compliance. PayFacs speed up onboarding but apply their own risk appetite, which frequently excludes high-risk categories.

The PayFac model powers many modern platforms and marketplaces. For high-risk merchants the trade-off is the same as with aggregators: fast setup, but risk decisions made for the platform rather than for your business.

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Related terms

Approvals & Underwriting

Payment Aggregator

A provider that places many merchants under one shared master account for instant onboarding. Aggregators are convenient for low-risk businesses but freeze or drop high-risk merchants quickly, because one account's risk is pooled with everyone else's.

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Payment Methods

Marketplace Payments

Payment flows for platforms that connect many buyers and sellers, including split payouts to third parties. Marketplaces face added complexity around onboarding sellers, distributing funds, and managing risk across many sub-accounts.

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Approvals & Underwriting

Underwriting

The review process a provider uses to decide whether to approve a merchant and on what terms. Underwriters assess the business model, documentation, processing history, and risk exposure to set approval, pricing, limits, and any reserve requirements.

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