![]() Most ISVs don’t have this appetite for building and maintaining a new technology platform outside of their core business. You’ll also need an in-house underwriting team. You’ll essentially be building your own payment gateway to power functions such as settlements, boarding merchant accounts, billing, chargebacks, and more. Apart from the coders you’ll have working on this, there are many very specific guidelines to follow as well as state-specific rules. Unfortunately, this isn’t an option most ISVs will be willing to pursue mainly due to the cost, required time and internal expertise required to build the technology needed to support a Pay-Fac model. Rather than use Stripe, you could become your own Pay-Fac. One glaring downside is that the ISV doesn’t see much of the processing revenue and reporting isn’t very detailed. With a single integration, an ISV can add payment functionality and a merchant can get set up and begin accepting payments almost immediately. Many look at Stripe as the shining example of how easy payments can be. Pay-Facs can remove onboarding friction by taking some shortcuts that they’ve earned with how they’re built. In layman’s terms, a Pay-Fac is a type of payment company that has the authority to create sub-merchant accounts (i.e., each of your customers) without getting a third-party involved, thus eliminating the step of the merchant applying for an account. One way to streamline the merchant onboarding process is to work with a payment facilitator (Pay-Fac). All that relationship building during the sale is put in jeopardy by a third-party processor who not only holds all the power but also benefits from the majority of revenue. ![]() After your team goes through the effort of selling a merchant on the benefits of your software and you complete the installation, your customer then has to work with a third-party payments company to apply for their merchant account. Apart from the obvious challenges of time, cost, and complexity, the resulting solution often creates a disjointed merchant experience. Many ISVs turn to other payment companies to integrate payment processing into their software. When it comes to building credit card processing into your software, it hasn’t historically been an easy or affordable process and, often, it’s the merchant who suffers. Developers can simplify payments for merchants on their own
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