Understanding the role of a payment facilitator and how to choose the right partner for your business

The rise of digital payments has reshaped the way consumers and businesses exchange money. Online payment platforms and mobile apps have made it possible to make quick, secure, and convenient transactions that once required time-consuming paperwork and in-person interactions. It’s this evolution in payment technology that has simplified our daily lives and made businesses more efficient and scalable.

Despite the convenience and benefits that digital payments offer, finding the right payment facilitator can be a daunting task. In this article we delve into what a payment facilitator is and what research you should consider doing before you select the perfect partner for your business.

What is a payment facilitator, and what do they do?

A Payment Facilitator, or PayFac, is a specific type of payment service provider that makes it easy for businesses (or merchants) to start accepting payments quickly. Instead of each individual merchant obtaining their own merchant account from a financial institution, a PayFac aggregates multiple merchants under its own master merchant account.

Registered PayFac businesses already have efficient processes and tools in place to quickly onboard businesses, without the need for extensive paperwork or underwriting. They also eliminate a lot of the work related to compliance with Know Your Customer (KYC) requirements, Anti-Money Laundering (AML) regulations – all of which can be time consuming and costly for individual businesses.

What to look for when choosing a payment partner?

Whether you’re a startup or an established enterprise, selecting the right payments provider is a strategic decision that impacts your business’s growth, security, and profitability.  Here are a few things to consider and evaluate when selecting the right partner for your business: 

Outline exactly what your business needs

• Assess your payment requirements:  What type of business are you today (online, brick-and-mortar, hybrid), and what payment methods do you need to accept for your customer base? By identifying your specific requirements, you can narrow down options to providers that cater to your business type and customer preferences. 
• Identify your growth plans: While your current payment needs are crucial, don’t forget to plan for the future. Look for providers that offer scalable solutions to accommodate increasing transaction volumes and expanding services, which is vital for ensuring you won’t need to switch providers as your business expands. 

Evaluate pricing and security and compliance capabilities 

• Consider the security and compliance protocols: Data and payment security should be a non-negotiable top priority for any business, especially when it comes to processing payments. Make sure to choose a provider that offers robust security features, such as encryption, fraud detection, and chargeback protection.
• Know exactly what you are paying: Don’t let pricing be a surprise. Partner with someone that offers a transparent pricing model. This includes not only transaction fees but also setup costs, monthly fees, and any other charges that may apply.

Don’t forget user experience and integration

• Seamless Integrations means better brand consistency: Especially true for e-commerce merchants, a great payments provider should be able to seamlessly integrate their checkout widget into your existing platform and provide a user-friendly experience. It should feel like a natural extension of your brand. Some providers even offer white-label solutions, allowing you to customise the payment experience to match your branding which enhances the customer experience and reinforces your brand identity.
• Customer experience and payment efficiency matter: The user experience should be smooth and efficient. Long and inefficient payment processes (in both in-person and online transactions) and complex forms can lead to lost sales and abandoned carts. Choose a provider with a user-friendly interface that removes friction from the payment process and allows your customers to complete transactions quickly and easily.

Accept payments quickly and securely with Spenda

Choosing the right payment facilitator partner is a crucial decision for your business. With Spenda, you can streamline your payment processing, simplify onboarding, and offer your customers a seamless and secure transaction experience. Our expertise in payments and commitment to compliance mean that you can focus on what you do best while we handle the payment intricacies.

Spenda is a registered PayFac and serves as both a technology solutions provider and a payment processor, delivering the essential infrastructure to streamline business processes before, during, and after payment events. Our comprehensive solution empowers businesses of all sizes to effortlessly manage invoices, facilitate payments, and even access on-demand funding, all within the Spenda ecosystem. With our integrated platform, businesses can optimise their financial operations and enhance overall efficiency.