Difference between ISO and PayFac

Written by

James Davis

Written by James Davis

Senior Technical Writer at United Thinkers

Author of the Paylosophy blog, a veteran writer, and a stock analyst with extensive knowledge and experience in the financial services industry that allows me to cover the latest payment industry news, developments, and insights. Read more

Reviewed by

Kathrine Pensatori

Reviewed by Kathrine Pensatori

Product Specialist at United Thinkers

Product specialist with more than 10 years of experience in the Payment Processing Industry. I help payment facilitators and PSPs solve their various payment processing issues. Read more

The number of payment facilitators at the modern merchant services market is rapidly growing. The concept of a payment facilitator is gaining popularity, alongside other concepts, defining different intermediary entity types, such as a payment service provider (PSP), a payment aggregator, merchant services provider (MSP), or an independent sales organization (ISO). Many present-day ISOs are considering the idea of switching to payment facilitator business model. Payment facilitators more actively participate in merchant underwriting and merchant funding processes, than ISO, and get more control of the process.

How to switch to the new operations model

In order to switch to the new operations model, an ISO needs to address some important issues. They include searching for a suitable payment processing partner (either an existing or a new one), studying its transaction pricing offering, and handling of a many technical aspects. For instance, if some card-present solution is to be implemented, then payment terminal fulfillment and related questions have to be carefully addressed. In essence, the task of a payment facilitator is to be able to handle all the stages of a merchant’s life cycle.

A detailed strategy for becoming a payment facilitator is provided on Paylosophy.