Skip to content
UniPayGateway
  • Home
  • Why UniPay?
  • Payment Solution
  • Pricing
  • Services
  • Resource Hub
    • Trending Articles
    • Guides
    • UniPay Gateway Payment Advice
    • UniPay Gateway Infographics
    • Payment Expert Consultation
    • Video Guides
    • FAQ
Demo
Home UniPay Gateway Payment Advice Payment Facilitator model for SaaS, ISOs, and ISV

Payment Facilitator model for SaaS, ISOs, and ISV

Share

Payment facilitator model is becoming increasingly popular among many types of companies. These include SaaS providers, investment firms, franchise owners, online marketplaces, and others. Thanks to its flexibility and profitability, PayFac model seems to perfectly adjust to the present-day market requirements. However, other models of merchant and referral services provision still remain relevant. We ae talking about value-added reseller (VAR), independent software vendor (ISV), and several kinds of ISO modifications.

Key alternatives to payment facilitator model

Within the payment industry, VAR model emerged as the product of ISO evolution. Beside simply reselling merchant accounts and serviced (as ordinary ISOs do), VARs provided consulting services, technical support, and even hardware solutions. This made them more viable and attractive option than traditional ISOs.

An independent software vendor (or ISV), usually, focuses on the technical side of electronic payment acceptance process and merchant solution provision. It does not participate in merchant underwriting and other merchant-specific tasks itself. However, it surely knows how to organize them smoothly from software perspective. An ISV, usually, has an option of getting underwritten as a regular payment facilitator by an authorized acquiring bank.

For a traditional ISO the only option to stay afloat in the present-day market situation is to become something else. The types of new entities an ordinary ISO can turn into include a PayFac, a wholesale ISO, a next-generation ISO, or a merchant services consultant.

Can an ISO survive without becoming a PayFac?

Becoming a PayFac (i.e. implementation of a payment facilitator model) calls for getting certified as one by the respective acquirer, and for implementation of a technical solution. Both these steps are costly and unacceptable for many ISOs.

Becoming a wholesale ISO is an option for companies with large merchant portfolios, especially, those including different high-risk merchant types. Wholesale ISO’s revenues come from diversification of customer base and large numbers of merchants they service. Additionally, a high-risk merchant, working under the umbrella of a wholesale ISO, is better protected against high chargeback rates, because these rates are calculated as average across the whole ISO’s portfolio members.

A next-generation ISO is, technically, a kind of a value-added reseller, because, in addition to merchant services, it, usually, offers an original merchant technology, and knows a lot about integration and certification processes.

If an ISO is a market expert, it can switch to merchant services consultancy mode. This step does not require any investments and allows the ISO to benefit from the expertise it already has.

So, yes, there is some light at the end of the tunnel for ISOs. Moreover, there are several “tunnels” they can successfully follow.

Learn more about different referral and merchant services models (payment facilitator model incuded) from the respective article on Paylosophy.

Question
Question?

Let us help you envision UniPay as part of your business

Request Demo

Our Blog
Our Blog

For expert payment advice, please visit our blog at Paylosophy.com

Visit Paylosophy

UniPay Gateway is the accomplished payment gateway software, being flexible and customizable it meets the requirements of the most demanding clients.

The choice of UniPay gateway is the choice of the reliable, time and industry tested payment solution, which can help your business to become more competitive and profitable.

Request Demo

Recent Press Releases

Our Services

  • Legacy System Replacement
  • Processing Consolidation
  • Payment Ecosystem Landscaping
  • PayFac Implementation
  • EMV Implementation

Who Are You?

  • Merchant
  • ISO
  • Software Provider
  • Billing Company
  • Collections Company

Social Media

  • Paylosophy
  • Facebook
  • Twitter
  • YouTube

Copyright © 2022 United Thinkers LLC

All Rights Reserved | Privacy Policy

All Logos and Trademarks used or mentioned on this page are copyrighted property of their respective owners and are used for display purposes only.