How Virtual Payment Facilitator Model works

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

Difference between virtual and traditional payment facilitation

Virtual payment facilitator model is a handy option for software platform providers that want to increase their revenues by providing merchant services to their clients. If a SaaS or POS platform provider wants to become a payment facilitator but is not ready for significant upfront costs and for assuming the whole set of PayFac-specific responsibilities, then virtual payment facilitator model is a good “try it before buy it” in-between solution. In contrast to the a PayFac, a virtual PayFac is not responsible for merchant underwriting process. However, it handles almost all other aspects related to merchant life-cycle, such as onboarding, funding, payment processing, and chargeback handling. A virtual payment facilitator works under the umbrella of a larger payment service provider that offers virtual PayFac service and handles merchant underwriting. For some companies virtual payment facilitator model may be a long-term solution, while others may switch from virtual to traditional payment facilitation.

Learn more about the benefits of virtual payment facilitation model the respective article on Paylosophy.