May 31, 2024
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
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

Payment Facilitation Challenges: Strategies for Success

Key Takeaways

The role of a payment facilitator (PayFac) has become increasingly significant in the digital marketplace, offering businesses an opportunity to manage and streamline payment processes directly. This model enhances operational efficiency and significantly boosts revenue through transaction fees. However, becoming a successful payment facilitator involves navigating complex challenges, from regulatory compliance and technical integration to risk management and customer support. This article explores these challenges and provides strategic insights on effectively overcoming them, positioning your business for success in the competitive world of payment facilitation.

What is a Payment Facilitator?

Overview of Payment Facilitation

Payment facilitation enables businesses to act as intermediaries, handling transactions on behalf of smaller merchants. This role is crucial in today’s digital marketplace, where seamless payment integration can significantly enhance a platform’s commercial viability. Payment facilitators are subject to oversight from three key stakeholders: banking and financial institutions, card networks, and regulatory bodies. These groups collectively ensure that payment transactions are secure and compliant with financial regulations.

Payment Facilitation

Types of Payment Facilitators

There are several types of entities that typically take on the role of payment facilitators: 

Becoming a Payment Facilitator

Becoming a Payment Facilitator

Entering the role of a payment facilitator involves forging key partnerships with acquiring banks and payment processors. These partnerships are essential as they provide the necessary infrastructure for processing transactions.

Payment Facilitation


Successful payment facilitators must cultivate robust collaborations across various sectors. These efforts bolster the technical infrastructure and ensure that the facilitator’s services are comprehensive and well-integrated into the market.

Advantages of Becoming a Payment Facilitator

Increase Your Revenue with Each Transaction

Adopting the payment facilitator model gives you a new revenue stream: a small percentage from each transaction processed through your system. This can rapidly accumulate, especially as transaction volumes grow, providing a substantial and steady source of income over time. This transformation in how you monetize your services is a key advantage of becoming a payment facilitator.

Operational Independence

As a payment facilitator, you gain complete control over the payment process. This independence allows you to operate without reliance on third-party payment providers. Handling everything from merchant onboarding to transaction disputes streamlines operations, reduces costs, and speeds up response times, enhancing overall efficiency.

Enhanced Customer Experience

The direct management of payment processes significantly boosts your ability to swiftly address and resolve any transaction issues your clients might face. This rapid response capability greatly improves client satisfaction, fostering loyalty and encouraging long-term business relationships. Below are specific ways through which improved customer experience can benefit your platform: 

By taking control of the payment facilitation process, you streamline operations and create a more appealing and efficient service for your clients.

Regulatory Compliance and Merchant Onboarding

Adherence to Regulations

Payment facilitators must navigate a complex regulatory landscape to ensure every transaction complies with legal standards. This involves stringent adherence to rules set by banking authorities, card networks, and government bodies. Effective compliance not only secures the facilitator’s operational legitimacy but also protects against potential legal and financial penalties.

Challenges in Merchant Onboarding

The process of onboarding new merchants presents significant challenges, primarily due to the required comprehensive risk assessment. This assessment evaluates a merchant’s business operations, financial stability, and potential fraud risks. It is crucial to be thorough in this assessment to prevent associating with high-risk or fraudulent entities, which could jeopardize the facilitator’s reputation and operational integrity. 

Strategies for Compliance and Efficiency

Employing these strategies helps balance the thoroughness required in risk assessments with the need for efficient onboarding.

Pricing Transparency and Monetization

Support Challenges

Pricing transparency is the clarity and openness with which a business communicates the costs of its services or products to its customers. Monetization involves a business’s methods to generate revenue from its services or products.

Payment Facilitation

Strategies for Effective Pricing

To address these challenges, payment facilitators should focus on developing clear and straightforward pricing models. This involves simplifying fee structures where possible and always communicating costs upfront to prevent surprises and build trust. Moreover, competitive and transparent pricing can significantly enhance a platform’s appeal, making it a preferred choice for merchants who may be comparing multiple providers.

Payment Gateway Project

Risk Management and Chargeback Handling

Managing Risks and Fraud

For payment facilitators, implementing advanced fraud detection systems is vital. These systems must accurately distinguish between legitimate and fraudulent transactions, balancing robust security with a seamless user experience. Minimizing false positives and reducing unnecessary friction is crucial to maintain smooth transactions and build trust with clients.

Payment Facilitation

Effective Chargeback Management

Overcoming these challenges involves continuous improvement and adaptation of fraud detection technologies, along with training and support for staff to handle disputes effectively and maintain high customer satisfaction levels.

Payment Gateway Project

Technical Integration Complexities

Integration Challenges

Incorporating payment processing capabilities into existing SaaS platforms presents various technical challenges. Ensuring API compatibility is a key issue due to the various merchant systems and the often inconsistent API standards. This lack of uniformity can make seamless integration complex, necessitating careful design and robust implementation. Such efforts are essential to ensure that the newly integrated payment functionalities do not disrupt the platform’s operations.

Payment Facilitation

Solutions for Smooth Integration

To address these integration challenges, payment facilitators should focus on several strategic approaches:

Enhancing Customer Support

Effective customer support in payment facilitation involves addressing two key areas:

Addressing Payment-Related Issues

Multi-Channel Support

How UniPay Enhances Payment Facilitation?

Navigating the challenges of payment facilitation demands a deep understanding of regulatory, technical, and customer service landscapes and a robust solution that addresses these complexities. UniPay provides such a solution, enhancing operational efficiency and customer satisfaction.

UniPay offers tools and services that simplify regulatory compliance, streamline technical integration, and improve merchant onboarding, addressing the risks and challenges outlined in the article. Their commitment to transparent pricing and effective risk management helps businesses exceed their financial and operational goals.

Embrace the future of payment facilitation with UniPay, where advanced technology ensures smooth and successful business operations.

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