Payment Facilitator (PayFac)
A Payment Facilitator (PayFac) is a company that acts as a master merchant towards the acquirer and enables sub-merchants to accept electronic payments — without requiring each sub-merchant to have their own acquiring contract.
Payment Facilitator (PayFac)
A Payment Facilitator (PayFac) is a business model in which a company acts as a master merchant towards the acquirer and the card networks. Under its umbrella, sub-merchants can accept payments without having to conclude their own acquiring contracts.
The PayFac model is frequently used by platforms and marketplaces: the platform registers as a PayFac and can then independently onboard sub-merchants, perform KYC, and set transaction fees. Well-known PayFacs include Stripe, Square, and PayPal.
For SME marketplaces in Switzerland, running your own PayFac model is usually too complex — it requires registration with the card networks, extensive compliance, and significant capital. The alternative: use an existing PSP with a platform API that acts as a PayFac and takes care of the regulatory complexity for you.
Payment Facilitator Examples
Stripe is a payment facilitator: millions of sub-merchants accept payments via Stripe's master merchant agreement with the card networks.
A Swiss marketplace uses a PSP with a platform API as a PayFac. The PSP onboards the sellers as sub-merchants and handles compliance and payouts.
A SaaS platform becomes a PayFac itself and sets its own transaction fees for its sub-merchants — the difference to the acquirer rate is its margin.
Payment Facilitator FAQ
What is a Payment Facilitator (PayFac)?
A PayFac is a company that acts as a master merchant to enable sub-merchants to accept electronic payments — without each sub-merchant needing their own acquiring contract.
What is the difference between a PayFac and a PSP?
A PSP offers payment processing as a service. A PayFac goes further: they act as a master merchant themselves and can independently onboard sub-merchants and set fees. Many PSPs also act as PayFacs.
Can a Swiss SME become a PayFac itself?
Theoretically yes, but the effort is significant: registration with card networks, FINMA compliance, capital requirements and technical infrastructure. For SMEs, using an existing PSP with a platform API is more pragmatic.
What is a master merchant?
The master merchant is the PayFac itself — the company that holds the acquirer contract and under whose umbrella all sub-merchants accept payments. The master merchant bears the responsibility towards the acquirer.
