PayFac-as-a-service delivers a competitive payment program with instant onboarding of merchants while creating a seamless customer experience. SaaS. A PayFac will function as a payment facilitator in this general sense (though it's important to note the differences outlined above), and you can use a payment gateway to translate data between the PayFac and the credit card providers. Onboarding workflow. For example, an. Before this model was available, businesses would often partner with an ISO to enable payment acceptance for its clients—and many still do today. The payment facilitator model was created by the card networks (i. Before outlining the similarities and commonalities of ISOs and ISVs, it’s helpful to recap their key differences: ISOs sell payment solutions to merchants, with wholesale ISOs offering additional services such as customer support. For example, an. Payment Processors and ISOs have a symbiotic relationship, with each party benefiting from the collaboration. The distinction between wholesale ISO and PayFac is thusly less critical than the distinction between being a technology company and being a troglodyte. (ISO). For example, an. ISO: What Is the Optimal Integrated Payment Strategy in SaaS? Advertisement. Wide range of functions. The payfac model is a framework that allows merchant-facing companies to. The PayFac, he said, has emerged, and evolved from its 1990s underpinnings where merchant acquirers had handled that merchant enrollment, boarding, underwriting and even settlement. In this article we are going to explain why payment facilitator model is becoming so popular (attracting more and more entities) while ISO model is gradually dying out, vacating the space for new payment facilitators. In fact, when a merchant is seen as potentially liable for fraudulent activity, an ISO and/or processor are sometimes named as codefendants, along with people at the ISO or processor who. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. PayFacs provide a similar service to standard merchant accounts, but with a few important differences. This was around the same time that NMI, the global payment platform, acquired IRIS. Start earning payments revenue in less than a week. Here, the Payfacs are themselves the merchants of record. ISO vs. Stripe is an ISO with First Data Merchant Services (FDMS, I believe now owned or controlled by Wells Fargo) doing the actual processing and, as such, assumes a different legal role than PayPal (which is a VAR for Paymentech). 70. ; Re-uniting merchant services under a single point of contact for the merchant. Contracts. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. This allows the businesses under the payfac’s umbrella to focus on their core operations rather than deal with the complexities of the. Marketplace vs ecommerce platform: What's the difference? Read article. In fact, ISOs don’t even need to be a part of the merchant’s contract. Often, ISVs will operate as ISOs. Payment facilitator model is a lucrative option for many present-day companies. It runs about 40 minutes (really shooting to be less than 30) and we discuss the differences in payfac vs ISO and where payfac is heading. The tool approves or declines the application is real-time. Sometimes a distinction is made between what are known as retail ISOs and. The facilitator company collects and manages the money. This can include card payments, direct debit payments, and online payments. Offering similar services to popular payment processing tools like Stripe and PayPal, PayFac is a third-party merchant service provider. PayFac vs. Payment Facilitators vs. Depending on your processing volumes there are two different types of merchant accounts that you will qualify for, either a PSP and an ISO. Payment Facilitation as a Service or as it commonly known PayFac as a Service, offers software platforms the ability to both monetize payments and onboard new users instantly. Acquiring Bank. Lower. For example, in an ISO relationship, you’re unable to customize the onboarding experience for your customers, but with managed payment facilitation, you can. (ISO). 70. Establish connectivity to the acquirer’s systems Two-way information flow: • Th Payfac pushes messages the acquirer (transaction info). “Plus, you have a consumer base that is extremely savvy when it. In contrast, PayFacs have one or two processor relationships and onboard ISVs as referral agents. In this article we are going to explain why payment facilitator model is becoming so popular (attracting more and more entities) while ISO model is gradually dying out, vacating the space for new payment facilitators. PayFacs are often more suitable for SMEs seeking a quick and straightforward setup. But to banks and merchants it. A PayFac sets up and maintains its own relationship with all entities in the payment process. Both the PayFac and ISO acquisition models have unique benefits and drawbacks. However, the setup process might be complex and time consuming. Registered payment facilitators earn 20-40 basis points more per transaction than they would riding the rails of another wholesale PayFac. 3. For example, an. So, what. This is because PayFacs or master merchants must have a market or domestic entity wherever they are providing. implementation of a payment facilitator model) calls for getting certified as one by the respective acquirer, and for. A. Payfac is a contracted Independent Sales Organisation (ISO), so they have the responsibility to manage their own sales agents and underwriters and adhere to the rules of the card associations. Here are the six differences between ISOs and PayFacs that you must know. That is why the model seems so attractive for different. Payment Facilitators are 100% responsible for PCI Compliance, risk underwriting, funding and providing payment support. Can an ISO survive without becoming a PayFac? Becoming a PayFac (i. However, the setup process might be complex and time consuming. Why more and more acquirers are choosing the PayFac model. Whatever information you need, we can help. But no matter the vertical, the build versus buy question — that perennial. ISO vs PayFac: What’s the difference? An ISO is a third-party company that refers merchants to acquiring banks or payment service providers. PayFac vs ISO: Differences, Similarities, and How to Choose the Right One 11 Like Comment Share Copy; LinkedIn; Facebook; Twitter; To view or add a comment, sign in. Blog. Some ISOs also take an active role in facilitating payments. Avoid the slow, manual sub-merchant onboarding with other payfac solutions, and offload your payments compliance obligations to Stripe. However, the setup process might be complex and time consuming. May 24, 2023. ISOs never directly touch a merchant’s money as the money will flow directly from the payment processor to the merchant’s merchant. For example, an artisan. Under the PayFac model, each client is assigned a sub-merchant ID. 1. However, the setup process might be complex and time consuming. For example, an artisan. Cancel reply. 83% of card fraud despite only contributing 22. Global Electronic Technology, Inc. PayFac-as-a-Service (PFAAS) combines easy-to-integrate payment technology, full-service offerings, and transparent pricing to deliver Independent Software Vendors a simple way to harness the full power of payment facilitation – minus. However, the setup process might be complex and time consuming. Payment facilitation requires the master merchant (usually the software provider) to take legal and financial responsibility for the transaction that occur under the primary merchant. ISO serves as an intermediary between merchants and acquiring banks, taking responsibility for essential functions such as merchant onboarding, sales. Besides that, a PayFac also. As small business grows, MOR model might become too restraining, while payment facilitators provide robust APIs, which sometimes allow merchants to customize each function separately, according to their. PayFacs work under one or more payment processors, operating in a layer of the industry between processors and merchants. What is a merchant of record? Read article. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. The arrangement made life easier for merchants, acquirers, and PayFacs alike. This means that a SaaS platform can accept payments on behalf of its users. But regardless of verticals served, all players would do well to look at. They typically work. However, the setup process might be complex and time consuming. In this post, we break down the differences between a few of the most common routes you can take when it comes to integrated payment models: independent sales organization (ISO), full-fledged payment facilitator (PayFac), or PayFac-as-a-Service (PFaaS) models. All in all, the payment facilitator has the master merchant account (MID). 4. So, what. PayFac, which is short for Payment Facilitation, is still a relatively new concept. For example, an artisan. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. However, the setup process might be complex and time consuming. Estimated costs depend on average sale amount and type of card usage. 1. But of course, there is also cost involved. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Since it is a franchise setup, there is only one. The PayFac does not have to underwrite all merchants upfront — they are instead, underwriting the merchants essentially as they continue to process transactions for them on an ongoing basis. 1 comment. On. Here are the six differences between ISOs and PayFacs that you must know. A guide to marketplace payments. However, the setup process might be complex and time consuming. During Jim's tenure with NPC and Vantiv, he also drove the development of and relationship with several key NPC ISOs, as well as oversight and management of specific. This allows faster onboarding and greater control over your user. However, the setup process might be complex and time consuming. or by phone: Australia - 1300 721 163. ISV: An Independent Software Vendor (ISV) is a company that creates and sells software. At the same time, Paragon Payment Solutions assumes the majority of risk and responsibilities related to operational expenses, chargebacks,. Visa vs. However, the setup process might be complex and time consuming. You may have also heard the name “Member Service Provider (MSP)”, which is the term Mastercard uses to call ISO. Without ISOs, a relatively small handful of global and regional payment processors would each be forced to interact with thousands. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. However, the setup process might be complex and time consuming. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Payfac and ISO models involve much more regulatory and compliance overhead than payfac-alternative models. Blog. The first is why we say that “data is the. This. They typically work with a variety of acquiring banks, using those relationships to "resell" merchant accounts to merchants. PayFac-as-a-Service has emerged from payment companies and independent sales organizations (ISO) that have gone through the regulatory compliance of PayFac registration. Even better? Funds are settled to the PayFac’s account and it’s determined by the PayFac to move those funds to the merchant. ISOs are an exceptionally important part of the payments ecosystem, serving a critical role that supports both their processing partners and their merchants. Since the start of COVID-19, Square has begun to hold back 20 to 30 percent of some of their client’s revenues for up to 4 months. The unique relationship PayFacs have with their merchants exposes them to more risk than your average ISO – even more than most wholesale ISOs – but, in return, PayFacs gain a lot of control over how they price and who they work with. What is a payment facilitator? A payment facilitator, also known as a “payfac” or payment aggregator, is a payment model that has grown tremendously over the past few years. The PayFac model has gained popularity in recent years, as it allows businesses to simplify their payment processing and reduce costs, while also providing a better customer experience. PayFac vs. Payment Facilitator vs ISO. The differences are subtle, but important. However, the setup process might be complex and time consuming. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. One is an ISO or independent sales organization, and another is a PayFac or payment facilitator. Under the PayFac model, each client is assigned a sub-merchant ID. The payment facilitator model was created by the card networks (i. It enters a contractual agreement with its customer, the PayFac, which is the master merchant. Fully managed payment operations, risk, and. Go female, it describes the daylight sensitivity of a digital camera or a chunks of film. For example, an. So, revenues of PayFac payment platforms remain high. When PayFac became a buzzword among software platforms and the many businesses trying to sell to them, the meaning of the word started to blur. Rather then setting up each of their clients with their own merchant account, the Payfac lets them piggyback on the Payfac’s account. They are agents of the banks and therefore only. What is a payment facilitator? History of payfacs How to bring payments in-house Traditional payfac solutions Getting started Set up payment systems Set up merchant onboarding. Classical payment aggregator model is more suitable when the merchant in question is either an. The submerchants and the PayFac enter into an agreement, and that agreement is not related to the PayFac’s agreement with the payment processing partner. However, they do not assume. The ISO acts as an intermediary between the merchant and the payment processor, taking care of merchant recruitment, sales, and ongoing merchant support, while the processor handles transactions behind the scenes. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Contracts ISOs and PayFacs sign different contracts with their clients. To fully understand the benefits of the payment facilitator model, it’s important to first take a look at what goes into creating a standard payment processing agreement. 1. The most known examples are website-building companies which can provide integrated payment options, meaning ecommerce customers will see their experience improved as they will no longer need to actively look for third-party payment solutions. PayFac-as-a-Service (PFAAS) combines easy-to-integrate payment technology, full-service offerings, and transparent pricing to deliver Independent Software Vendors a simple way to harness the full power of payment facilitation – minus. The arrangement made life easier for merchants, acquirers, and PayFacs alike. In this model, the issuer (having the relationship with the cardholder) and the acquirer (having the relationship with the Merchant) is the same entity. When you start accepting payments online, you need a merchant account from a payment facilitator with sufficient infrastructure and proper compliance to process payments . The most known examples are website-building companies which can provide integrated payment options, meaning ecommerce customers will see their experience improved as they will no longer need to actively look for third-party payment solutions. A payment facilitator (payfac) is a service provider for businesses that simplifies the merchant-account enrollment process. Merchants need to understand these differences, so they can decide which of these options may be better suited for their business. Industries. Payfac-as-a-service vs. However, the setup process might be complex and time consuming. If your sell rate is 2. Payment Facilitators contract directly with the sub-merchant for processing services and perform key payment activities in-house. A PayFac, or payment facilitator, was originally defined by Visa® and Mastercard® to describe the entity that is officially doing business with the card brands. Merchants get underwritten more efficiently, while acquirers are relieved of some merchant services, delegated to PayFacs for a reward. ” A PayFac can have a two-party agreement, meaning it enters into a direct contractual relationship with its merchants (with or without a. Independent sales organizations (ISOs) and payment facilitators (PayFacs) both act as intermediaries between merchants and payment processors, making them parallel channels in the overall payments ecosystem. Avoiding The ‘Knee Jerk’. A payment processor is a company that works with a merchant to facilitate. To put it another way, PIN input serves as an extra layer of protection. In the scenario of a SaaS company operating as a PayFac, you are the master merchant and your customers are the sub-merchants. There are DEF benefits to. This model is ideal for software providers looking to. Aug 10, 2023. With Visa, you’ll be applying to be a registered ISO, but with Mastercard, you’ll technically be applying to be a registered MSP, or member service provider. ”. To help us insure we adhere to various. Browse Payfac, SaaS and SaaS Payments content selected by the SaaS Brief community. Equip your business with the knowledge to choose the right payment strategy. implementation of a payment facilitator model) calls for getting certified as one by the respective acquirer, and for. However, the setup process might be complex and time consuming. “You’re giving the payment facilitator the rights to generate liability that you as the bank are going to be responsible for,” Spalinger said. Click to read more about what an ISO has both what it has to do for payment processing! Services. This means that there is no need for any charges between the issuer and the acquirer. The second type is a more modern, technology-first payfac solution from a commerce provider like Stripe. In this post, we break down the differences between a few of the most common routes you can take when it comes to integrated payment models: independent sales organization (ISO), full-fledged payment facilitator (PayFac), or PayFac-as-a-Service (PFaaS) models. Typically, the ISO stays out of the contract between the two and instead focuses on the relationship with the payment processor. facilitator is that the latter gives every merchant its own merchant ID within its system. NPC is Vantiv's nationwide ISO merchant distribution business serving over 220,000 small-to-medium-sized merchants. However, the setup process might be complex and time consuming. The enabler is essentially an acquirer in the traditional term. One of the key differences between PayFacs and ISO systems is the contractual agreement. Cancel reply. 0 vs. While there are many benefits of integrating to a Payfac, two of the most notable are frictionless onboarding and risk, liability and costs associated. A guide to marketplace payments. ISO vs. In short, Payment Facilitation is an operating model that affects the acquiring side of the payment ecosystem. In the world of payment processing, the turn of the decade represented a massive transition for the industry. The payment facilitator works directly with the. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. A merchant of record is an entity that accepts cardholders’ payments and assumes liability for processing of these payments on the merchant’s behalf. What is a payment facilitator (payfac)? What is an independent sales organization (ISO)? What are the differences between ISOs and payfacs? Do I need an ISO or a payfac? Is Stripe an ISO or a payfac? Payment Facilitator vs ISO. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. PayFac vs ISO: Weighing Your Payment Options . India’s leading payment gateway: Working with a full-service payment services provider,. Business Size & Growth. PayFac vs ISO: Key Differences. Integrated Payments 1. 4. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Software users can begin. Banks. 8–2% is typically reasonable. Jun 29, 2023. ISO vs. For their part, FIS reported net earnings of $4. El ISO se encarga de facilitar la relación entre las dos partes y de conseguir que los comerciantes contraten una cuenta de vendedor. FIS’ rival, Fiserv, acquired the remaining stake of Finxact for $650 million, while another company, Fintech Amount, bought Linear for $175 million. There are several ways for businesses to go about accepting payments, and two of the most popular provider options are PayFacs and Independent Sales Organizations (ISOs). Unlike PayFac technologies, ISO agreements must include a third-party bank to sponsor the contract. For example, an. Stax Payments is thrilled to announce the appointment of our new Chief Executive Officer, Paulette Rowe. See moreWhat is a payment facilitator (payfac)? What is an independent sales organization (ISO)? What are the differences between ISOs and payfacs? Do I need an. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. PayFac vs ISO. While an ISO product will sometimes take weeks to approve a merchant due to the more stringent and quite often paper-based application process, PayFacs are able to. An ISO, or independent sales organization, is a company that resells payment services to merchants on behalf of a payment processor or acquiring bank. If you are an existing Bambora customer who needs assistance there are our support guides that can be found here. Integrated Payments. What is a payment facilitator? A payment facilitator, also known as a “payfac” or payment aggregator, is a payment model that has grown tremendously over the past few years. The downside of this speed is the risk exposure in a breach; if a retail ISO is breached the acquirer steps in and shoulders most of the load. PayFac vs. Set up merchant management systems such as dashboards,A payment facilitator, also known as a “payfac” or payment aggregator, is a payment model that has grown tremendously over the past few years. The merchant interacts directly with the ISO and follows their set processes to register and become. Processor relationships. PayFac: How the Two Most Common Types of Payment Intermediaries Differ. Risk management. A PayFac works by establishing one master merchant account, which can then be leveraged by multiple businesses for a small fee. By owning these operational components,. • The acquirer has access to Payfac system to oversee their performance and compliance. Merchants get underwritten more efficiently, while acquirers are relieved of some merchant services, delegated to PayFacs for a reward. ISOs are sometimes compared to archaic human species becoming extinct and. Think off ISOs as official service providers on behalf of the cardmember. Reduced cost per application. Both PayFacs and ISO’s (independent sales organizations) act as intermediaries between merchants and payment processors . 5. The choice between a PayFac and a payment processor depends on your business needs, industry, and desired level of support. 2. To the extent that a Payment Facilitator wishes to identify and review every unmatched refund it has that capability. ISO. If you want to take a full revenue model opposed to a commission based model anyway. By viewing our content, you are accepting the use of cookies. As mentioned, the primary difference between payment facilitators & payment processors lies in how merchant accounts are organized. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. Stripe provides a way for you to whitelabel and embed payments and financial services in your software. The merchant provides a few basic details to their PayFac provider. While some software providers starting out as an ISO or referral partner may elect a managed payfac solution as the next logical tech enablement progression, other providers may not want to relinquish visibility and control to a third. S. Principal vs. PayFac vs. This model gives your users the ability to seamlessly accept payments directly from your platform and allows you to own and monetize the payments experience. Toward the middle person, ISO is the acronym used by the International Arrangement for Standards. What’s The Difference Between A PayFac vs ISO? Posted at 11:39 am in Fundraising, Payment Processing. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. As such, read on to discover how the PayFac model works, how to get the best out of it, and how your company can become a payment facilitator. This relatively new payfac business model is experiencing rapid growth. PayFac-as-a-service delivers a competitive payment program with instant onboarding of merchants while creating a seamless customer experience. Payfac: A payfac operates under a master merchant account, and creates subaccounts for each business it services. An ISO works as the Agent of the PSP. Our payment-specific solutions allow businesses of all sizes to. One of the most significant differences between Payfacs and ISOs is the flow of funds. Payment Processors are responsible for authorization, authentication, data security, settlement, clearing, and reporting services, while ISOs focus on sales, marketing, merchant support, customer service, and value-added services. Onboarding workflow. An ISO or acquirer processes payments on behalf of its clients that are call merchants. In recent years payment facilitator concept has been rapidly gaining popularity. ISOs. Principal vs. You own the payment experience and are responsible for building out your sub-merchant’s experience. But to financial and merchants it means something high different. subscribing, and for some of these “old heads” (I’m in that group…. However, the setup process might be complex and time consuming. 00 Payment processor/ merchant acquirer Receives: $98. An ISO (Independent Sales Organization) is similar to a PayFac in a lot of ways. June 14, 2023 PayFac Vs. Supports multiple sales channels. Generally, a PayFac is a good fit for businesses that process less than $1 million in payment volume annually, while an ISO is well-suited for larger businesses that process more than this. It’s more PayFac versus wholesale ISO model or full liability ISO. PayFac vs ISO: Contractual Process. 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. They typically work with a variety of acquiring banks, using those relationships to "resell" merchant accounts to merchants. This site uses cookies to improve your experience. MSP = Member Service Provider. I/C Plus 0. Top content on Payfac, SaaS and SaaS Payments as selected by the SaaS Brief community. What’s the Difference? Before payment facilitators began enabling smaller merchants to accept payments, acquiring banks relied on another. The underlying role that these fill for a business is to provide merchant services, and you can read our reviews of various merchant service providers here. PayFac vs ISO: Contractual Process. Delve deeper into. While the PayFac model comes with some unique risks, the benefits of additional control and potentially higher margins have seen its popularity grow among two major categories of operators: traditional acquirers and independent software vendors. Processor relationships. Once upon a time, cash where king, but includes today’s direct world, elektronic transactions have usurped the toilet. Payment Facilitators are 100% responsible for PCI Compliance, risk underwriting, funding and providing payment support. Payfac conducts oversight on all the transactions on its platform to ensure that all payments operate under legal and network regulations. Payment Facilitation as a Service, also known as PayFac as a Service or PFaaS, allows software platforms and SaaS providers the ability to act as a merchant account for their end users. responsible for moving the client’s money. The ISVs that look at the long. In order to understand how. Payfac is the abbreviated term often used in the payments industry to describe a company that provides payment processing services to. In a similar manner, they offer merchants services to help make the selling process much more manageable. This solution includes hosted payment pages; one-time, subscription, and one-click billing solutions; risk management; affiliate tools, and end-user customer support. So naturally, any company considering the option needs to make sure the investment they’ll make in the Payfac model makes sense financially. Payfac solutions can be a critical source of revenue generation, allowing ISVs to differentiate their product and service offerings in a crowded space. You must be logged in to post a comment. Ongoing Costs for Payment Facilitators. So, the main difference between both of these is how the merchant accounts are structured and organized. However, the setup process might be complex and time consuming. An ISO (Independent Sales Organization) is similar to a PayFac in a lot of ways. PayFacs perform a wider range of tasks than ISOs. Payment Processors: 6 Key Differences. ”. In almost every case the Payments are sent to the Merchant directly from the PSP. Click the read show about what an ISO is and what it has until do including payments processing!. For example, an. Swipesum details all you need till get about Payfac vs ISO. If your rev share is 60% you can calculate potential income. You own the payment experience and are responsible for building out your sub-merchant’s experience. In contrast, PayFacs have one or two processor relationships and onboard ISVs as referral agents. You see. The merchants can then register under this merchant account as the sub-merchants. Payment Facilitator vs Payment Processor. It provides a technology, allowing to authorize transactions and, potentially, receive transaction settlement information. A Payment Facilitator or Payfac is a service provider for merchants. Merchants possess lang verstehen how. However, much of their functionality and procedures are very different due to their structure. For example, an. For example, if you’re selling in-store, then your ISO should offer you a point of sale software and. Otherwise, you can use an independent sales organization (ISO), which allows for higher volume but can create delays in transaction times. When accepting payments online, companies generate payments from their customer’s debit and credit cards. If you need to contact us you can by email: support. In fact, they broke the mold when they offered Toast a payfac at $0. Blog. A recent Nilson report found that fraud rose more than 6% (exceeding $10 billion) in 2020 from 2019, with the U. GETTRX’s Zero and Flat Rate packages offer transparent billing, competitive rates, and industry-leading customer service, making them ideal choices for businesses seeking a seamless payment experience. Toward the average human, ISO is the acronym employed by the Global Organization for Standards. It’s where the funds land after a completed transaction. For example, an artisan. Technology has fundamentally changed how businesses, acquiring banks, and card networks work together. Payfac Pitfalls and How to Avoid Them. But no matter the vertical, the build versus buy question — that perennial. Let us take a quick look at them. Top content on Payfac and Payments as selected by the SaaS Brief community. ISO vs. The Traditional Merchant Onboarding Process vs. Payfac: A payfac operates under a master merchant account and creates subaccounts for each business it services. ISOs and ISVs are both B2B providers, working with merchants and the companies who serve them. They are typically small businesses that work with a limited number of banks. Extensive. On. 1. Now let’s dig a little more into the details. An ISV can choose to become a payment facilitator and take charge of the payment experience. The PayFac model is also very attractive to independent software vendors. PayFac vs ISO. By setting up its own merchant account via an ISO, the retailer can negotiate specific terms and rates, potentially saving money in the long run. Acquiring banks willingly delegated them to payment facilitators in exchange for part of liabilities and residual revenues.