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Is Becoming A PayFac The Right Fit For ISVs?

Source: Paragon Payment Solutions
Field Service Partner Management

A Guide for Software Providers Considering the Payment Facilitator Model

Established independent software vendors (ISVs) with mature payments programs and newer entrants in the specialty software space who are looking to improve all or some aspects of their integrated payment programs are examining their program structures (often with encouragement of their payment processing partners) to find the best fit for their business and for their own customers.

There are a number of options – traditional referral relationships, becoming an agent or independent sales organization (ISO), advance residual buyouts, and variations of each. Increasingly, a number of ISVs are contemplating becoming a payment facilitator (PayFac – also known as a merchant aggregator).  

The PayFac model is appealing to these ISVs because it ostensibly gives them more control, eases client onboarding, and can potentially boost profits. But becoming a PayFac also requires the ISV to accept higher levels of cost and liability and is certainly not the best solution in all circumstances