What is a Payment Facilitator and How To Become One

The global COVID-19 pandemic has increased the number of online activities, including online transactions all around the world. This means there are also many businesses (new   fvcor established alike) that are looking for ways to start receiving online credit card payments, and this is where a payment facilitator company comes in. 

A payment facilitator, in a nutshell, is a business that facilitates other companies to start accepting online payments. However, to really explain what a payment facilitator is, we have to also discuss the concept of how businesses can start accepting online payments and how the payment facilitation model can benefit businesses looking to start accepting online payments. 

What is a Payment Facilitator: The Payment Facilitation Model

A payment facilitator business answers a clear problem of how it was challenging and time-consuming for businesses to accept online credit card payments in the past. 

Traditionally, without the help of a payment facilitator company, a business that wants to start accepting online credit card transactions will need to approach an acquiring bank (or merchant acquirer), a bank or bank-sponsored organization that can acquire and process credit card payments, and apply itself as a merchant.

The thing is, getting approved by a merchant acquirer will typically involve a time-consuming and rigorous underwriting process, and even after all the paperwork, you won’t be automatically approved. The underwriting process itself can take days and even weeks, potentially preventing the applying business from starting its operations.

This is where a payment facilitator business comes in.

In a payment facilitator model, the payment facilitator business has been approved as a merchant by the acquiring bank and has the right to share its merchant ID (MID) with other businesses as sub-merchants. By sharing the merchant ID, the payment facilitator facilitates the sub-merchants to start accepting online credit card payments. 

The sub-merchant no longer needs to undergo the lengthy underwriting process with the merchant acquirer and only requires a relatively simple and faster underwriting process with the payment facilitator. 

How Payment Facilitators Help Businesses Accept Credit Card Payments

The payment facilitation model significantly streamlines the process of accepting online payments. If in the traditional model the process can be very time-consuming without any guarantee of approval, a payment facilitation model allows businesses to start accepting online payments in just five fairly simple steps: 

  1. A business signs up for an account on a payment facilitator’s website or application.
  2. To sign up for an account, the business (sub-merchant applicant) will need to provide basic business information (business name, address, phone number) and sometimes a basic financial statement. 
  3. The payment facilitator will validate the information submitted by the applicant to assess whether the business is viable for its service. Typically the payment facilitator will use an automated underwriting tool to make this process quicker and more accurate, although in some cases, manual reviews may be performed.
  4. Based on the assessment, the payment facilitator will either approve or decline the application. 
  5. If it’s approved, the business is now onboarded as a sub-merchant under the payment facilitator’s sub-merchant ID.

Becoming a Payment Facilitator: Why It Pays

Not only becoming a payment facilitator is a lucrative business opportunity due to the increased demands in recent years, but there are also some unique benefits of starting a payment facilitator business, including but not limited to: 

  • Predictable source of revenue: a typical business model adopted by payment facilitators is to take a percentage of each transaction received by each sub-merchant (2.5% of each transaction on average). This will provide a stable and predictable source of income for the payment facilitator.
  • Low processing cost: a key advantage of the payment facilitator model is the ability to onboard a large number of sub-merchants, which will translate into a larger transaction volume and lower processing costs.
  • Easier control and monitoring: a payment facilitator can develop its own policies when onboarding sub-merchants, allowing them to have total control of the sub-merchants and the underwriting process from start to finish.

Simply put, a payment facilitator business is a relatively low-risk business venture with a high profits potential.

How to Become a Payment Facilitator

To start a payment facilitator business, a company must first be approved by a merchant acquirer to get a Payment Facilitator ID (ID). 

Unfortunately, but probably expected, the underwriting process of getting this PFID is much more complex (and can be more time-consuming) than the process of getting a standard merchant ID, including but not limited to:

The challenge doesn’t stop there; even after you’ve been approved for a PFID, your business will be under consistent monitoring and will need to undergo a regular audit, and you may lose the payment facilitator ID any time you’re below the merchant acquirer’s standard. 

This is where a professional payfac services can help both in the approval process and maintain compliance, providing your business with the following benefit: 

  • Ensure 100% approval rate

RPY Innovations, for example, offers a 100% approval rate for your Payment Facilitator ID. The payment consultant will walk hand-in-hand with your business when undergoing the detailed audits and lengthy underwriting process of becoming a payment facilitator.

  • Preparing your team

To become a successful payment facilitator and to stay compliant with relevant regulations, you’ll need a team capable of performing standard payment facilitator practices while addressing applicable regulations. RPY Innovations can help conduct regular training for both your existing and future teams.

  • Preparing infrastructure and policies

To be approved as a payment facilitator, your business is required to establish the right infrastructure, including a wide variety of company-wide policies, to ensure compliance with the merchant acquirer and the credit card network. RPY Innovations can help you establish all the required policies and procedures to prepare your business as a payment facilitator.


A payment facilitator facilitates other businesses so they can quickly and easily start accepting online credit card payments. With the rise of eCommerce businesses and online shopping in recent years, the demand for payment facilitation has also increased, making it a lucrative business opportunity in 2022 and onwards.

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