Glossary
Payment facilitator (PayFac)
A payment facilitator, PayFac, is a company that holds a merchant agreement with an acquirer and onboards other businesses, its sub-merchants, under it: it signs them up, screens them, accepts payments for them through its account and pays them out, taking a fee. The acquirer sees one merchant with many sub-merchants; the card schemes require the facilitator to register, to apply their onboarding and monitoring rules to sub-merchants and to carry their chargebacks and fines.
PayFac, PSP, marketplace
A PSP with its own licence contracts with merchants directly and routes to several acquirers; a payment facilitator rides on one acquirer’s licence and agreement, which makes onboarding fast and the facilitator liable. A marketplace that collects for its sellers is a payment facilitator in the schemes’ eyes unless it uses one and leaves collection to it. Above a volume threshold the schemes require a sub-merchant to sign its own merchant agreement.
What a facilitator must run
Know-your-business checks on every sub-merchant, risk categories and limits, monitoring of chargebacks and fraud per sub-merchant, a ledger per sub-merchant, payouts on a schedule, the schemes’ registration and reporting, and in many jurisdictions a licence or registration of its own for holding the sub-merchants’ money.
On the platform
Tranzify gives a facilitator onboarding with KYB documents and statuses per merchant, limits and fees per merchant, a ledger balance and payouts per merchant, chargebacks per merchant in the reports and a journal of every payment; the facilitator’s own licence or sponsor decides what it may hold.
Updated: 2026-11-08