Being a Payment Facilitator (PayFac) is already a lucrative business model within the payments landscape, but getting your own card scheme membership can have a hugely transformative impact on your operation.
Becoming a member of a card scheme such as Visa, Mastercard, or Discover is how a PayFac makes the leap to becoming a fully-fledged Acquirer. This cements your position within the flow of funds, allowing merchants to accept card payments directly from you, instead of a third-party provider.
As we’re here to demonstrate, there are several key reasons as to why this can be an extremely beneficial move.
Significant Revenue Growth
As a PayFac and a Payments Institution (PI) licence holder, you’re already able to temporarily hold and generate interest on client funds, but a portion of your revenue is spent on the cost of doing business with Acquirers.
By becoming an Acquirer yourself via card scheme memberships, you can free your business from the shackles of these costs and grow your revenue significantly.
Expansion Opportunities
Many small and medium-sized merchants lack the resources or expertise necessary to manage their own payment processing systems. That’s why they use your services as a PayFac and likely already make up much of your portfolio.
Securing card scheme membership creates opportunities to pursue larger clients who deal with Acquirers directly, while still maintaining your pre-established relationship with your existing clients.
What’s more, any value-added services you currently offer as a PayFac – such as analytics, website support, or networking opportunities – will already differentiate you from other Acquirers.
Greater Control, Better Merchant Protection
You’ve already done most of the hard work by building up a portfolio of merchants under your management, but it’s Acquirers who ultimately have control over your merchant’s payments. Maintaining operational resiliency is one of your chief responsibilities as a financial licence holder, but to an extent it’s out of your hands when you’re beholden to a third-party Acquirer.
If your Acquirer has a change of risk appetite, it can put your PayFac in jeopardy. Acquirers might terminate a merchant’s account for any number of reasons, whether they’re classed as a financial or reputational risk, or simply for coming out on the wrong side of their cost-benefit analysis.
There’s little protection you can offer a merchant in this position as a PayFac, but as the Acquirer you can give your clients that all-important security as well as controlling the payment process more directly.
How We Can Help
When it comes to card schemes, the more the better. That way, your merchants’ customers have more ways to pay. Remove those barriers to entry, and more transactions – and revenue – will follow.
There’s no need to worry about investing large sums in developing your own payment processor to connect with card scheme platforms. There are plenty of reliable third-party payment processors and AuthoriPay can assist you in finding the right processor to suit your business needs.
AuthoriPay have expertly guided countless businesses through this process as quickly and smoothly as possible, connecting them with major schemes including Visa, Mastercard, Discover, Union Pay International, and more.
Recent Comments