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Use cases

Payment Facilitator

Whether you have a brick-and-mortar business, serve people online or both, payment options can make or break your business. When people have more options to complete a purchase, the likelihood is higher they will follow through. The same is true of creating flexible payment options for invoices and debt. Your payment facilitator will have the greatest influence on the options you can provide.

What Are Payment Facilitation Services?

Payment facilitator services simplify options for processing payments. Most PayFac companies focus on electronic payments, but some have even facilitated options for accepting checks and cash during online purchases.

This new form of payment processing eliminates the need for small business owners to establish merchant accounts. Instead, the payment facilitator establishes a master merchant account. As long as it meets PayFac requirements, it can generate revenue by processing payments, for a small fee, on behalf of business owners.

What Are the Main Components of Payment Facilitation?

When business owners choose payment processing companies, they become one of three main agents in the payment facilitation process. Consider the roles of each one:

  • Acquirer: This is the company providing the infrastructure for payment services via merchant accounts. It handles payment technology integration and monitors the compliance status of the master merchant with payment facilitator rules.
  • Facilitator: This is the software provider creating a master merchant account it can share with others. It serves as the liaison between the acquirer and the sub-merchant. It also monitors transactions from sub-merchants to identify suspicious activity.
  • Sub-Merchant: This is the small business owners using the facilitator’s services to process payments for their companies.

How Do Business Owners Sign Up for Payment Facilitation?

Signing up to use payment facilitation services is fairly easy. It generally takes only a few minutes, and you can complete the entire process online. Sometimes approval is immediate; otherwise, it might take a few hours to a few days. Once approved, you can begin processing payments.

You’ll provide basic information regarding your business, tax information and the bank account you want funds transferred. Some providers also offer different packages, or they charge based on the number of transactions, so consider this when making a final decision.

How Can Small Business Owners Choose the Right Facilitator?

The choice you make will drive customer experience. It might also determine how confident they feel shopping via your app or website. Consider these factors when deciding:

  • Reputation: You can find information about almost any company online. Check their reviews from customers, who will be other business owners like you. It’s also worth checking Glassdoor to see what employees have to say about working at the company.
  • Reliability: When checking the reviews, determine reliability. Do the company’s servers go down frequently? Do customers report issues making payments? You want a facilitator that will reduce payment friction as much as possible, so this is crucial.
  • Technology: Can you complete the application painlessly online? How long does the company take to deliver a response? Is the platform user-friendly? Technology is rapidly changing, and you need a company that’s ahead of the pack or, at least keeping up with the pace.

How Does Payment Facilitation Affect Accounts Receivables?

Providing reliable and flexible payment options makes it easier and more convenient to accept payments from your customers. Online options also eliminate the need for them to make a trip to your business, which also reduces payment friction.

Improve your accounts receivables performance even more by working with top-tier collections software. At Gaviti, we help our clients streamline communications, automate A/R tasks and optimize processes. Why take our word for it?

Book your free demo today.

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