The future of payment facilitation: The rise of PayFac as a Service

The payments industry has been undergoing a significant transformation with the emergence of payment facilitation as a service, also called PayFac as a Service or PFaaS. This white paper explores how PFaaS is reshaping the payments landscape, offering new opportunities for acquirers, payment facilitators and independent software vendors, or ISVs. 

PFaaS platforms are not just a trend but a fundamental shift in how the payment industry operates. They push traditional payment processors to innovate, enhance the merchant experience and empower ISVs to become key players in the payment ecosystem. As the technology matures and adoption increases, PFaaS is poised to play a central role in shaping the future of digital payments and embedded finance.

Among the key findings of the white paper:

• PFaaS simplifies the complex process of becoming a PayFac, allowing ISVs to quickly and cost-effectively offer integrated payment solutions.

• This approach can collapse the time to market for new PayFacs from months to weeks and significantly reduce merchant onboarding time from weeks to minutes, enhancing user experience and accelerating platform time-to-revenue.

• The market for PFaaS is growing rapidly, with several key players emerging and offering increasingly sophisticated solutions.

• PFaaS platforms include capabilities to handle the regulatory compliance and risk management burden, lowering the risk for new PayFacs and their sponsor acquirers.

• The future for PFaaS looks promising, with predictions of continued growth of the PayFac model, hundreds of new PayFac formations a quarter, their expansion into new verticals, and further innovation in risk assessment and fraud prevention.