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Payment Facilitation

Getting Started with Payment Facilitation

Payment facilitation is having a moment right now, and rightfully so. Payment facilitation is the model by which growing software companies are increasingly owning, managing, and, most importantly, monetizing their payments. By removing the reliance on 3rd party payment service providers, high-transaction volume software organizations and Independent Software Vendors (ISVs) are reaping considerable gains by cutting out the middleman and taking home a higher percentage of each transaction.

For companies considering making the switch and taking on the task of bringing payments in house, there are several factors to review. Below we've covered the top considerations you'll want to discuss with your team to figure out when payment facilitation is right for you. If, after reading this article you still have questions that we haven't covered here for your specific business vertical or model, please do get in touch with a member of our team, and we'd be more than happy to have a chat!

Here are the primary considerations you'll want to review in preparation for becoming a payment facilitator.

Product Goals

Ultimately, your product roadmap (which includes payments, of course) should play a crucial role in your decision to become a payment facilitator. The way the world shops and pays continues to transform at a rapid pace, as consumers expect and demand more from their software. We believe in a world where every software company serves its customer base with forward-thoughtfulness and innovation. So the question is not if you should become a payment facilitator but when. Payment facilitation allows you to:

  • Add a new revenue stream - Growth is a good thing, and shouldn't cost you more money. Owning your payments means you transition your payments from a cost center to a profit center.

  • Build superior product experiences - You've worked hard to earn the trust of your merchants. With embedded payments, you can build a product that serves the specific needs of your vertical and customers.

  • Increase market share - Organizations that are serious about growth are making informed decisions now about how to retain customers and increase sales well into the future.


Payment facilitators operate as mini-processors and can process transactions, underwrite sub-merchants, manage disputes, and make payouts to sub-merchants. Because of those privileges, they're required to meet industry compliance standards. Maintaining an ongoing compliance program requires a dedicated task force committed to the three main areas of compliance adherence -- Payment Card Industry - Data Security Standards (PCI-DSS), Know Your Customer (KYC), and Anti-Money Laundering (AML) programs. We've written in more detail about the core components of managing compliance. Still, an important point to decide during the consideration phase of becoming a payment facilitator is if your team can devote the resources required to hiring and training compliance professionals or whether you will need a solution that provides some level of managed PCI. Using the Finix gateway/vault significantly reduces this PCI burden.

A Payment Facilitation Agreement

To become a Payment Facilitator, you need an agreement from a payment processor to explicitly grant your organization permission to be a registered payment facilitator. What's an example of a payment processor? Worldpay from FIS, for instance, is a processor that your organization could apply with to become a payment facilitator. Here at Finix, our clients receive guidance from our professional services team every step of the way to ensure thorough applications and timely updates on the status of your agreement application.

Sub-Merchant Agreement

Payment facilitators own the majority of risk for their sub-merchants if the sub-merchant becomes insolvent. That's right; payment facilitation is the big leagues of payments. The sub-merchant agreement is essentially a contract that compels merchants to be responsible for discrepancies that may arise when processing payments. But it's not as daunting as it sounds. In this agreement, make sure to cover all of the use cases -- chargebacks, fees, settlements, card acceptance, etc. Every sub-merchant onboarded to your platform to process payments will need to sign this, so make sure your sub-merchant agreement is detailed enough to cover all of the worst-case scenarios. If you need help reviewing your existing sub-merchant agreements or aren't sure where to start, the Finix team is available for support.


Underwriting helps to assess merchant risk and is a core responsibility of payment facilitators. To underwrite merchants, providers must review a merchant’s industry type, business history, and financial stability. Some industries are known to carry more risk and therefore require additional underwriting documentation. A merchant is also expected to submit bank and credit statements as well as credit history to determine chargeback history.


To process payments on behalf of merchants, you have to integrate your software directly into a processor (up top, we used Worldpay as our example). Even with a highly experienced payments engineering team, the integration process could take between 12-18 months, maybe longer. Here at Finix, we've drastically reduced the time and cost required to get up and running as a payment facilitator, making payment facilitation accessible to more organizations. Our payment facilitation products, both our enterprise offering and Flex, have taken what historically required many months of build and implementation time and made becoming a payment facilitator possible in a fraction of the time with reduced cost.

Internal Resources

Is your team prepared to manage payments? This is a critical consideration in determining your organization's readiness for owning your payments experience. Many of the most well-known and respected software providers like Uber, Toast, MindBody, and AirBnB have expansive payments engineering teams devoted to ensuring seamless payments experiences for their merchants' end-users. Many of our customers cite the importance of having dedicated teams to help with implementation and ongoing maintenance. For customers who are smaller in size, but still looking to start earning on their payments now, Flex offers a managed, integrated alternative.

As the self-proclaimed payments facilitation people, we think owning your payments makes sense for companies of all shapes and sizes. Our enterprise offering is likely the best fit for larger clients who already have internal resources dedicated to managing and monetizing payments. For organizations making a bet on the future of software requiring a payments component, our newest integrated payments product, Flex would be our recommendation of choice. Get in touch with a member of our team to figure out the best option for you.

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There’s a lot to learn about payment processing. Get all the information you need to make thoughtful decisions about your payments strategy.