Take a look at the graphic below. Within the industry, this is called the payments stack. Here at Finix, we call it the “payments layer cake.” Each layer represents a specific kind of financial institution that must interact with the other layers for every transaction to make it from the cardholder (the consumer) to the merchant (the business). All of the layers operate around the card networks, which sit in the middle of this complex stack.

There are four major card networks in the U.S.—Visa, Mastercard, American Express, and Discover—often referred to as “the brands.” These organizations don’t lend money to consumers or work directly with merchants. Instead, they maintain a global payment infrastructure and set interchange rates that impact how much you pay to accept credit card payments.

In every layer of the payments layer cake, card networks have some influence. Card networks have the important task of setting the interchange fees that merchants are charged to accept credit cards. They do not set cardholder fees like interest rates, however. Those fees are set by issuing banks.

Issuing Banks

While most people likely understand the concept of a bank, an issuing bank is a specific kind of bank which has the privilege of issuing cards to consumers on behalf of card networks like Visa and Mastercard. Why is this important?

Aside from the fact that we all use our cards to pay for almost everything online and increasingly in-person, card-issuing banks own valuable consumer relationships, are liable for purchases made by consumers, and are responsible for transferring funds to acquiring banks. They are the banks that hold checking and savings accounts, issue credit and debit cards that can be used on the card networks, and lend credit. Issuing banks have a profitable business model because they earn revenue based on consumer behavior and spending.

Issuing Processors

Sitting directly on top of issuing banks are issuer processors, not to be confused with payment processors. Unless you work in financial services, you’ve probably never heard of issuer processors like TSYS, FIS, and, more recently, Galileo. These organizations work with the layers directly above and below them, namely the card networks and issuing banks, to approve or decline transactions in real-time.

Acquiring Banks

The layers on the merchant side of the payments infrastructure are collectively called the “merchant acquiring” stack. In the most basic terms, the word acquire means to get. So for financial services, this side of the stack gets or receives information from the issuing side about transactions and cardholder account holders during authorizations and payment processing. Acquiring banks also receive funds from the issuing banks after a transaction has occurred and make them available to the merchant; this is the merchant’s bank.

Payment Processors

Processors are the secondary powerhouses of payments infrastructure as we know it. They have the authority to manage a lot of the heavy-lifting associated with processing your payments; that’s why they’re called processors. They primarily process transactions but have also been empowered by acquiring banks to underwrite merchants, manage disputes, and make payouts to merchants.

Acquiring Processors

Processors are the engines of the acquiring side. They move transaction data between card networks, issuing banks, and acquiring banks. They’re also often responsible for underwriting, dispute management, and making payouts to merchants.

Payment Facilitators

At the top of the cake are payment facilitators (PayFacs)—The PayFac model enables platforms, SaaS companies, and marketplaces to embed payments directly into their products. Instead of relying on traditional ISOs or third-party providers, these businesses can control onboarding, processing, disputes, and payouts for their sub-merchants.

Finix began as a PayFac, offering a modern, tech-first platform that made it easy for platforms and vertical SaaS companies to embed payments and manage the full transaction lifecycle. We helped our customers launch payments under their own brand—without needing to build or maintain complex infrastructure.

In 2023, Finix evolved even further. As a fully registered payment processor, Finix now connects directly to merchants—eliminating the need for a separate PayFac entirely. Our processor-to-merchant approach gives you the same benefits of the PayFac model fast onboarding, no-code tools, full-stack control, a powerful dashboard, and real-time reporting without the regulatory complexity or middlemen.

By working with Finix, you can:

• Onboard merchants in minutes, not days

• Simplify operations by removing unnecessary third-party providers

• Capture more revenue with every transaction

• Deliver a seamless, branded payment experience your customers trust

Whether you're a SaaS platform, marketplace, or direct merchant with complex payment needs, Finix gives you everything you need to build, operate, and scale your own payments stack, backed by the same infrastructure we originally built for PayFacs.

Let’s bring this to life with an example:

You just completed a $50 ride share trip. The ride share platform (acting as a PayFac) tells its acquiring processor to charge your Visa card. The processor checks with your bank (via an issuer processor) to ensure the card is valid and has funds. The issuer approves the transaction in seconds. The next day, the acquiring bank deposits the funds into the platform’s account, which then routes payment to the driver—minus platform fees.

Businesses no longer need to outsource or settle for cookie-cutter payment solutions. More platforms are unbundling the traditional payments stack to own and optimize every layer. Finix empowers you to do the same.

By simplifying payment infrastructure and providing greater control, Finix helps platforms and merchants unlock more revenue, improve user experiences, and grow faster. Whether you're a direct merchant or software platform, Finix gives you the flexibility to scale payments on your terms.

Want to learn more? Let’s connect.