The 2019 payments landscape has inherent risks for any SaaS applications.

For example, imagine you are a business owner with 500 customers that you bill $100 per month on a recurring basis. Your business runs and plans based on $50,000 per month coming in the door on a regular basis. It took a long time and a lot of work to get to the point where your business generates that amount of reliable predictable income. You pay salaries, rent, handle plan development, and manage marketing campaigns ALL around that recurring revenue.

SMS Payment Provider | Pay by Text Provider 2019

Looking to leverage or provide MarketPlace Payments? What you must know

MarketPlace Payment Solutions

The role of the Payment Gateway for MarketPlace Payments

When evaluating technical payment solutions that address the primary needs of a MarketPlace Payment solution the integration to the Payment Gateway plays a vital role in the MarketPlace success. For platforms considering launching or monetizing their MarketPlace payments play a vital role in both the success [or failure] of the platform as well as a primary revenue driver6.

The decision to become a Payment Aggregator or Payment Facilitator (Payfac) has massive implications for a SaaS application provider.

Payment facilitation is the process by which one entity, a master merchant, processes or facilitates payments on behalf of a base of sub merchants.

For the SaaS provider, the potential advantages of becoming a Payment Aggregator can be compelling. The Payment Aggregator model can seem very attractive, both for ease of onboarding and potential revenue generation.

Becoming a Payment Facilitator, Payment Service Provider [PSP] or Payment Aggregator. Being a Payment Facilitator can be thought of as being a Master Merchant, facilitating credit and debit card transactions for sub-merchants within your payment ecosystem. Becoming a PSP (also known as PayFac) lends itself well to some businesses that fall into the software provider classification. However, with the many advantages come some unique challenges. We’ll discuss both in this article.

For a business owner, selecting the best and most cost-effective method of accepting customer payments can be confusing and overwhelming, particularly as the range of payment options continues to grow.

A payment aggregation solution offers a platform the ability to act as a master merchant and instantly onboard application sub-users. These users can complete a simple form and in minutes begin accepting payments.

Payment aggregation or payment facilitation allows one entity, or master merchant, to process or facilitate payments on behalf of sub merchants.

For the SaaS provider, potential advantages in becoming a Payment Facilitator (aka Payment Aggregation) are compelling: payment facilitation drives ease of client onboarding and unlocks a new stream of revenue generation.

Payment facilitation, or operating as a “PayFac” allows a SaaS company to act as a master merchant for its client base. The SaaS provider onboards clients via a non-intrusive application process -- making it simple for the user base to quickly begin accepting customer payments by credit card or ACH Payments [some providers offer].

An interview with MyEvent.com. Early adopters of the PayFac business model MyEvent.com has successfully implemented payment facilitation and used it to grow their business and acquire new clients.

Payment facilitation, or PayFac allows a SaaS company to act as a master merchant for its client base. The SaaS provider onboards clients via a non-intrusive application process -- making it simple for the user base to quickly begin accepting customer payments by credit card.

So you want to be a PayFac? The 1 question you must answer

We get frequent inquiries from SaaS platforms and start ups about becoming a PayFac or Payment Facilitator.

If you’ve considered becoming a Payment Facilitator (PayFac) for your SaaS customer base, you’re familiar with the term “KYC,” or Know Your Customer. As the payment processing industry continues its trend of explosive growth, however, KYC might be more accurately termed “CYA.”

Steps to becoming a Payment Facilitator are outlined below.

EXECUTIVE SUMMARY

SaaS platforms and Software vendors have a unique opportunity. Whether you already offer some type of payment collectionoption or have an application that has the potential to leverage payments there has never been a better time to explore your options.

Payment facilitation or payment aggregation allows one entity, the master merchant, to process or facilitate payments for a base of sub-merchants. For SaaS providers these are typically application end users or customers.

Payment Facilitator Companies

A Payment Facilitator takes on the role of the  Master Merchant. The primary benefit to becoming a Payment Facilitator is that you can quickly and easily enroll your app users and enable processing of  credit, debit card and in some case ACH transactions .

As an example: A SaaS offers an invoicing solution eg QBooks. Businesses that want to leverage their invoicing solution complete a simple application and 15 minutes or so later they are approved and set up to accept customer payment. For our example let’s say the business name is “Best Landscapers”.  They applied and are now approved and ready to bill/invoice there customers using the QBooks platform.