Agile Payments Blog

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Looking to become a Payment Facilitator as an SaaS application?

Mar 18, 2019 12:34:00 PM

Steps to becoming a Payment Facilitator are outlined below.

First it’s important to ask why?

The potential for revenue and being able to onboard clients is very attractive but there are many questions that must be addressed in order to embark on the path to becoming a Payment Facilitator.payment facilitator

The vast majority of platforms that aspire to become a true payment facilitator  | PayFac or aggregator aren’t good fits for MANY reasons.

You will need:

  • Money. You can easily spend $50k+ [easy to spend >100k]
  • Payments understanding and especially risk mitigation. Check out What can go wrong with Payment Aggregation? for more info.
  • Resources to devote to ongoing compliance and risk [both staff and $]
  • User base that has the potential to generate enough transactional revenue to offset costs. Without this forget everything else. You make money from processing fees [ margin between costs and sell rate]. You NEED lots of transactions!

Check out “5 Things You Must Have to Become a Payment Facilitator | Aggregator”

So how do you become a Payment Facilitator or PayFac?

  • Register w/Sponsor Bank
  • Approval by Sponsor Bank
  • Connect with Technology platform. Integrate via API
  • Sponsor bank issues PayFac / aggregation credentials
  • Go to market
  • Refine

 The registration/approval process can consist of:

1- Agent Application (principals representing at least 80% of total ownership must sign)

2- Agent Agreement (3 originals copies signed by the Agent and Sponsored Entity)

3- Underwriting and Business/Principal Validation Write-up)

Payment Aggregation - PayFac

4- Business Plan/Description (including business history, investor info, volume projections)

5- Articles of Incorporation or Partnership Agreements

6- Evidence (Government-Issued Documentation) of all DBA Names Listed

7- Business Financials (2 years)  Financial Statements (including P&L, balance sheet and interim)  Start-up: Submit financial projections and opening balance sheet

8- Business Tax Returns (2 years)  

9- Bank Statements (3 months)  

10- Dun & Bradstreet (D&B) Report (when available)  

11- Copy of Driver’s License(s) for all principals with at least 25% ownership and all signers  

12- Resume/Bio for all principals with at least 25% ownership

13- Resumes/work histories for staff in the credit

This process can take 6+ months or more depending on your back end provider. We have had clients complete this process in less than a month. It varies based on many factors.

To get a more comprehensive overview of Payment Facilitation and more importantly to decide if it might be right for you take a look at- Payment Facilitation | Aggregation

Hybrid Payment Aggregation or even a Payment Partnership may be better fits especially if your app does not have the “gravity” needed for true aggregation.

Again MOST platforms aren’t ready for true payment facilitation BUT you can get most of the benefits without the cumbersome drawbacks if you find the right partner. Good luck.

Topics: payfac

Wayne Akey
Written by Wayne Akey

Wayne Akey works collaboratively with SAAS providers whose clients have recurring billing needs to create innovative payment solutions and new revenue streams. He has partnered with dozens of software providers to create integrated payment solutions that solve recurring billing problems and generate significant recurring revenue. He has experience in: ACH Processing | Payment Partnerships | Payment Gateway Integration | Credit Card Decline Mitigation | Payment Aggregation. Wayne is the author of “Explode SAAS Revenue by 84%: A Guide to Geometric Growth using Integrated Payment Processing”. To learn how your software application can become a billing solution for your users as well as generate additional revenue streams, contact Wayne today at We guarantee you will learn how to improve revenue per client by at least 10% or we will donate $500 to the charity of your choice.

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