The PayFac Advantage for Startups, Marketplaces and Platforms
Startups, marketplaces, and SaaS platforms are built to move fast, but payments, compliance, and merchant onboarding often slow everything down. Managing multiple sellers, navigating financial regulations, and ensuring reliable payouts can quickly become operational bottlenecks.
FACT: Traditional payment models were not designed for modern, multi-party digital businesses and often add friction at the exact moment growth accelerates.
A Payment Facilitator, commonly known as a PayFac, is a modern payment solution designed to remove that friction and help you scale faster and more confidently.
What is a PayFac?
A Payment Facilitator (PayFac) is a company that enables businesses to accept payments under its own master merchant account while onboarding sub-merchants—such as sellers, service providers, or platform users—directly onto its platform
Instead of requiring each business operator to set up a separate merchant account with a bank or processor, the PayFac handles underwriting, compliance, risk monitoring, and transaction processing on their behalf.
This structure allows you to embed payments directly into your product, creating a seamless experience for both your business and its users. In short, a PayFac simplifies payment acceptance by centralizing complexity behind the scenes.
Why a PayFac is the Ideal Payment Solution
For startups
- PayFacs dramatically reduce time to market by eliminating lengthy merchant account approvals and replacing them with fast, digital onboarding flows.
- Startups can begin accepting payments quickly without becoming experts in payments compliance, fraud management, or regulatory requirements.
- With payments handled by the PayFac, founders can stay focused on building their product and acquiring customers instead of managing backend financial operations.
For marketplaces
- The PayFac model is especially powerful for multi-seller environments.
- A PayFac supports multiple sellers operating under a single platform, making it easy to onboard, manage, and pay out vendors at scale.
- Features like split payments and automated payouts ensure funds are routed correctly between the platform and its sellers without manual intervention.
- Centralized reporting and control give marketplaces operators clear visibility into transactions, fees, refunds, and seller performance—all from one system.
For SaaS platforms
- PayFacs enable monetization strategies that go beyond subscription fees.
- Platforms can integrate payments directly into their software, creating a unified user experience while generating additional revenue from transaction volume.
- PayFacs simplify compliance and risk management by handling KYC (Know Your Customer), AML (Ant-Money Laundering), and ongoing monitoring requirements.
- As the platform grows, the PayFac model scales effortlessly, supporting higher transaction volumes, new geographies, and more complex payout structures without requiring a complete payment overhaul.
Across all three of these business models, PayFacs offer faster access to funds, streamlined reconciliation, and infrastructure designed to grow alongside the platform.
PayFacs are the Future of Embedded Payments
Embedded payments are no longer nice-to-have—they are expected by today’s digital customers.
PayFacs make embedded payments practical by removing the operational and regulatory barriers that once made them difficult to implement. They allow businesses to deliver a seamless, end-to-end experience where payments feel like a native feature rather than a third-party add-on.
Conclusion
Payment Facilitators solve many of the challenges that slow down startups, marketplaces, and SaaS platforms when accepting payments.
By simplifying onboarding, managing compliance, and supporting complex payment flows, PayFacs enable businesses to scale with confidence. They provide the infrastructure needed to support multiple sellers, automate payouts, and gain clear financial visibility.
For any business looking to embed payments and grow efficiently, the PayFac model offers a clear and compelling advantage.
Discover why OTT Pay is the right PayFac solution for your business.