Becoming a Payfac as a VSaaS Platform or Merchant
Blog post from Basis Theory
Payment facilitators, or payfacs, enable businesses to process payments through a master merchant account, allowing vertical SaaS platforms to embed payment services for their customers rather than directing transaction revenue to third-party payment service providers. By becoming a payfac, platforms can potentially earn roughly 20 to 50 basis points per transaction, improve onboarding and payment experiences for merchants, and reduce the complexity and support risks associated with multiple bespoke payment integrations. The process involves securing an acquiring sponsor, completing rigorous underwriting and PCI-DSS Level One certification, registering with card networks such as Visa and Mastercard, meeting applicable European licensing requirements, building and testing a payment system, and establishing customer onboarding, monitoring, settlement, reporting, and risk-management procedures. Although upfront compliance, technology, and operational costs can be substantial, programmable payment vaults may reduce the burden of securely storing cardholder data and provide flexibility to change acquiring partners. Growing demand for embedded payments is positioning payfac services as a potential competitive advantage, with forecasts estimating more than $4 trillion in payfac-processed payments and approximately $16 billion in associated platform revenue in 2025.
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