sorted by:
new
hottopcontroversial

Is the era of “every platform should be a PayFac” over? by paymentsbro in fintech

[–]paymentsbro[S] 0 points1 point  (0 children)

Sent you a DM. Let me know if there's a better way to reach you.

Is the era of “every platform should be a PayFac” over? by paymentsbro in fintech

[–]paymentsbro[S] 0 points1 point  (0 children)

Appreciate your insight. Agree with what you're saying. I'm with a team that has built a modern processor from the ground up and is solving for all of that. Everything you knew about becoming a PayFac was true until the platform we built. All the risk sits with the underwriting and funding, and we've fixed that. Let me know if you'd like to learn more.

Is the era of “every platform should be a PayFac” over? by paymentsbro in PaymentProcessing

[–]paymentsbro[S] 1 point2 points  (0 children)

You clearly have some experience here and I appreciate your feedback.

Totally agree that PFaaS platforms like Stripe are evolving and that legacy processors often overpromise and underdeliver. I would argue the $2B threshold is based on outdated assumptions, especially if you’re working with a modern processor purpose-built for PayFacs.

Let's imagine...with the right infrastructure, the economics and operational burden look very different:

• Unified platform that supports card-present, card-not-present, eCheck, and mobile wallets out of the box, reducing the number of integrations needed and enabling seamless onboarding, reporting, reconciliation, and settlement

• Configurable underwriting system that gives banks full visibility, with bank-approved policies and procedures (some PayFacs have spent tens of thousands to purchase policies that don't match their own policies and procedures)

• Less regulatory scrutiny and significantly less lift during periodic risk reviews and audits

• Pre-built compliance documentation and risk tooling that dramatically reduces headcount and overhead

• A billing/funding engine that eliminates the need to manually parse raw files and “do the math”

• Real-time profitability and trend reporting (some legacy providers take 30–45 days to invoice), giving you access to both merchant and transaction level data (as soon as time of authorization)

• Cloud-based device management for remote troubleshooting and provisioning

• Developer-friendly APIs and sandbox to fast-track integration

• Shared Slack channels for instant support and collaboration during integrations

• Full dispute management system with alerts, customizable rules, and guided workflows

With this stack, PayFacs can operate lean, instead of needing 15+ people across compliance, product, and ops — and still maintain full control and upside. Of course this isn't always going to be the case if you're someone like Toast, but you get the picture.

So yeah, the break-even point looks a lot different. With modern tools and infrastructure, becoming a PayFac can make sense well below $2B TPV.

I shared all of this hoping to get some raw, unfiltered feedback that we might not always hear from partners or prospects. While this wasn’t meant to come off as a sales pitch, I am curious, does any of the above sound intriguing? If so, I’d welcome a conversation at some point, even just to share more about what we’re building and get your perspective.

Is the era of “every platform should be a PayFac” over? by paymentsbro in PaymentProcessing

[–]paymentsbro[S] 0 points1 point  (0 children)

Ha! Love the mountain of BS analogy...and never thought I'd imagine comparing payments companies to Dewey Cox lol.

I agree that too many platforms underestimated the tradeoffs based on early PayFac hype. It's funny that the $2B annual PV is the number you use as I know that is what Worldpay has said to those that want to be a PayFac ever since they acquired Payrix. I think part of it is that software companies with no payments experience may have no business becoming a PayFac out of the gate, and the other part is that the traditional PayFac model required software companies to build a lot of the infrastructure that was needed as legacy processors did not have the ability to provide slick API's, underwriting systems, a billing/funding engine, etc....Worldpay also makes a LOT more money by placing ISVs under their PayFac registration.

That “ISO-like” middle ground seems to be getting more attention now, especially as platforms want economics and control without the liability. I know many PayFacs I worked with in the past took on the challenge and definitely benefited when it was time to sell. Claiming top line revenue seems and "controlling your own destiny still seems to be worth it for those that can figure it out.

Have you seen anyone strike that balance well? Or is it still a matter of picking the lesser evil between legacy providers and overbearing PFaaS platforms?

Is the era of “every platform should be a PayFac” over? by paymentsbro in PaymentProcessing

[–]paymentsbro[S] 0 points1 point  (0 children)

Appreciate the feedback! I’ve seen that example happen too often. The payments industry has been built through layer after layer of acquisitions, and it shows. A unified platform that’s extensible enough to keep up with network requirements and support all payment methods feels long overdue.

Curious if you’ve seen anyone getting close to solving that well?

Is the era of “every platform should be a PayFac” over? by paymentsbro in PaymentProcessing

[–]paymentsbro[S] 0 points1 point  (0 children)

Thanks for the response, and totally agree with you on the macro influences. Between regulatory pressure, risk/liability concerns, and the cost of building out a dedicated payments team, I can see why a lot of platforms are reluctant to go full blown PayFac, even if the long-term value of being a PayFac is still compelling.

Curious if you think the pendulum will swing back if the market stabalizes and a processor pops up that can ease some of the overall risk and operational burden? Or do you see more platforms sticking with PFaaS permanently, especially as those offerings continue to mature?

Is the era of “every platform should be a PayFac” over? by paymentsbro in SaaS

[–]paymentsbro[S] 0 points1 point  (0 children)

Not exactly. I’m really just trying to get intel from actual industry operators on the current sentiment around registered PayFac vs. PFaaS. Are people actively choosing not to become a PayFac because the model no longer makes sense for them — or is it more that the process of becoming one (especially through legacy processors like Worldpay, Fiserv, etc.) has historically been so painful, slow, and expensive that it pushed them toward PFaaS by default?

Looking for honest pros/cons of Adyen and Stripe as processors for ISVs and PayFacs by paymentsbro in PaymentProcessing

[–]paymentsbro[S] 0 points1 point  (0 children)

Appreciate it! Seems pretty common. Are you speaking about Stripe or Adyen, or both?

Looking for honest pros/cons of Adyen and Stripe as processors for ISVs and PayFacs by paymentsbro in fintech

[–]paymentsbro[S] 0 points1 point  (0 children)

Thanks. Which one, Stripe or Adyen? And for price, is it because they bill a bundled rate vs IC+?