Payment Facilitator (PayFac)

A company that helps many smaller businesses accept card payments under one master account.

Traditionally, every merchant needed their own merchant account to take card payments. A PayFac flips that model. Instead of each business applying to a bank, they sign up under the PayFac’s umbrella and get access instantly.

The PayFac handles compliance, risk, underwriting, and transaction routing. This model made it radically easier for developers and startups to accept payments. Stripe, Square, Adyen, and Braintree operate this way. So do many vertical SaaS platforms embedding payments into their software.