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Facilitate To Innovate: How Payment Facilitators Enable The Economy

Facilitate To Innovate: How Payment Facilitators Enable The Economy

Becoming a payment facilitator is a complicated regulatory and technological process; however, this role enables building innovative business models around payments and can be critical for success. Spell has built the SaaS platform designed to run payment facilitators’ businesses most efficiently and help them play their 'A' game.


Traditionally, businesses that wanted to start accepting debit and credit card transactions had to open accounts with an acquirer. However, technological advancement has enabled firms to embed payment services inside their software to create new products with value-added tools and smother customer experience.

Many payment facilitators, also called payfacs, such as Braintree and Stripe, assist merchants in accepting electronic payments, which makes them an essential element of any online business.

This post digs deep into why payment facilitators matter, their features and benefits, and how Spell helps payfacs to stand out and play their 'A' game.

What is a Payment Facilitator?

A payment facilitator is a service provider allowing clients to accept payments quickly and more efficiently.

Payfacs ease the enrollment process, cutting down the approval process for merchant accounts, offering different value-added tools, and aggregating funds from multiple payment channels within one account.

Traditionally, setting up a merchant account involves the tedious process of acquiring a MID (Merchant ID). With a payment facilitator like Amazon Pay, you don’t have to go through this arduous process with the acquirer since they offer sub-accounts to their retailers to run their payments under Amazon Pay’s master merchant ID.

Why Do Payment Facilitators Enable the Economy?

In our opinion, payfacs are an extremely valuable concept in the payment industry and on the market in general because it allows payment businesses to manage their infrastructure layer, gaining an opportunity to build and offer new tools, controlling contracts, prices, and settlements independently.

That’s why the payment facilitation model is critical to cut the innovation cycle in a very sophisticated payments landscape and enable changes that otherwise could easily get stuck in the daily complexity of the payments world.

What’s more, payment facilitation allows you to achieve the following goals:

  • Create and control your toolkit with seamless customer journeys and experiences;
  • Accelerate onboarding by cutting the underwriting process to start accepting online payments faster;
  • Build your data science tools around the new tools and get unique market insights to build advanced business strategies.

Spell platform has already covered each of these payfac advantages technologically and offers affordable global access on a SaaS basis. Cool, right? When you have the top engine in place, there is only one question left…

How Can My Company Become a Payment Facilitator?

Becoming a payfac is undoubtedly a difficult but extremely rewarding challenge. However, having a technological partner like Spell makes the goal of becoming the payment facilitator much easier to reach.

You just need to find the right acquiring partner and convince them that the payfac model makes business sense for your project and you’re capable of executing it, controlling anti-money laundering risks.

To prepare for the negotiation with the acquiring partner, you must take care of the following vital things.

1. License

Being a payment facilitator isn’t just about generating income from payments. There are policies you must follow when underwriting sub-accounts.

That’s why in order just to have a chance to get a payment facilitator’s MID, you need to have a payment institution license in place. Take note that relevant licenses could have different naming depending on the country of regulation and a specific level of authority: payment service provider, payment institution, electronic money institution, money service business, etc.

It is required because, as a payfac, you’ll be able to customise things based on the field and country your clients work in, their size, and risk tolerance.

Nevertheless, you must ascertain that there are criteria concerning the following:

  • Conducting checks on their web pages
  • Gathering and assessing Know Your Client and Know Your Business information
  • How to deal with ownership changes
  • How to deal with business practices changes
  • Conducting manual application review

2. Product

Nowadays, acquirers are very cautious about issuing payfac’s MIDs due to increased attention to anti-money laundering risks because of the historical performance of some players in the past decade.

So now, to become a payfac, you need not only a very reliable business reputation and relevant licenses but also a product that requires you to be a payment facilitator to execute your business model.

3. Numbers

When you have the first two points in place, you should be ready to prove to the upcoming acquiring partner that there is a decent demand for your product on the market and you’ve got sufficient capital to deliver the planned value.

4. Infrastructure

You’ll have to explain how you’ll process the onboarding and operations of your clients, including KYC and other risk management activities.

The infrastructure should give you the capacity to perform the following actions:

  • Conduct and gather KYC checks,
  • Approve data,
  • Underwrite potential sub-accounts,
  • Track ongoing payments,
  • Calculate fees,
  • Report and detect possible frauds,
  • Offer access to your clients to manage and review all their business activity, etc.

Spell got you covered here. We can help your company introduce the payfac model, digitalising and automating all required processes, including onboarding, balance tracking & settlements, and offer businesses the most advanced payment toolkit for payments.

5. Partnership

When you’ve convinced your acquiring partner that your business is worth partnering with, and they’re ready to help you become a payfac, you'll be given a Payment Facilitator ID (PFID).

Congrats! Now you can start servicing, onboarding, and underwriting activities.

Innovate Your Business with a Payment Facilitator From Spell

Becoming a payment facilitator can be a lengthy, complex, and very expensive process, but not with Spell. We have developed a market-leading, cutting-edge platform for worldwide partners who want to optimize & scale their payments business in the most affordable and efficient way.

With Spell, your payfac can be up-and-running or upgraded in 1 week, sometimes as quickly as 1 day, to get you winning in the hyper-competitive payments business.

Spell platform is built on a robust AWS infrastructure, with an outstanding 99.999% uptime, and is PCI DSS Level 1 compliant, as Visa confirms.

We offer various standard features, such as recurring payments, SDKs, and plugins, as well as billing, links for marketing campaigns, payment orchestration, digital onboarding, real-time account balances, and many other value-added tools to scale and optimise your payments businesses.

Handle a Demo Tour, download the Spell Deck and accelerate your business with the best white label payment platform on the market! Let’s get Spelling!

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We see Spell as a Formula 1 pit stop for payment businesses, where they can update their vehicle at light-speed and get back on track to win the race.
— Jevgenijs Novickis, Spell CEO
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SIA Spell entered into agreement No. JU-L-2021/10 with Investment and Development Agency of Latvia for European Regional Development Fund project No. JU-PI-2021/18 - 1.2.1.2/16/I/001 to receive support for attracting highly qualified employees dedicated to developing new features of the SaaS PayTech platform, which will help our clients increase sales and efficiently scale operations and decrease project implementation costs.