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dedicated human resources, connecting payfacs with a year and hundreds of thousands of dollars to build a
payment acquirers, and end-user clients with APIs and payfac platform from scratch; using Payrix it took just a
portals to facilitate customized billing and payment few months to get up and running. "The Payrix platform
acceptance that track market requirements. invoices the fleet and sends the funds directly to me,"
Pross stated. "We're not paying interchange and chasing
Payfacs optimize the process by adding layers of customers to get paid."
integration from a centralized place, while maintaining a
consistent user experience. They also can help merchants The MLS connection
expand domestically and globally. Using payfacs that So what does all this mean for the feet on the street?
support issuing and processing across geographic markets MLSs can leverage payfac relationships to pursue specific
provides consistent experiences to customers at home and vertical markets with greater efficiency and success, said
abroad, Naaman said. Allan Lacoste, Vice President at Pivotal Payments. "They
can run an opportunity and online offer for a quick and
Merchants need to connect to the right rails and make easy way to get a merchant account," he said. "They don't
sure the rails are working, and they want the flexibility have to solve the technical issues; tech support teams can
to reach more markets and sell more, Naaman added. manage integration requirements."
"Ultimately, there are three main goals in payments: make
sure the deal is done, make sure the transaction happens Ablowitz added, "The payfac model isn't really all that
and optimize the revenue," he said. different from that of an ISO. They go in and they solve

Technology expertise problems with software and services. There's money to be
made, but the problems that need to be solved are bigger
Key competencies payfacs bring to the market are than just payments."
technology and integration expertise. But their expertise
isn't all-inclusive. "There are pieces of what payfacs do that Lacoste said MLSs are using payfac models to create
aren't their core competencies," Targen noted. Routines like different kinds of sales channels with dynamic onboarding
underwriting, fraud management and chargebacks: these that is faster and more efficient than traditional
are areas of expertise they gain working with acquirers underwriting. Using payfac platforms eliminates the need
and ISOs. for full-blown merchant applications, he noted. Multiple
options include hybrid payfac models for merchants who
Some also need upstream technology partners. "A lot may not initially need a full payfac platform but want the
of people recognize that payfacs are the next big thing, option to migrate to a payfac at some future date.
but without the technology to manage and automate the
process, it can become a bigger headache," Greenberg said. "An agent brought us a car dealership that wanted an
"Building your own platform can be time-consuming and integrated platform to process multiple dealers through
expensive, and there's also a certain degree of trial and a single MID," Lacoste said. "We created a hybrid model
error when you're building a technology platform." that automated account onboarding and lead generation
to ensure that incoming leads were democratically
Silberstein said, "When you register as a payfac, you can distributed to salespeople at each dealer, even if they
build your platform from scratch or brand and customize happened to be away from their desks."
a white-label payfac platform. Most of our clients view
payments as a small but critical part of their business. Some Even agents with a mixed bag of merchants can streamline
are more verticalized than others." The Payrix platform the onboarding process, Lacoste pointed out. GoDaddy.
enables clients to stay focused on their core businesses com, the Internet domain registrar and web hosting
without worrying about the mechanics of payments, he company, adopted a payfac model for its hosting service,
added. he noted, providing a frictionless way for customers to
add ecommerce to their websites. Lacoste offered another
Case in point: Lawrence Pross, Managing Member of example of a CPA with 400 clients who offered free
Taxi Charge LLC, a registered payfac, said he chose to merchant statement analysis in an online newsletter. An
work with Payrix rather than build his payfac platform embedded link within the analysis redirected clients who
from scratch. "It reduced costs and time-to-market, and opted in to a short-form application.
improved efficiencies by facilitating payments from taxi
fleets instead of individual drivers," he said, adding that Oglesby stated that working with payfacs also will help
it provided other added value, including estimated PCI MLSs identify and pursue new vertical markets such as
compliance cost savings totaling more than $100,000 a online fundraising. "I see a lot of growth opportunities in
year. Time and cost savings related to POS equipment new verticals, also in international markets," he said.
and software certifications were also significant, Pross
said. He estimated it would have taken six months to

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