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November 27, 2017 • Issue 17:11:02
From acquiring to facilitating:

How payfacs are changing the

acquiring market – Part 2

Putting market in perspective
In a 2016 report titled Merchant Aggregation: Growth
Opportunity or Compliance Burden?, First Annapolis
Consulting predicted continued growth for the payfac
model but not at the expense of traditional acquirers and
their sales partners. "Developing support models and
offerings specific to aggregators may be a significant
opportunity for acquirers over the next several years,"
Brooke Ybarra, First Annapolis Senior Manager, wrote in
the report.

Todd Ablowitz, Chief Executive Officer at payment
consultancy Double Diamond Group LLC, suggested this
is part of a larger market shift. "Software is the future of
payments," stated Ablowitz, who also is co-founder of
Infinicept, a payfac service provider. "Selling payments
By Dale Laszig and Patti Murphy as a stand-alone service no longer makes sense when
merchants have moved on to more sophisticated solutions."
rom the first electronic transactions, merchant
level salespeople (MLSs) have helped customers Merchants aren't shopping for standalone POS systems;
navigate the ever-changing payments sphere. they are looking for systems that help their businesses
F They led millions of merchants from paper to run more efficiently, Ablowitz pointed out. "Whether it's
dial-up to broadband, and from countertop to integrated scheduling, registering customers or using social media
to omnichannel systems. Now, after decades of leading to assess risks, they want an operating system for their
major initiatives, MLSs face a critical juncture. As mer- business, and if they find it, they will use it," he said. "You
chants replace single-use systems with digital service can't sell rate; we've been saying that forever. You will go
models, and payment facilitators (payfacs) embed pay- broke." It's not just about payments anymore; payments
ments into specialized service offerings, traditional ISO are a feature, he added.
and acquirer business models are being disrupted.

This two-part series explores how payfacs are changing Contributed articles inside by:
the acquiring marketplace, creating opportunities and
challenges for acquirers and MLSs. Part 1 revealed how Mike Ackerman ......................................................................................23
early payfac models set a higher bar for acquirers, with Steven Feldshuh ...................................................................................36
streamlined applications, fast approvals and automated
boarding. Part 2 explains how payfacs are evolving and Adam Atlas ..............................................................................................38
how traditional acquirers and MLSs can collaborate and
compete in the new payments marketplace. TOC on page 3

Continued on page 25