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My dismal payfac experiences

I do not accept electronic payments. My tickets are large,
infrequent and keyed. I am not the optimal merchant
client.

So you think you can dance
The first payfac was with a large bank that has a great
mobile banking app. I love it and use it daily. Applying
for card acceptance was slick. I simply checked a box on
the app, and I was accepted. Pricing was high, but I was
instantly ready to accept cards. The day I was approved, I
keyed in my first order. After a week without payment, I
called. They reviewed my account and released the funds.

If I had not called, my money might still be sitting on hold.
Either they had so many "held" transactions that they were
terribly behind or the queue was not being worked. In my
instance, there was no need to hold the funds. My average
By Ken Musante daily balance was tenfold the size of the transaction, and
I had a history with the bank. Though it was my first
Napa Payments and Consulting transaction, I was good for the amount.

ayfacs work best when serving a specific verti- This payfac either needed to do a better job underwriting
cal. Done right, a payfac can employ expedited so it could lessen the number of held deposits, or it
and automated underwriting, stripping away
P many questions that would need to be parsed should have had better automation to cross reference my
additional banking relationship to lessen the number of
on a normal application. Type of business, product type, holds. In either case, there should have been regular (or
method of card acceptance and average ticket could all be at least some) communication regarding the status of
assumed if the payfac were supporting a specific vertical my funds. I was exceptionally pleased at the ease of the
such as dental offices. account sign-up, but all that good will was lost when I had
to call in and request my funds. Grade: D+
Underwriters could deck out their acceptance criteria
against dental offices and have distinct credit scores or Payfac part two
validation requirements that are specific to dentists. They
could cross reference through social media, dental schools The second payfac was associated with my accounting
and/or dental supplier records in addition to running the package. I specifically signed up to accept ACH
merchant through an automated KYC and underwriting transactions. Again, the pricing was high. The sign-
process. up was uneventful, but I did have to provide additional
information associated with my LLC and validate my type
With a vertical focus, the risk is uniformly calibrated; of business.
anomalies are easily identified and grouped. Gum
surgeons and root canal specialists typically have higher My first transaction was great. My customer entered their
tickets and greater volume, but the underwriting and ACH information directly into the payment gateway from
review process would be similar to that of a general their invoice, which then auto updated my accounting
dentistry practice. ledger.

Payfacs serving across verticals and payment methods have Unfortunately, I did not receive the money and instead
a much more difficult job. They need more information at received an email notifying me that my payments were
the point of acceptance, or they need to hold and validate temporarily disabled. To receive my funds, I needed to
a greater number of transactions. Both scenarios create provide additional information:
friction, and unless done correctly and appropriately 1. What services do you offer your customers? Please
communicated, the result is a poor merchant experience. provide a detailed description.

I recently applied for and was accepted as a merchant with 2. How long have you been in business?
two payfacs. Both payfacs served across verticals and as 3. Do you offer your services on-site or remotely?
such, both failed to properly understand my merchant 4. How does your business attract new customers?
type until after they had boarded my account and held my
funds. To provide context, I am a consultant. In general, 5. Please share any links to your personal and business
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