You see. Here’s how: Merchant of record The merchant of record (MOR) is responsible for receiving and processing payments on behalf of the merchant, assuming liability for the transaction. An ISV can choose to become a payment facilitator and take charge of the payment experience. Instead, the payfac has a master merchant account that it uses to process payments for all the “sub-merchants. Here's how: Merchant of record Merchant of record vs. Here’s how: Merchant of record Merchant of record vs. A PayFac sets up and maintains its own relationship with all entities in the payment process. 5. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. Merchant of record vs. Traditional payfacs have embedded payment systems and register their master MID with an acquiring bank. Here’s how: Merchant of record. The MoR is liable for the financial, legal, and compliance aspects of transactions. The difference between a payment processor and a payment gateway lies in the fact that one—payment the processor—is the service provider facilitating the transaction, while the other—the payment gateway—is the communication channel responsible for securely transmitting the payment data to the payment processor and credit card networks. A payment facilitator (PayFac) is a company that simplifies the process of accepting payments for businesses, particularly small and medium-sized enterprises (SMEs). PayFacs, said Mielke, may face considerable fallout. GETTRX Zero; Flat Rate; Interchange; Learn. Merchant of record or MOR is an essential link between a company that needs to accept electronic payments and consumers of its products. Merchant of record vs. A Payment Facilitator, or PayFac, is a sub-merchant account used by merchant service providers to provide payment processing services to their own clients, known as sub-merchants. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Stripe's payfac solutions can empower businesses to accept payments online without a merchant account or merchant identification number (MID) of their own. PayFac model is easier to implement if you are a SaaS platform or a. An ACH return is not the same as an ACH cancellation. A Payment Facilitator or Payfac is a service provider for merchants. Merchant of record vs. Within the ARM industry, PayFac models can provide an especially significant benefit – these models can be used to enable full compliance for convenience fee solutions, in. The MoR is liable for the financial, legal, and compliance aspects of transactions. A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. This means that, while the PayFac processes the payment, any questions or complaints about the purchase will be dealt with by the sub-merchant. Payment facilitators (PayFacs) or payment service providers (PSPs) serve as the merchant of record with acquirers and processors, operating a single merchant account. Merchant of record vs. Payment facilitators are also required to monitor the risk of the sub-merchant per the compliance schedule policy of the PayFac. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. Each of these sub IDs is registered under the PayFac’s master merchant account. A merchant of record is an entity that accepts cardholders’ payments and assumes liability for processing of these payments on the merchant’s behalf. This means that, while the PayFac processes the payment, any questions or complaints about the purchase will be dealt with by the sub-merchant. In the case of Merchant of Record (MoR), the services provider is responsible for financial activities e. 2. As the name suggests, this is the entity that processes the transactions. They use the PayFac’s merchant account to process their transactions, and they pay a fee to the PayFac for. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. A merchant of record is an entity that is legally authorised and responsible for processing customer payments – here's what businesses should know about it. , invoicing. Platforms using a traditional payfac solution open a merchant bank account and receive a merchant ID (MID) to acquire and aggregate payments for a group of smaller merchants, typically called sub-merchants. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. A Payment Facilitator (PayFac) is a type of merchant services company that provides business owners with a way to accept electronic payments, both online and. Under the PayFac model, a merchant is set up under the PayFac’s master account, but they are onboarded with their own unique MID. From there, PayFacs assign businesses as sub-merchants under the PayFac’s master merchant account. The PayFac owns the direct relationship with the payment processor and acquiring bank. The payment facilitator provides merchants with the infrastructure for the seamless end-to-end processing of credit card payments. A Payment Facilitator (PayFac) is a type of merchant services company that provides business owners with a way to accept electronic payments, both online and in-store. Merchant of record vs. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. They handle all payments and take on the associated liabilities, such as collecting sales tax, ensuring Payment Card Industry (PCI) compliance, and honoring refunds and chargebacks. PayFac-as-a-service delivers a competitive payment program with instant onboarding of merchants while creating a seamless customer experience. PayFac-as-a-Service; Pricing. Batches together transactions from sub-merchants before sending them to processors. The merchant of record (MOR) is responsible for receiving and processing payments on behalf of the merchant, assuming liability for the transaction. A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. Article September, 2023. Here’s how: Merchant of record. The merchant of record is responsible for maintaining a merchant account, processing all payments. A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. Businesses that choose to work with a payfac are essentially submerchants under this master account. As the merchant of record, a PayFac can aggregate and process the card payments for as many “sub-merchants” as they would like underneath their umbrella. FinTech 2. Fast forward to today, Lightspeed has become a payment facilitator (“payfac”) under its ‘Lightspeed Payments’ offering. Rather, the money is passed from the processor to the merchant’s account. The PayFac model has gained popularity in recent years, as it allows businesses to simplify their payment processing and reduce costs, while also providing a better customer experience. Payment Processors for Small Business: How to Make the Right Choice for You. A seller of record is referred to and identified as the online payment system that sells a product to the end consumer. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. On merchant-owned e-commerce websites, they'll need a checkout interface with a payment gateway that can accept credit and debit card details. If you're unaware of current market rates, costs can be. The MoR is liable for the financial, legal, and compliance aspects of transactions. Here, the Payfacs are themselves the merchants of record. While the term is commonly used interchangeably with payfac, they are different businesses. For example, aggregators facilitate transaction processing and other merchant services. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. Do the math. The PayFac uses their connections to connect their submerchants to payment processors. Read on to learn more about how payment facilitator vs. Most payments providers that fill. This was around the same time that NMI, the global payment platform, acquired IRIS. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. Facilitates payments for sub-merchants. Selecting the suitable operating model and payment service provider (“PSP”) partner is at the core of a payfac strategy. A PayFac will smooth. Traditionally, a business that wanted to accept card payments would need to set up a merchant account with a bank, which can be a complex and time. Here’s how: Merchant of record. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Understandably, the PayFac model has grown rapidly in popularity with software vendors in a wide variety of categories. merchant of record”—not. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. A merchant of record (MoR) is a legal entity responsible for selling goods or services to an end customer. It offers the. A payment facilitator (or PayFac) is a payment service provider for merchants. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Traditional payfacs have embedded payment systems and register their master MID with an acquiring bank. Consolidates transactions. Merchant of record vs. Wide range of functions. Settlement must be directly from the sponsor to the merchant. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. PayFac or the Payment Facilitator is the third-party payment services provider (PSP). paper, the merchants’ data is. Here's how: Merchant of record. It acts as a mediator between the merchant and financial institutions involved in the transactions. The key participants in this model are the acquirer, payment facilitator, and sponsored merchant. Traditional payfacs have embedded payment systems and register their master MID with an acquiring bank. The PayFac provides payment acceptance capabilities to downstream sub-merchants. The PayFac model allows a single entity to become the “merchant of record” and board sub-merchants with fewer data requirements and scrutiny. All transactions are aggregated under one master merchant account and all funds are settled in the PayFac’s bank account. Next, Aberman and Webster will discuss the difference between a PayFac and a Merchant of Record. For. Understanding Payfac vs Merchant of Record. While an ordinary ISO provides just basic merchant services (refers. In a comprehensive white paper on the subject we explained PayFac meaning and how to become a payment facilitator. DENVER, October 10, 2023 — Infinicept, a leading provider of embedded payments, and Payment Visor, a payment management consulting firm, today announced a partnership that brings together critical payments expertise with Infinicept’s Payfac -as-Service and embedded payments platform. Consolidates transactions. Stripe's payfac solutions can empower businesses to accept payments online without a merchant account or merchant identification number (MID) of their own. A payfac is a type of payment aggregator, but it typically provides a more comprehensive suite of services. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. A relationship with an acquirer will provide much of what a Payfac needs to operate. A PayFac will smooth the path. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. A merchant of record is an entity that is legally authorised and responsible for processing customer payments – here's what businesses should know about it. The PayFac model differs from the traditional merchant services model in a few distinct ways: Increased efficiency: Instead of a heavy, paper based underwriting process upfront, the PayFac underwrites the sub-merchant on an ongoing basis as they continue to process transactions. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Merchant of record vs. Our belief is that the logic behind these double standards is that a merchant-of-record carries the liability and compliance responsibility in an ecosystem that is all the same. Most payments providers that fill. Here are the six differences between ISOs and PayFacs that you must know. With the PayFac model, the ISV can instead offer those same users the option to become sub-merchants, reducing friction and tapping into a new revenue. The PayFac is the merchant of record for transactions. Solutions. merchant of record”—not the underlying retailers. FIS’ rival, Fiserv, acquired the remaining stake of Finxact for $650 million, while another company, Fintech Amount, bought Linear for $175 million. A payment facilitator (payfac) is a company that simplifies the process of accepting electronic payments for other businesses. Step 2: The payment aggregator securely receives the payment information from the merchant's website or app and forwards it to the acquiring bank for processing. Sub-merchants, on the other hand. Also Read: How to Choose Between a Payment Facilitator (PayFac) and a Merchant of Record (MoR) for Your Business What is the Seller of Record (SoR)? The. Instead of each individual business needing to set up its own merchant account , a process that can be time-consuming, the payfac effectively “rents out” merchant account functionality under its larger master merchant. Here’s how: Merchant of record Merchant of record vs. Merchant account Payfacs also provide a merchant account, a type of bank account that allows businesses to accept and process electronic payments. If a marketplace or any other company (ISO, SaaS provider, ISV, franchisor, venture capital firm) decides that it is the right time for it to become a white-label or full-fledged PayFac, it can do so. They are then able. The PayFac owns the direct relationship with the payment processor and acquiring bank. Merchant of record vs. A PayFac, or payment facilitator, is a merchant services model that streamlines the merchant account enrollment process by onboarding a merchant as a sub-account under the PayFac’s master account. Key Features of Visa’s CBPS Program: Merchant on record: The CBPS provider serves as the merchant on record, processing consumer card payments on your behalf. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. It is when a business is set up as a primary merchant account and provides payment processing to its sub-merchants. It does this by managing the numerous responsibilities - including risk management and compliance - and relationships - including banks and card networks - necessary for payment processing on behalf of the merchant. Here’s how: Merchant of record Merchant of record vs. Money Transmission in the Payment Facilitator Model. A merchant of record is an entity that is legally authorised and responsible for processing customer payments – here's what businesses should know about it. Clover is not a PayFac and does not own its payments platform or anything they sell. Insiders. Merchant of record vs. Here's how: Merchant of record. Rather, the money is passed from the processor to the merchant’s account. There’s a distinct difference between PayFac and MOR in the space. Payscout) acts as the Main Merchant (also known as the Merchant of Record) and can board numerous merchants under this “master account. The MoR is liable for the financial, legal, and compliance aspects of transactions. The term “merchant of record” refers to the entity that is legally authorized and responsible for processing customer payments —including credit and debit card transactions and digital wallet transactions —for goods or services on behalf of a business. But now, said Mielke. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. The key aspects, delegated (fully or partially) to. PayFac compliance involves several considerations like: Merchant of Record It is the first thing to consider in compliance. Payfacs eliminate the need for individual businesses to set up their own merchant accounts with a bank or a card network. It’s used to provide payment processing services to their own merchant clients. The critical distinction between a merchant account and a business bank account is that the former allows you to manage credit card transactions while the latter enables you to manage all of your funds. PayFacs are models where the service provider (e. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. Payment facilitation, or PayFac allows a SaaS company to act as a master merchant for its client base. Step 1: The customer initiates a payment transaction on a merchant's website or mobile app. By allowing submerchants to begin accepting electronic. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. We promised a payfac podcast so you’re getting a payfac podcast. Sub-merchants, on the other hand. ACH returns can happen for lots of reasons, including insufficient funds, closed accounts, invalid customer details, or stop payment orders. Since the PayFac already has a relationship with the payment processor and the SaaS company, approval takes as little as a few hours. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. This business model enables the organization, now a payment facilitator, to bring their merchants a seamless and instantaneous onboarding process, as well as flat-rate. In a card processing transaction, the merchant of record (MOR) is the company that sells the product or service to the buyer. More commonly, a PayFac will enable you to set up a sub-merchant account, making it much easier to set up an account and begin accepting customer payments. Merchant of record vs. Not all that long ago, that same software company would have gone all the way to becoming a merchant of record or a PayFac in the drive to offer payments and push margins. Understanding Payfac vs Merchant of Record. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Here, the Payfacs are themselves the merchants of record. In contrast, PayFacs have one or two processor relationships and onboard ISVs as referral agents. As merchant numbers and workflow complexity grows, using white-labeled PayFac-as-a-Service can set your ISO apart. The term “merchant of record” refers to the entity that is legally authorized and responsible for processing customer payments —including credit and debit card transactions and digital wallet transactions —for goods or services on behalf of a business. The term “merchant of record” refers to the entity that is legally authorized and responsible for processing customer payments —including credit and debit card transactions and digital wallet transactions —for goods or services on behalf of a business. 20 (Purchase price less interchange) Authorization and transaction data $97. Because of those privileges, they're required to meet industry. Here’s how: Merchant of record. An product descriptive merchant of record concept, as well how the commonalities and the differences between MOR and payment moderators. However, PayFac concept is more flexible. Think of a payment facilitator as a regulated entity that manages card network relationships, sub-merchant onboarding, and payment services for merchants. Merchant of record vs. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. A PayFac is the official merchant of record with the major card brands such as Visa and Mastercard and holds the relationship with the acquiring bank. Merchant of record vs. Thus, an ISO’s customers can access a wider range of processors, even if the onboarding experience is tedious. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. A merchant of record is an entity that is legally authorised and responsible for processing customer payments – here's what businesses should know about it. The MoR is liable for the financial, legal, and compliance aspects of transactions. We deposit funds into your checking account within 1-2 business days from the transaction. PayFacs and payment aggregators work much the same way. Our belief remains that all payfacs will inevitably write directly to the networks and avoid the processors for so many reasons. A merchant of record (MoR) is the entity that is authorized, and held liable, by a financial institution to process a consumer’s credit and debit card transactions. Stripe's payfac solutions can empower businesses to accept payments online without a merchant account or merchant identification number (MID) of their own. Merchant of record vs. The term “merchant of record” refers to the entity that is legally authorized and responsible for processing customer payments —including credit and debit card transactions and digital wallet transactions —for goods or services on behalf of a business. The reports, records, and dashboard help the. Merchant of record vs. Here’s how: Merchant of record A merchant account is a type of business bank account that is used to process electronic and payment card transactions. responsible for moving the client’s money. Based on that definition, PayFacs take over the merchant underwriting process from the acquiring bank. A payment facilitator, also known as a payfac, is a provider that extends all the functionality of a merchant account to merchants without requiring them to go through the process of acquiring their own individual merchant account. The MoR is liable for the financial, legal, and compliance aspects of transactions. This also means the Payfac assumes the merchant’s credit liability, but they diversify this risk by aggregating a large pool of merchants under them. Merchant of record vs. The PayFac provides payment acceptance capabilities to downstream sub-merchants. Step 3: The acquiring bank verifies the payment information and approves or. The name of the MOR appears on the receipt that the customer (cardholder) receives, which may differ from the name of the product seller. Payment facilitation, or “payfac,” continues to grow in popularity among software providers and is designed to facilitate payment card acceptance without requiring individual merchants to go through the lengthy process of establishing traditional merchant accounts. A payment facilitator is a company (generally an ISV) that allows its users to accept payments through their software using their infrastructure. The PayFac does not have to underwrite all merchants upfront — they are instead, underwriting the merchants essentially as they continue to process transactions for them on an ongoing basis. 1. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Merchant of record vs. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. Upon approval, the PayFac aggregates the merchant into a pool, so they can conduct business under the PayFac’s umbrella. Rather then setting up each of their clients with their own merchant account, the Payfac lets them piggyback on the Payfac’s account. MOR is responsible for many things related to sales process, such as merchant funding, withholding. In summary, direct merchant accounts provide more control and customization but require businesses to manage all aspects of payment processing,. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. A PayFac provides merchant services to businesses that allow them to start accepting payments. What comes to mind is a picture of some large software company, incorporating payment. accounting for 35. Payment Facilitator (PFAC, PayFac, PF): A merchant service provider who can facilitate transactions and simplify the merchant account enrollment process on behalf of the sub-merchant. The Shifting Provision of Merchant Services . Platforms using a traditional payfac solution open a merchant bank account and receive a merchant ID (MID) to acquire and aggregate payments for a group of smaller merchants, typically called sub-merchants. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. Risk management. NMI By signing up with NMI as a reseller, you can offer your merchants complete payment solutions that enable them to begin selling right away;A merchant of record is an entity that is legally authorised and responsible for processing customer payments – here's what businesses should know about it. The marketplace also manages the. Batches together transactions from sub-merchants before. This is a clear indicator that fraud monitoring should be a priority in 2022 and beyond, and why it’s vital to work with a PayFac like. When a company decides to operate as a payment facilitator, it obtains a payment facilitator account from an acquirer and aggregates payment transactions for its merchant portfolio through that account. Payments news: Rich Aberman, co-founder of WePay, teaches Karen Webster what a PayFac is, why it differs from a merchant of record and how to become one. In contrast, with a PayFac, the customer will almost certainly interact directly with the individual sub-merchant, and in some cases may not even know that a PayFac is involved in the transaction. As a result, the acquiring bank is in charge of the transaction processing for PayFac customers. The MoR is liable for the financial, legal, and compliance aspects of transactions. With the PayFac model, the ISV can instead offer those same users the option to become sub-merchants, reducing friction and tapping into a new revenue source – the valuable transaction fees generated by each sub-merchant sale. Sometimes, a payment service provider may operate as an acquirer in certain regions. Here’s how: Merchant of record. Here’s how: Merchant of record In contrast, with a PayFac, the customer will almost certainly interact directly with the individual sub-merchant, and in some cases may not even know that a PayFac is involved in the transaction. Payment facilitators can quickly and easily help businesses accept credit/debit card payments. The MoR is liable for the financial, legal, and compliance aspects of transactions. Payment facilitators (acting as the master merchant) control the onboarding process for their customers, which are referred to as sub-merchants. While all of these options allow you to integrate payment processing and grow your. Merchant account Payfacs also provide a merchant account, a type of bank account that allows businesses to accept and process electronic payments. Establish connectivity to the acquirer’s systems Two-way information flow: • Th Payfac pushes messages the acquirer (transaction info). Select Add Sub-Merchant. From the iQ Bar of the Merchant Onboarding Page, click the Operations icon and select PayFac Portal. Traditional payfacs have embedded payment systems and register their master MID with an acquiring bank. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. Besides, this name appears on all the shopper’s card statements. A payment facilitator (payfac) is a type of merchant services provider that simplifies the payment process for businesses. That said, the PayFac is. S. On behalf of the submerchants, payments (debit, credit, etc. ) are accepted through the master merchant account. ; Selecting an acquiring bank — To become a PayFac, companies. PayFacs can also use white-label payment orchestration software and offer it to their clients to create a. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. becoming a payfac;. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. PayFacs provide a similar service to standard merchant accounts, but with a few important differences. This model gives your users the ability to seamlessly accept payments directly from your platform and allows you to own and monetize the payments experience. Classical payment aggregator model is more suitable when the merchant in question is either an. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. With payfacs, merchants are assigned a sub-merchant ID in which all of these sub-merchants are registered under the payfac’s master merchant account. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Fast forward to today, Lightspeed has become a payment facilitator (“payfac”) under its ‘Lightspeed Payments’ offering. Here's how: Merchant of record A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. An related describing salesman of record concept, as well-being as of similarities and the differences between MOR and payment facilitators. Enabling businesses to outsource their payment processing, rather than constructing and maintaining their own. Sponsors: Sponsors are the combination of an acquiring bank and a payment processor. A payment facilitator is a merchant services business that initiates electronic payment processing. Here’s how: Merchant of record A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. PayFac vs merchant of record vs master merchant vs sub-merchant. Instead of each individual business needing to set up its own merchant account , a process that can be time-consuming, the payfac effectively “rents out” merchant account functionality under its larger master merchant. . The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. In this article we are going to explain why payment facilitator model is becoming so popular (attracting more and more entities) while ISO model is gradually dying out, vacating the space for new payment facilitators. Merchant of record vs. A PayFac assumes all the risk involved in payment processing – including fraud loss, chargebacks, and non-payment. The two have some shared features, but they are ultimately very different models. A sub-merchant platform involves a Payfac that has been pre-approved for one master merchant account with an acquirer, like TD. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. ISOs mostly resell merchant accounts, issued by multiple acquiring banks. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. While both the payment facilitator and marketplace models serve to enable payments acceptance for a wider variety of merchant types and sizes than ever before, they are not the same thing. Instead of each individual business needing to set up its own merchant account, a process that can be time-consuming, the payfac effectively “rents out” merchant account functionality under its larger master merchant. Payfac 45. The MoR is responsible for processing customer payments on behalf of the business, taking on numerous legal and financial. Here's how: Merchant of record. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. 0 is to become a payment facilitator (payfac). A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. payment facilitator (payfac) MoRs and payfacs both play significant roles in the ecommerce payment process, but their responsibilities and the scope of their services differ. Now that the basic idea of the merchant of record and the seller of record is clear, it is time to explore the major points of difference between them. Here’s how: Merchant of record. To our knowledge, the term MOR is not a formal designation, although it does provide a useful shorthand for platforms, marketplaces, and others whose business model involves meeting the criteria to be a merchant. g. Here’s how: Merchant of record Merchant of record vs. A merchant of record and a payment facilitator (PayFac) share many aspects. The MoR is liable for the financial, legal, and compliance aspects of transactions. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Merchants undergo a series of evaluations before they are onboarded as sub. Platforms using a traditional payfac solution open a merchant bank account and receive a merchant ID (MID) to acquire and aggregate payments for a group of smaller merchants, typically called sub-merchants. There are several benefits to this model. Payment Facilitators. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. com 1) A PayFac always acts on sub-merchant’s (retailer’s) behalf, while an MOR might be the actual retailer. Payment Facilitator. A merchant of record is an entity that is legally authorized and responsible for processing customer payments—here’s what businesses should know about it. Instead, the payfac has a master merchant account that it uses to process payments for all the “sub-merchants. Here’s how: Merchant of record The term “Merchant of Record,” however, does not appear in the most recently published Visa or MasterCard Rules. payment facilitator (payfac) MoRs and payfacs both play significant roles in the e-commerce payment process, but their responsibilities and the scope of their services differ. Besides that, a PayFac also takes an active part in the merchant lifecycle. Registered payment facilitators earn 20-40 basis points more per transaction than they would riding the rails of another wholesale PayFac. A PayFac is an intermediary entity, performing a set of functions (delegated by the acquiring bank) for multiple merchants. A payment processor’s job is to ensure that money flows correctly; the payment facilitator must collaborate with the payment processor. A merchant of record (MoR) is the entity that is authorized, and held liable, by a financial institution to process a consumer’s credit and debit card transactions. who do not have a traditional acquiring relationship. That means you assume the risk associated with the transactions processed on your platform. Here’s how: Merchant of record. PayFac vs merchant of record vs master merchant vs sub-merchant. For example, many of PayPal. PayFac: A PayFac essentially takes on some of the duties of a payment processor and a payment gateway and acts as the merchant-of-record for the acquirer, servicing its submerchants (customers). March 29, 2021. However, if the business experiences rapid growth and needs to onboard a large number of merchants, the payfac may face scalability challenges. The unit’s net operating margin of 46. Merchant of record vs. ” In other words, instead of setting up merchants to process payments with their own unique accounts, a PayFac is like an aggregator, where the Main.