Payment Facilitation is a model in the payments industry where a software provider simplifies the merchant account enrollment process by acting as a master merchant that processes transactions on behalf of its sub-merchants.
Payment facilitation makes it easier for small businesses to accept electronic payments by eliminating the need for them to set up their own merchant accounts, instead providing them with a shared account under the umbrella of the payment facilitator.
This model has grown in popularity as it reduces the barriers to entry for small businesses, enabling them to start accepting electronic payments quickly and with minimal upfront costs.
Payment facilitators typically provide a range of services, including payment processing, transaction monitoring, and reporting. They may also offer additional value-added services such as fraud prevention, chargeback management, and customer support.
However, acting as a payment facilitator also involves taking on additional responsibilities, such as managing risk, ensuring compliance with payment card industry standards, and dealing with fraud and chargebacks. Payment facilitators need to have robust systems and processes in place to manage these challenges effectively.