What is a Payfac?

A guide to payment facilitation

Finding the right payment facilitator (Payfac) is a crucial step in setting up a successful ecommerce business. If you run a business and want to make it easier for customers, then you should consider using a payment facilitation service.

Payment facilitation is a service that allows businesses to accept payments from their customers in a variety of ways. This can include card payments, direct debit payments, and online payments.

There are a number of reasons why you might want to use a payment facilitation service. These include:

  • To make it easier for your customers to pay you
  • To reduce the amount of administration that you need to do

In this guide, we will explore how payment facilitators (Payfacs) work, why they are needed, and how they compare to independent sales organisations (ISOs) and traditional acquisition.

What is a Payfac?

Payment facilitation (Payfac) is a service that allows businesses to accept payments from their customers in a variety of ways. This can include card payments, direct debit payments, and online payments.

Payfac is the abbreviated term often used in the payments industry to describe a company that provides payment processing services to businesses. This includes payment processors, merchant services providers, and credit card processors.

Payfac in text visual 1

How do Payfacs work?

There are a few ways that a Payfac can work. The most common way is that the Payfac will act as a middleman between your business and the bank. The Payfac will process the payments for the merchant, and then the merchant will be able to access those funds. Another way that a Payfac can work is by acting as a merchant account provider. This means that the Payfac will provide the merchant with a merchant account, and then the merchant will be able to process payments through that account.

If you are running an online business, there are two types of merchant accounts that you can get from a Payfac – either a payment service provider (PSP) or an independent sales organisation (ISO). As a rule of thumb, if you turnover less than one million € annually, then a PSP would be best suited to your business.

Payfacs provide PSP merchant accounts through a simplified enrollment process. In the past, it could take weeks and months to get a merchant account. Nowadays, it is quick and easy to start selling online as Payfacs will provide businesses with sub-merchant platforms.

Once you have set up your/a sub-merchant platform, the Payfac takes responsibility of setting up and managing relationships with different payment methods, freeing up time for you to focus on other parts of your business to help drive growth.

EU Payfacs dashboard

Why do merchants need Payfacs?

Payfacs came into popularity in the late 1990s as a solution to help SMEs easily accept payments online. Before this, bank’s usually only served larger businesses that could handle (and afford) the complex, time-consuming, and costly setup process. This wasted valuable time they could have spent on building their business and products.

As a payment service provider, we here at Mollie are a Payfac. That means we can be incredibly helpful for small- to medium-sized businesses to simplify the process of setting up all of the payment methods needed for your website. We provide secure ecommerce payment methods for WooCommerce, Magento, Wix, and more in one simple contract and integration.


Quick and easy payments are essential to running a successful online business. In order to increase conversions and revenue, online businesses need to make it quick and easy for customers to complete/make a purchase. Payfacs ensure that any growing business can offer multiple payment methods to their customers.

Payfacs help SMEs compete with larger businesses and provide customers with a wider range of payment options. At Mollie, for example, we provide credit card payments, PayPal, Apple Pay, Klarna: Slice it, Klarna: Pay later, and more.

If you’re looking to grow your business quickly, Payfacs are a great way to easily to offer your customers’ preferred payment options.

Get better payments now.