PayFac
Category: Payments
Also searched as: Payment facilitator
Definition (plain English)
A payment facilitator lets sub-merchants accept payments under a master acquiring setup instead of each merchant contracting directly with an acquirer.
Why it matters commercially
PayFac models can speed onboarding but create underwriting, settlement, dispute, fraud, and merchant-of-record responsibilities that must be controlled.
Example
A marketplace chose a PayFac setup so small vendors could sell quickly, then added reserve rules for high-risk categories.
Common mistake
Assuming PayFac means payment risk disappears rather than shifting onboarding, fraud, chargeback, and compliance obligations to the platform.
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Payment Terms Cost / Risk Calculator
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