If you’re a Payfac, it’s important to be familiar with the key payment terms used in the payments industry. This will help you better understand and explain your business to your boss and impress them with your knowledge of the industry. This blog post will go over the top seven key payment terms that every Payfac should know.
Comprehensive Guide To What A Payfac Is
Payfacs handles every aspect of the transaction experience for their clients, from vendor deals to after-sales service. Therefore, they are responsible for every part of the payment experience.
Key terms you should know when working with Payfac:
Merchant ID: This is the unique identifier for your business. You will need to provide this to your Payfac to set up payments.
Payment Facilitator: This is the company that will process your payment transactions. You will need to choose a Payfac that is compatible with your business.
Payment Processor: This is the company that will process your payments. You will need to choose a payment processor compatible with your Payfac.
Reserves: Before finalized payments are put In a merchant’s financial institution, a momentary restriction is placed on the part of the payments. Payment processors use reserves to reduce the peril of financial obligation. Refunds, chargebacks, and automatic clearinghouse (ACH) remittances are handled through reserves.
Settlement: The monies are sent from the cardholder’s bank to a company’s account. The monies are sent from the source to the acquirer via the card issuers (for example, Mastercard, Visa, or American Express). The complete sum of the operation (less any relevant fees) is put into the aggregate merchant’s account after the acquirer gets the money. The payment mediator is the primary record dealer, which implies it collects and distributes every credit card transaction to its sub-merchants.
Issuing Bank: The financial organization that allocates the digital wallet is the issuing bank. This entity is in charge of receiving and transmitting funds from cardholders to the merchant.
Sub-Merchant: These are the ISV’s client base. The main merchant processes all the sub-payments. Although the sub-merchant will not be needed to fill out a standard merchant registration, they will be obliged to receive terms and conditions relating to Know Your Customer (KYC) regulations and Anti-Money Laundering (AML) laws, and US Office of Foreign Asset Control (OFAC) procedures.
Look to Paya for new payment solutions that allow our partners to create fantastic commerce experiences, whether you want to be a payment facilitator or discover more facilitation options like Payfac.
Author Bio: Payment industry guru Taylor Cole is a passionate payments expert who understands the complex world of the aggregate merchant accounts. He also writes non-fiction, on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie with ice cream on his backyard porch, as should all right-thinking people.