What’s Next for the PayFac Model

The model established by payment facilitators—known as PayFacs—enabled millions of businesses to accept a range of payments. Now, however, the model is maturing, prompting PayFacs to look at other avenues for growth and to deepen their merchant relationships. This Javelin Strategy & Research report details how PayFacs, and the technology companies that enable their operations, can get there.

Even as PayFacs find new targets for growth, they should take steps to evolve their offerings to become a one-stop shop for merchants’ needs. PayFacs are central to submerchants’ ability to operate by handling their payments, which PayFacs can use as a launching pad to other services. Building out a wide array of solutions will give PayFacs a way to evolve and thrive.

Key questions discussed in this report:

• How can the PayFac model grow as it is maturing?
• What are PayFacs doing to expand their operations and deepen their ties with merchants?
• What are the enablers of PayFacs—acquirers, processors, and payment technology companies—doing to help more companies become PayFacs and succeed?

Companies mentioned:

Adyen, Block, FIS, Fiserv, Mastercard, PayPal, Payrix, Square, Stripe, Toast, Visa