Payments glossary
Payment facilitator (PayFac)
A payment facilitator (PayFac) is a provider that onboards merchants as sub-merchants under its own master merchant account, letting them accept card payments quickly without acquiring a merchant account of their own. The PayFac handles onboarding, risk and settlement.
The PayFac model
A payment facilitator holds one master merchant account with an acquiring bank and onboards its customers as sub-merchants beneath it. The card schemes formalised the model because it fixed a real problem: direct merchant accounts involve bank underwriting that small and new businesses struggle to pass quickly. The PayFac absorbs that friction - it vets sub-merchants with standardised KYC checks, registers them with the schemes, aggregates their transactions through its master account, and settles funds onwards.
What the facilitator takes on
Speed for the merchant is risk for the facilitator. Because sub-merchant transactions flow through the PayFac's account, the PayFac is liable to the acquirer for chargebacks, fraud and merchant failure across its whole portfolio. That is why facilitators run onboarding checks, transaction monitoring and sometimes rolling reserves - the tools that make it viable to serve merchants a bank would decline or delay.
PayFac versus direct merchant account
The trade-off is speed and simplicity against control and pricing. Sub-merchants start fast on standardised terms; direct merchant accounts take longer to obtain but bring own-name settlement and individually negotiated rates. LekkaPay operates both models - merchants can onboard quickly under facilitation and move to a direct merchant account as volumes justify it.
Frequently asked questions
How is a payment facilitator different from an acquirer?
The acquirer is the regulated bank that holds card scheme membership and connects to the schemes. A payment facilitator sits on top of an acquirer: it holds a master merchant account and registers its customers as sub-merchants, taking on their onboarding, risk and servicing while the acquirer remains the scheme-facing bank.
How quickly can I start accepting payments through a PayFac?
Onboarding is typically measured in days rather than the weeks a direct merchant account can take, because the facilitator has already done the heavy underwriting with the acquirer and applies standardised checks - KYC and bank verification - to each sub-merchant.
When should a merchant move from a PayFac to a merchant account?
Commonly when volume makes directly negotiated acquiring pricing attractive, or when the business wants settlement in its own name under its own MID. A good provider supports both models and lets merchants graduate without rebuilding their integration.
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