How to Get Started With a Cryptocurrency Payment Facilitator
Have you ever thought that there are too many ways to pay online? Different banks, different payment systems, online wallets, gateways, oh my, it's a veritable financial maze. And what about cryptocurrencies? The number of crypto users is growing, and integrating crypto into an already confusing maze is no easy task. For users, it's not a problem. But for businesses, it's a real headache. Companies and charities are turning to payment facilitators (or simply PayFacs) to deal with all this.
What is a PayFac
A Payment Facilitator (PayFac) serves as a link between merchants, payment processors, and financial institutions. It simplifies the process of accepting various payment methods, including credit cards, e-wallets, and cryptocurrencies. By doing so, PayFacs can significantly reduce the time and effort required for merchants to onboard payment processors.
Suppose you have a store and want to accept cards or other electronic payments from customers. Instead of dealing directly with a bank or payment processor, which can be difficult and costly, you can contact a Payment Facilitator. He already has all the necessary agreements with banks, and he has a system for processing payments.
What is a PayFac model? The key functions of a PayFac include handling underwriting, ensuring compliance with relevant regulations, and providing customer service on behalf of the merchants. These services allow businesses to focus on growth rather than the intricacies of payment processing.
The Fusion of Cryptocurrency and the PayFac Model
The integration of cryptocurrencies with the PayFac model is a significant development in modern payment systems. Digital currencies offer immediate settlement and reduced fraud risk, making them an attractive addition to traditional payment methods.
PayFacs can enable quicker, more transparent transactions and provide merchants access to a worldwide consumer base by integrating cryptocurrencies into their product offerings. Additionally, this breakthrough expands financial inclusion to areas where access to other financial services may be restricted.
We often mention that accepting crypto today is not even a competitive advantage but a must-have. Businesses that don’t have it, lose.
The combination of cryptocurrencies with the PayFac aligns well with the current trends in global commerce, offering both consumers and businesses more efficient and accessible ways to transact.
How to Become a Payment Facilitator: PayFac Requirements
Becoming a Payment Facilitator involves understanding and meeting specific requirements. This often includes adhering to regulations, developing the necessary technical infrastructure, and forming relationships with banks and payment processors.
- Regulatory Compliance. Each jurisdiction may have its own rules and regulations regarding payment processing. Understanding these regulations is crucial to legally operating as a PayFac.
- Technical Development. To successfully manage payments, platforms must choose a platform or create a new one. To enable transactions, the architecture needs to be reliable and secure.
- Financial Partnerships. Collaborating with banks and payment processors ensures the smooth flow of funds between parties. Understanding these relationships is vital to PayFac's success.
Related Tilled guide: Five steps to launch and grow your PayFac business
Becoming a Payment Facilitator
So, you are meeting the requirements? Fine! But that’s not enough. How to become a PayFac now? Once the requirements are understood, the next step involves executing a plan to become a PayFac.
Register with an acquiring bank. An acquiring bank is a financial institution that provides the infrastructure and services to process credit and debit card payments. When you register with an acquiring bank, you will be granted the authority to process payments on behalf of your sub-merchants.
Obtain PCI DSS compliance. The Payment Card Industry Data Security Standard (PCI DSS) is a set of security requirements for organizations that store, process, or transmit cardholder data. If you want to become a PayFac, you will need to be PCI DSS compliant.
Choose a payment gateway. Thanks to a payment gateway, you can take payments from your subsidiary merchants. Make sure the payment gateway you use complies with your security and compliance standards and is compatible with your acquiring bank.
Set up merchant management systems. You will need to set up systems to manage your sub-merchants, including onboarding, fraud detection, and chargeback management.
Write and implement underwriting and compliance policies. You will need to have policies in place to ensure that your sub-merchants are legitimate and that they comply with all applicable laws and regulations.
Once everything is in place, launching the service and continuously evaluating and scaling the platform as needed will be ongoing tasks.
Advanced PayFac Models: What is PayFac as a Service
Beyond the conventional Payment Facilitator paradigm, PayFac as a Service (PaaS) offers a scalable option for organizations. It is a platform made available by a third party that handles all the intricate details of processing payments. This is how businesses can incorporate payment options without becoming PayFacs themselves.
Leveraging Cryptocurrency with the PayFac Model
The integration of cryptocurrencies within both traditional and advanced PayFac models adds an extra layer of functionality and reach.
- Implementing crypto. Cryptocurrencies allow PayFacs to reach markets previously inaccessible due to currency restrictions or banking limitations.
- Enhancing security. Cryptographic techniques used in digital currencies add a layer of security to transactions, reducing fraud risks.
- Facilitating instant settlements. Cryptocurrencies can offer near-instantaneous settlements, speeding up the transaction process.
- Cost-effectiveness. By bypassing some conventionally unprofitable channels, cryptocurrency transactions may offer a more cost-effective solution for both merchants and consumers.
Setting Up with Whitepay: Integrating Cryptocurrency into Your PayFac Model
Whitepay stands as a leader in crypto payments solutions, not as a payment facilitator but as an enabler for businesses wanting to venture into the world of digital currencies.
We offer a simple and convenient way to accept cryptocurrency for payment. Over 140 digital assets are available for payment with our solutions. At the same time, you do not need to be an expert in cryptocurrency, and you do not need to have 140 different crypto accounts in order to store funds. Payment is quick and easy in a few seconds, and the assets received for payment can be automatically converted into one of the cryptocurrencies convenient for you or into a fiat currency (for example, GBP or EUR).
There are already dozens of businesses and non-profit organizations among our clients, including Tabletochki, Rescue Now, Stylus, MebelOK Join UP and others.
Whitepay Integrations for Your Business
Whitepay's expertise lies in offering versatile crypto payment solutions that fit various business and charity models. Customizable integration enables merchants to align Whitepay's platform with their particular requirements, thus opening the gateway to accepting cryptocurrencies.
The global reach provided by accepting cryptocurrencies through our platform puts businesses on an international stage. Currency barriers dissolve, making way for a truly worldwide audience.
With Whitepay, integration goes beyond mere transaction processing. It's about creating a cohesive ecosystem where businesses and Payment facilitators can thrive, innovate, and expand.
Ensuring Compliance and Secure Transactions
Ensuring compliance with legislation occurs before the collaboration begins and ultimately permeates every operation. The Whitepay system is designed to monitor and comply with international and EU standards, keeping every payment within the law.
But compliance doesn't overshadow the need for security. Whitepay's platform is fortified with state-of-the-art cryptographic techniques. This robust security framework guarantees that every transaction is shielded from potential threats, maintaining integrity and building trust.
Contact us to get your crypto payment solution!