How PayFacs Use Payments to Reshape the Digital Economy

Payment facilitators, or PayFacs, quietly lead a revolution at the heart of the digital economy. At the center of this shakeup lies embedded finance, encompassing the integration of payments, banking and credit solutions into retail platforms, including online marketplaces and business software solutions.NEW WAYS TO PAY: Businesses can use PayFacs to introduce new types of payments, such as subscriptions or BNPL.

PayFacs allow merchants, marketplaces and software platforms to integrate sophisticated payments capabilities directly into products. This integration means end users can transact seamlessly without leaving a merchant’s app, website or software platform.

These are just a few of the insights explored in “The PayFac Economy and the Embedded Payments Revolution,” a PYMNTS Intelligence and Carat from Fiserv collaboration. This report examines how PayFacs power embedded payments, changing the game for merchants and marketplaces and unlocking new sources of value for businesses.

PayFacs create new levels of engagement with end users.SEAMLESS TRANSACTING: PayFacs make it possible for consumers to transact without ever leaving a merchant’s website.

PayFacs allow retail platforms, business software and other online businesses to embed payments into customer workflows and capture new revenue sources from existing customers. For example, a business software provider can offer subscription models or loyalty programs seamlessly embedded into its applications.

Businesses can monetize engagement in new ways that add value.

Monetizing end-user engagement is about creating a “win-win” for the PayFac and businesses in the ecosystem. The key is to align these engagement strategies with revenue generation goals while providing added value to end users.VALUE ADD: PayFacs offer risk management tools and compliance support, mitigating financial and regulatory risks.

PayFacs unlock new business models that reach new customers.

PayFacs offer businesses the ability to embed payments and credit into customer workflows. This unlocks new ways for those businesses to reach new markets, customers and geographies at scale. For example, businesses that once relied on wholesalers and distributors to reach end users can now go directly to consumers using the web and apps and capture payment directly from those new buyers.

The game has changed, thanks to PayFacs. Seamless embedded payments experiences are no longer the exclusive realm of megabanks and tech giants. Download the report to learn more about how payment facilitators can help businesses harness new growth and monetization made possible by embedded payments.