What Does It Take To Become A Payment Facilitator?

“If it wasn’t hard, everyone would do it.” So said Tom Hanks in a powerful scene in the classic 1992 baseball movie A League of Their Own. In more than one sense, becoming a registered payment facilitator is not unlike trying to become a major league baseball star. Not only does it take skill and drive and a healthy amount of commitment, it’s a risky and financially challenging endeavor with an uncertain future. On the other hand, for those businesses that successfully navigate the obstacles and become full-fledged, registered payment facilitators, the potential rewards are great and decidedly enviable.  

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What Does It Take To Become A Payment Facilitator?

Aug 12, 2019

What Does It Take To Become A Payment Facilitator?

“If it wasn’t hard, everyone would do it.” So said Tom Hanks in a powerful scene in the classic 1992 baseball movie A League of Their Own. In more than one sense, becoming a registered payment facilitator is not unlike trying to become a major league baseball star. Not only does it take skill and drive and a healthy amount of commitment, it’s a risky and financially challenging endeavor with an uncertain future. On the other hand, for those businesses that successfully navigate the obstacles and become full-fledged, registered payment facilitators, the potential rewards are great and decidedly enviable.

But is becoming a registered payment processor something your business should consider?

As we noted in So You Want to Be a Registered Payment Facilitator?, payment facilitators are able to “remove most of the friction that comes with getting customers set up to accept payments, while also providing a tightly integrated user experience” that leads to a better experience for customers, even as you earn money on transactions and gain new revenue streams. So if you’re a POS provider and you have a product or service you’d like to couple with payments, the payment facilitation business model is likely an attractive proposition, especially if you’re in a relatively low-risk vertical where recurring billing is the norm—property management being a good example. 

A second question is: Do you have what it takes to become a registered payment facilitator?

Not only is it an expensive proposition, it requires specialized skills and knowledge to successfully navigate the process. So unless you’re an ISO in the payments business, you’ll be attempting to learn the ins and outs of a complex industry without the benefit of existing institutional knowledge.

To further help you understand what it takes to become a registered payment facilitator, following is a quick-glance checklist of what’s involved:

- You need to register with each of the four major card brands and pay the requisite fees (annually)
- You need to find a payment processor to sponsor you as a payment facilitator and negotiate a processing agreement
- You need to adopt an underwriting policy and hire people to manage underwriting
- You need to establish a risk management policy and employ people to manage risk
- You need to build a platform on which you can manage your business and all aspects of payment processing (transaction monitoring, funding, reporting, etc.) or partner with a company that has an existing payment facilitation platform
- You need to board sub merchants and begin processing

Moreover, becoming a registered payment facilitator isn’t a finite process and a one-time investment; it requires an ongoing investment of time and money. (Keep in mind that when you’re a payment facilitator, you’re responsible for all of the payments processed by your sub merchants. As such, you need to manage fraud, chargebacks, data breach threats and an ever-changing security landscape.) And as for cost, your initial investment is likely to be six figures, and before long you’ll likely spend even more.

Partnering with a registered payment facilitator

If you find all of the above daunting and scary—or aren’t sure the you want to be responsible for an army of sub merchants—there is another option that allows you to take advantage of many of the benefits of becoming a payment facilitator without actually becoming a full-fledged facilitator. 

By partnering with TSYS® and leveraging our ProPay® platform (a registered payment facilitator) you can create a unique offering in the marketplace. This will not only allow you to enjoy many of the benefits and optimize your customer’s user experience, but will also allow you to incorporate other TSYS products and services into your custom offering. The bottom line is that you can focus on your core business and at the same time reap the benefits of being a payment facilitator.

To learn more about TSYS’s affordable solution, give us a call at 1.888.845.9457. We understand the unique operating environment surrounding payment facilitations and can help you capitalize on growth opportunities.

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