Partners are an integral part of the fintech ecosystem and are helping to shape the fintech landscape both in the present and in the future. Independent Sales Organizations (ISOs) and Payment Facilitators (PayFacs) are two kinds of partners that help connect merchants and businesses to payment services.
What Are ISOs and PayFacs?
ISOs act as a middle-man in the payments world, helping to contract and manage payment services for their merchants. ISOs interact with payment service providers directly to help manage the financial needs of their merchants. Fees are charged to the merchants based on transaction volume. Larger businesses or merchants with higher transaction volumes tend to use ISOs for their services.
PayFacs are organized differently. PayFacs help to facilitate payments for their merchants. They provide a narrower range of services. PayFacs partner with service providers like fintechs to contract and settle on behalf of their merchants. Smaller businesses or merchants with a lower transaction volume use PayFacs. PayFacs usually have a flat fee pricing structure.
Merchants and businesses across the world work with partners to simplify their business and avoid the process of account management and financial integration. Partners enable business owners to focus on what matters most for the business and leave the financial side of business management to other payment professionals.
Partners Shaping the Fintech Landscape
Partners are shaping the fintech landscape by enabling a broader group of merchants to access the financial services that fintech companies provide. Whenever a new or established business seeks to sell a product or a service to their customers, they must integrate with banking networks and card acquirers in order to make payments and disbursements. This becomes crucial when the business has cross-border transactions, or operates within multiple countries.
A certain level of risk management is involved. Integrating into traditional financial networks using traditional methods can prove to be costly and time-consuming. Business owners must consider the opportunity cost and impact to their business and how working with a PayFac or ISO partner could alleviate this impact.
When a merchant or business works with an ISO or a PayFac, they easily gain access to necessary financial integrations. Most partners also work with fintech companies for the ease of use, streamlined integration, and clear onboarding processes.
Fintech companies provide a viable alternative to the time and effort required with traditional financial networks. Rapyd provides the smooth integration that partners seek. The merchants that work with partners can easily gain access to a global financial network that enables businesses to have payments their way, disburse funds globally, use payment links, utilize fraud prevention, design hosted checkout pages and more. Explore the Rapyd API, which provides the best solutions in payments.
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