How a SaaS Platform Can Profit from Credit Card Processing

on Mar29
SaaS platform
Written by
James Davis
Written by James Davis
Senior Technical Writer at United Thinkers

Author of the Paylosophy blog, a veteran writer, and a stock analyst with extensive knowledge and experience in the financial services industry that allows me to cover the latest payment industry news, developments, and insights. Read more

SaaS platform
Reviewed by
Kathrine Pensatori
Product Specialist at United Thinkers

Product specialist with more than 10 years of experience in the Payment Processing Industry. I help payment facilitators and PSPs solve their various payment processing issues. Read more


In this article we will revisit some details of becoming a payment facilitator in the case of a SaaS platform. As we wrote in several previous articles, some companies are pre-disposed to becoming PayFacs. These include SaaS companies, venture capital and private equity firms, franchisors, marketplace owners, ISVs, and wholesale ISO. Does your company have an established customer base and some KYC logic in place? Well, congratulations, you are already a few steps closer to PayFac model implementation than others are.

Now, back to SaaS platforms.

Traditional and Improved SaaS Platform Paradigms

Under traditional SaaS model, SaaS companies developed and offered payment software. Customers of these companies licensed the software and used it on subscription basis. So, respective subscription and licensing fees provided the basis of SaaS companies’ revenues.

Nowadays SaaS companies can partake of transaction processing revenues. We should stress, that MC and visa interchange fees that card networks charge remain intact. Payment processor also retains its role in the food chain. That is, SaaS platforms are not taking any part of their revenues. However, a SaaS platform can take part in the underwriting process. It can offer payment services under its own brand and generate profit from its share of payment processing fees. As we wrote in the respective article {link}, SaaS companies can achieve this objective through becoming PayFacs.

Becoming a PayFac for a SaaS Company

Becoming a PayFac is a tedious procedure, even for a SaaS company. It requires considerable upfront investments, certification, and integration efforts. First and foremost, the SaaS platform has to get certified as a PayFac by an authorized acquirer. Then, it has to build relationships with target banks, processors, and platforms.

If you (i.e. the SaaS platform provider) go through all the necessary steps, you will be entitled to a considerable share of fees, paid by merchants. That is, part of merchant credit card processing fees sometimes called payment facilitation fees. After all, a PayFac takes actively participates in the whole merchant lifecycle. From underwriting and onboarding to balance reconciliation and transaction settlement. From merchant funding to chargeback management.

On the other hand, greater revenues mean greater responsibility and risk. As a PayFac, you sign a lot of additional agreements with new partners and become financially liable for sub-merchants’ operations. And, if you onboard high-risk merchants and partner with high risk payment processors, the risks grow even higher.

White Label PayFac Options for a SaaS Platform

Often, a SaaS platform is not ready to assume all PayFac-specific risks and responsibilities all at once. In this case, it can resort to in-between options. In our respective articles we described such try-it-before-buy-it models as virtual and white-label payment facilitator .

 Presently, one of the solutions that simplifies the entire process of becoming a PayFac is a white label payment gateway. With a white label PayFac gateway, a SaaS company can receive all the benefits of a traditional PayFac. A white label PayFac gateway is a powerful image-booster. It is also a point of connection to Amex, Visa or mastercard network through its already existing and available partner integrations. At the same time, the process of becoming a PayFac for this company gets less costly and time-consuming.


There are several strategies a SaaS company can follow in order to benefit from credit card processing. Becoming a full-fledged payment facilitator is an alluring project, but it is also a risky and costly one. Integration with a white label PayFac gateway technology, such as UniPay Gateway by United Thinkers, considerably simplifies the process.

Contact our payment experts to learn, how a white label PayFac gateway partnership can increase your revenues.

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