Usually, the process of setting up a payment facilitator starts with the search for an acquiring partner. Often if you do not clarify all the necessary details in advance, the process of integration and implementation of your payment facilitation project may become overcomplicated and full of unpleasant surprises.
In this article we decided to address several important questions which you should clarify first and foremost. As we explained in several of our previous articles, any integration project has two sides: business and technical. So, after the business part of your payment facilitation project is settled, you should address several important issues in order be able to go through the technical part of the project smoothly.
Payment facilitation project: MID issuing mechanism
One of the first questions is how merchant IDs are going to get assigned. There are three conceptual approaches:
- A unified single MID is provided by the acquirer/processor to the payment facilitator. Under this MID transactions of all the PayFac’s sub-merchants are going to be processed.
- A batch of pre-allocated MIDs is issued by the acquirer/processor to the payment facilitator to be distributed among its sub-merchants.
- A separate MID is to be procured by the PayFac for each of its sub-merchants at the time of onboarding.
When onboarding is performed for each single merchant (MIDs are issued on per-merchant basis, as described in the third of the above-listed cases), the processor, usually, has the information about merchants in its system, that is needed for reporting and monitoring operations. However, in each of the first two cases, the processor will, most probably, expect the payment facilitator to assume the functions of merchant monitoring and underwriting. It means that prior to implementation of your payment facilitation project you need to clarify, which of the three models is going to be used, and what the processor’s expectations are. Thus, you will be able to organize all respective processes (either manual or performed through some services) in advance.
Payment facilitation project: connection means
Another technical question to clarify is how connectivity is going to be organized (whether VPN or any other means on top of standard over-the-Internet connection are necessary).
If some additional connectivity means are needed, their implementation increases the overall payment facilitation project time. Consequently, once you realize that such means will be required, you need to adjust the project implementation terms and deadlines accordingly.
Payment facilitation project: availability of reporting data
The next important question is which reports (on transaction processing and funding, as well as on deposits made by a merchant or the payment facilitator) are available and what information they contain.
For example: will you be able to get complete lists of transactions settled and funded, interchange amounts, assessment amounts? Will you be able to get the lists of interchange and assessment amounts on per-transaction, per-merchant basis, or only for the payment facilitator as a whole? Information of such kind is often needed for further accounting reconciliation and for offering of the most adequate pricing models to merchants. That is why reporting-related matters should be clarified in advance, before significant development efforts have been made.
Payment facilitation project: terminal solutions
If you are going to handle a lot of card-present transactions and use payment terminal solutions, then you need to clarify, how EMV certification is going to be performed and how the processor’s system is going to perform payment terminal on-boarding. These processes, definitely, cannot be performed manually, so for a payment facilitation project implemented in retail or restaurant industry it is important to verify that the terminals are properly provisioned in the processor’s system.
Before starting a payment facilitation project you need to address several important questions, related to MID issuing, connection means, reporting, and terminal solutions, in order to avoid unnecessary losses of resources on further phases of project implementation.
You are always welcome to consult our payment experts at UniPay Gateway regarding the details of your particular payment facilitation project implementation.