Virtual Payment Facilitator Model

on Aug6
virtual payment facilitator model
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
virtual payment facilitator model
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

From this article you will learn:

  • What a virtual payment facilitator model is
  • Why virtual payment facilitator model is a beneficial option for software platforms
  • How to switch from virtual PayFac to real PayFac model

In our previous article we explained how a software platform provider could benefit from implementation of wholesale ISO or payment facilitator model. Many SaaS platform providers, however, find it problematic to go through underwriting procedure. That is why in this article we would like to describe an alternative model, offered by some companies, that can be called a virtual payment facilitator model.

Virtual payment facilitator model: an in-between approach

Under virtual PayFac model the company uses an advanced payment technology and gets all the technical advantages that payment facilitators enjoy without actually having to become one (i.e. go through underwriting process). Underwriting remains the responsibility of the payment service provider that offers virtual payment facilitation service. The PSP still takes care of merchant underwriting and monitoring, but allows the company (platform provider) to control merchant onboarding, funding, chargeback handling, and payment processing itself.

In essence, the PSP that provides virtual payment facilitation services, goes through underwriting procedure itself, works out the terms of partnership with the bank, and becomes a full-fledged PayFac. Through different APIs it provides the software platform provider with almost seamless access to all of the required features. Risk mitigation is ensured through integration with various monitoring services within the platform used by the PSP to offer virtual PayFac services.

The advantage of virtual PayFac model is that it allows the SaaS platform provider to assume the role of a payment facilitator without assuming the burden of responsibility. True, the revenues are smaller than the revenues of a full-fledged payment facilitator, because they have to be shared with the PSP. However, the model allows the SaaS platform owner to significantly reduce upfront costs.

From Virtual PayFac to PayFac

While a virtual payment facilitator model can be a good solution for initial start and for some companies it might, actually, work long-term, others might be wondering “how to go beyond” it and become full-fledged PayFacs. In some cases this might mean re-organization of the whole payment ecosystem, loads of re-certifications and new integrations. However, if you have become a virtual payment facilitator through such platform as UniPay Gateway (available for licensing) then you always have an opportunity to license it and take all the process in-house. Briefly speaking, you will be able to install the UniPay Gateway instance in-house and migrate all your customers to the licensed copy of the platform.

In other words, UniPay allows the platform provider to adjust the fees etc, but the UniPay instance itself is owned by the PSP, however through UniPay Gateway the platform gets access to APIs and financial partnerships (integrations). If your platform is integrated with UniPay Gateway and you decide to implement all the required functions “in-house” and stop paying to the PSP, you can

  • license the product
  • deploy it within your ecosystem
  • go through PCI certification
  • sign a contract directly with the processor on better terms than the ones you currently have with the PSP
  • certify your instance and become a full-fledged payment facilitator without any significant changes
  • migrate your existing customers in-house.


Virtual payment facilitator model, such as the one offered by UniPay Gateway, is a “try it before buy it” option for software platform providers that want to enjoy the benefits of being a payment facilitator without assuming the full set of PayFac-specific responsibilities. It is more beneficial than a wholesale ISO model and it provides an opportunity to make a transition to a full-fledged PayFac model smoothly and seamlessly, without much effort.

If you are a SaaS or POS platform provider, thinking of implementation of payment facilitator model, you are welcome to request free consultations and discuss your particular case with UniPay Gateway experts.

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