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Table of Contents

Lead Story

Global digital payments beckon

Patti Murphy


Industry Update

Betting on ATMs, PAI sells acquiring arm to Clearent

Petro retailers 'low-hanging fruit' in Verifone intrusion

Mastercard, Oracle expand cross-channel initiative

SEC charges former iPayment execs, ex-CEO under fire


European hoteliers get tech savvy

Mark Dunn


Merchant first, service second

Dale S. Laszig
DSL Direct LLC

Thoughts on the future of payments (and the wine biz)

Brandes Elitch
CrossCheck Inc.


Street SmartsSM:
Keep fighting, keep innovating, keep closing

John Tucker
1st Capital Loans LLC

A legal take on the rise of legitimate aggregation

Adam Atlas
Attorney at Law

Company Profile

Ingenico Group

New Products

Secure, international B2B receivables

Global B2B receivables

Versatile solutions to expand capabilities, reduce PCI scope

Semi-integrated Solutions
ExaDigm Inc.


Selling during merchants' slow times


Readers Speak

Letter from the editors

Resource Guide


Skyscraper Ad

The Green Sheet Online Edition

March 27, 2017  •  Issue 17:03:02

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Legal ease:
A legal take on the rise of legitimate aggregation

By Adam Atlas

It used to be unacceptable to process transactions for multiple merchants through a single account; now everyone is doing it with payment facilitators (payfacs) and payment service providers. In this article, I'll discuss legal issues pertaining to this new, legitimate form of aggregation, which a number of payfacs consider or use as a solution for the payments element of their business ideas.

What is a payfac?

A payfac is a relatively new form of registration with the payment networks that allows an entity to acquire payment card transactions for multiple sub-merchants through a single master merchant account. In plain English, a payfac has its own merchant account that it can use to process transactions for multiple merchants. Those merchants are often called sub-merchants, each of which has a separate merchant identification number. Merchants who reach $100,000 in processing volume are no longer aggregated and become direct merchants with acquirers.

Advantages of payfacs

Payfacs enjoy certain advantages:

Disadvantages of payfacs

Following are some disadvantages to the payfac model:

Payfac contracts

The various payfac business relationships require distinct contract terms.

Payfacs are an excellent innovation well worth investigating, both for new fintechs and established ISOs. Visa provides useful reading on payfacs here:

In publishing The Green Sheet, neither the author nor the publisher is engaged in rendering legal, accounting or other professional services. If you require legal advice or other expert assistance, seek the services of a competent professional. For further information on this article, email Adam Atlas, Attorney at Law, at or call him at 514-842-0886.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | Harbortouch | USAePay | Humboldt Merchant Services | Impact Paysystems