The Green Sheet Online Edition
September 09, 2019 • Issue 19:09:01
Speed, simplicity and elegance for payfacs
NMI enhanced FACe (short for FACenablement), a platform purpose-built for payment facilitators (payfacs). The comprehensive platform and technology suite support numerous tasks related to sub-merchant management. These features, integrated with NMI's payment gateway, include sub-merchant onboarding, know-your-customer (KYC) compliance, accounting, billing, chargebacks, reporting and online statements.
"FACe is a white-label, turnkey product designed to help companies manage the technical side of being a payfac," said Nick Starai, chief strategy officer at NMI. "Sub-merchant activation is fast because a majority of underwriting is done in real time during the onboarding process."
Starai suggested that ISOs that understand and embrace software, and ISVs that operate in vertical segments with low-risk merchant profiles, are good candidates to become payfacs. However, not all new entrants are aware of the complexities and challenges of building payment facilitation infrastructure. He cited the following considerations:
- One-stop payment processing: Payfac end-to-end processing must support multiple payments. FACe all-in-one processing solution accepts major card brands and numerous payment schemes.
- Secure sign-up: Payfacs must create online applications, apps or software for sub-merchant signups, ideally with an authentication model to protect the sign-up process. The FACe onboarding kit, with KYC integration, automates new account activations. Payfacs can log into a secure web portal to create a sub-merchant account and gateway account in a single step.
- Gateway: Payfacs have to write software to certify card-present and/or card-not-present transactions. Obtaining certification for authorization and switching can take between six to nine months to complete. FACe is fully integrated into NMI's gateway.
- Accounting system: Creating accounting, billing and reconciliation systems can be challenging. Billing statements must match payfac accounting systems to help merchants understand their charges. FACe charges credit card processing and gateway fees set by payfacs and routes settlements directly to sub-merchant bank accounts.
- Enhanced reporting: Payfacs must provide accessible, multitiered reports to participants at all levels. FACe provides payfacs with detailed consolidated statements and sub-merchants with reconciliation, chargeback notifications and chargeback importations.
- Chargeback management: Payfacs manage chargebacks differently than traditional acquirers. Payfacs are a master merchants, so all chargebacks go against them. It's critical to dispatch messages to sub-merchants and collect any chargeback fees. FACe automates chargeback importation and notification to payment facilitators and sub-merchants.
- Security: Achieving and sustaining Level 1 PCI certification can be costly and time-consuming. NMI, a validated PCI DSS Level 1 Service provider, consistently maintains the highest levels of security. The FACe platform provides tools for KYC compliance management and reporting.
- Redundancy: Payfacs can't run on a single server. They need high redundancy and regional scaling, all of which FACe provides.
All-in-one, out-of-box solution
The FACe platform is designed to help payfacs efficiently manage their businesses and reduce go-to-market time. The platform offers payfacs an array of value-added services for boarding and servicing merchants. Starai summarized the FACe platform's core values as speed, simplicity and elegance.
"Remove friction from the traditional merchant acquiring process and the ISO continues to grow while providing tremendous value and easy to integrate payments into vertical software," he said. "Thinking forward, there will be no such thing as a merchant account. It will come with your software. Just turn it on."
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