The Road to an Integrated Payments Partnership:  Referral Partner, PayFac or ISO?

Connecting customers to trustworthy payment options is a win-win for you and your customers. With an integrated payments partnership, you don’t need endless development hours or a huge IT staff to get started. Several viable business models can make this happen: referral partnerships, becoming a PayFac or becoming an ISO.

Why Some opt for a Referral Partnership

In a referral partnership, you refer your customers to your integrated payments partner and they handle the rest. You stay focused on your principal business –– with a powerful partner handling payments by your side.

Pros:

• Easy residual income
• Out of scope of PCI Compliance
• No fraud liability

Cons:

• Less brand recognition since your integrated payments partner will handle all payments sales and marketing.

The Advantages of the PayFac Model

A payment facilitator (PayFac) supplies clients with merchant accounts under its own merchant identification number (MID). This model saves your customers the lengthy approval process normally associated with merchant accounts and puts you in the driver’s seat controlling the entire sales and operations process.

Pros:

• Total control of your business model and brand
• Ability to set transaction fees and rates
• In-house underwriting

Cons:

• Fraud and chargeback liability
• Increased responsibilities toward sub-merchants
• Expensive to setup and maintain

What It Means To Be an Independent Sales Organization

As an independent sales organization (ISO), you’re all about selling merchant accounts and services to other businesses. You might supplement this with up-to-date tech, but most of your money comes from being the middleman.

Pros:

• Can sell merchant services under your brand
• Less risk for fraud liability, chargebacks and PCI-DSS compliance

Cons:

• No control over onboarding and underwriting
• Clauses for minimal transaction amounts
• Expensive to setup and maintain

The Beauty of a Hybrid Approach

Which model is best for your business? Actually, you don’t have to choose a rigid template. Hybrid models let you select the right aspects of each. At Paragon Payment Solutions, we give our partners adaptable solutions and go the extra mile to build your business as well as ours.

• Superior customer retention
• Flexible branding options to foster brand loyalty towards you
• Residual income for growth

Get in touch with our industry pros to get started setting up a custom integrated payments partnership.