What is Payment Facilitator (PayFac)? | Payments Glossary

A Payment Facilitator (PayFac) is a service provider registered with card networks that processes payments on behalf of its sub-merchants under a single master Merchant ID (MID).

PayFacs handle merchant onboarding, underwriting, KYC/AML compliance, and fund disbursement. This model enables platforms and marketplaces to offer embedded payment acceptance without requiring each sub-merchant to establish their own acquiring relationship. Examples include Stripe (for platforms) and Square (for SMBs).