A Payment Facilitator, commonly abbreviated as PayFac, is a type of merchant services provider that processes payments on behalf of other businesses — called sub-merchants — under its own master merchant account. Instead of each sub-merchant establishing a direct relationship with an acquiring bank, the PayFac acts as the merchant of record and takes responsibility for onboarding, underwriting, transaction monitoring, and fund settlement to its sub-merchants. This model was popularised by companies like Square and Stripe, which made it possible for small businesses to start accepting payments in minutes rather than the days or weeks required by traditional merchant account applications.
The PayFac model carries significant responsibility. Because the PayFac is the merchant of record with the acquiring bank, it bears liability for the transactions processed by its sub-merchants. If a sub-merchant commits fraud, generates excessive chargebacks, or violates card network rules, the PayFac is on the hook. This is why PayFacs must perform their own KYC (Know Your Customer) due diligence, implement transaction monitoring and risk management, and maintain reserves to cover potential losses. Becoming a registered PayFac requires approval from the card networks, compliance with PCI DSS, and ongoing regulatory obligations.
For platforms and marketplaces, the PayFac model is attractive because it gives them control over the merchant experience — onboarding, pricing, branding, and payout timing can all be customised. However, building and maintaining a full PayFac operation is a substantial undertaking. It requires regulatory registration, compliance infrastructure, risk and underwriting teams, reserve capital, and ongoing audits. Many platforms discover that the operational burden of being a PayFac exceeds what they anticipated, particularly as they scale into new markets with different regulatory requirements.
Shuttle Global offers an alternative path for platforms that want PayFac-like control without the full PayFac burden. Through Shuttle’s Embedded Payments, platforms can white-label the payment experience, control merchant onboarding flows, and offer payment acceptance to their customers — while Shuttle handles the underlying PSP connectivity, PCI compliance, and transaction routing across 40+ providers. Platforms that have already registered as PayFacs can use Shuttle as their processing and routing infrastructure. Platforms that have not can leverage Shuttle’s connections to PSPs that offer managed PayFac or marketplace solutions, gaining many of the same benefits without the regulatory registration. Either way, Shuttle’s PSP-neutral layer means the platform is not locked into a single acquirer’s PayFac programme.