As many in the payments industry know, Payment Facilitation is an exciting new model providing significant opportunities for progressive, growth-oriented companies. Stated briefly, Payment Facilitators are merchant service providers that simplify the merchant account enrollment process. They operate on a sub-merchant platform where merchants don’t require their own Merchant IDs (MIDs), but are rather boarded directly under the Payment Facilitators' own master MID.
With “low-friction” boarding, and simplified qualification and management of sub-merchants, organizations can expand their channels and business more cost-efficiently, reach new markets faster, and deliver programs and new merchant value-propositions that would have been too cumbersome to implement with more traditional approaches.
As payment aggregators, companies like Square and Stripe are often regarded as the prototypical Payment Facilitators, but merchants often need more sophisticated capabilities. With comprehensive offerings for Payment Facilitators, Worldpay allows organizations to operate like a Square or Stripe unto themselves, facilitating payments, aggregating sub-merchants, and funding their sub-merchants directly without the need for an intermediary adding complexity and eroding margins.
How Dynamic Payout Works
While there are many facets to Worldpay’s PayFac® offerings, Dynamic Payout is a powerful capability that simplifies the funding of both sub-merchants and the merchant / Payment Facilitator themselves. With Worldpay’s Dynamic Payout, Worldpay funds the Payment Facilitator and its sub-merchants directly. This allows the Payment Facilitator to operate without ever directly handling its sub-merchant’s money.
Sub-merchants of the Payment Facilitator will accept payments as they see fit, in the store, on the web or via mobile devices using one or more of Worldpay’s leading payment solutions. As payments are processed, card brand and eCheck payments settle to a Worldpay owned account.
With funds in the account, the Payment Facilitator then sends funding instructions to Worldpay via managed payout instructions entered via a web interface built for this purpose or a comprehensive Dynamic Payout API. On receipt of funding instructions, Worldpay directly funds the sub-merchants as well as the Payment Facilitator. Worldpay generates daily operational and reconciliation reports, providing a closed-loop transaction life-cycle from payment to sub-merchant payout, avoiding the need for the Payment Facilitator to manage the funds themselves.
A Single Interface for Payments and Payouts
By employing a single interface for both Payments and Payouts, the Payment Facilitator enjoys several advantages:
- They reduce their dependency on multiple vendors, and benefit from a single dashboard giving them full visibility to both payments received from end-customers, and payouts to their sub-merchants and themselves
- They minimize cost associated with PCI compliance by reducing scope. With scope-reducing solutions from Worldpay, Payment Facilitators are never in possession of sensitive customer data
- They improve operations with simplified, consolidated reconciliation
- They side-step accounts receivable risks, and left-shift revenue streams by avoiding the need to invoice and collect from sub-merchants. Payment Facilitators are funded at the same time as the sub-merchants
- They improve customer service to their channels, by avoiding delays in funding sub-merchants for products or services sold
- Finally, by dealing with Worldpay, the Payment Facilitator enjoys faster time to market, reducing additional integration work that would be required with a bank acting as a payout provider.
A short video explaining how Dynamic Payout works is presented here and below.
If your business requires that you to manage and pay other merchants, Worldpay’s PayFac program and supporting technologies and services is worth a look. Contact us to speak to an integration consultant and learn more about Dynamic Payout and other capabilities for Payment Facilitators.
You can also visit Vantiv O.N.E., create an account to view our PayFac community, or join the conversation and learn how Dynamic Payout and other Payment Facilitator solutions from Worldpay can help simplify your business.