Sometimes, businesses build products and hope customers will buy them. Sometimes, they find out what their customers need and work to build that, instead.
The latter approach has given birth to the payment facilitator model, which has sought to remove barriers for all types and sizes of merchants that want to accept payments.
And it’s also the approach for industry players that have evolved to support the PF model. The latest example of this is Payrix, a new company launching a full-service payment facilitator platform.
Payrix co-founder Benny Silberstein and his partners had managed an ISO since 2008. Three years ago, as part of their business planning, they were talking about what some of the big players in the fintech space, such as Square and Stripe, were doing to quickly board and aggregate merchants.
They were initially seeking to identify threats to their business, but soon realized that, rather than considering these companies’ approach a threat, they should view it as an opportunity.
At the same time, they were hearing from clients who were looking for something different. Silberstein cited the example of a client that served nonprofit organizations looking to raise money for a specific goal in brief, possibly two to three-day fundraising campaigns.
With their company’s business model at the time, the need to board the organizations with individual merchant accounts for such brief campaigns was an overly cumbersome process.
“In short, it got very painful,” Silberstein said.
Seeing that limitations in their own business model were driving the clients they wanted to serve to seek easier solutions from other payments providers led the partners to see what else they could do.
“Ultimately, the way I see it,” Silberstein told PaymentFacilitator.com, “the ISO payments business the way we know it is not going to last longer than another 8 to 10 years as it is today. It is shifting over to some sort of integrated solution. It becomes about offering more than just savings on rates.”
Silberstein and his partners talked with processor Vantiv, who could provide the processing services they needed, but told them that payment facilitators were building their own technology platforms. That’s when they decided where their focus should be.
The group expanded their technology team to build out a new solution. They certified with Vantiv and began boarding clients to test the platform about a year ago.
The Payrix solution is designed to be an end-to-end platform that allows payment facilitators to integrate payment acceptance into their own solutions and go live quickly. It handles the PF experience from merchant onboarding and underwriting to compliance requirements to gateway services, payouts, and chargebacks.
“Coming from the ISO world, we did everything manually,” he said. “We looked at what processes we had been doing, and we said, ‘how can we automate that? How can we leverage other startups that are out there doing fraud controls, doing AML, and use their APIs to help automate things?’”
The company is primarily working with ISOs interested in pursuing the PF business model as well as ISVs who are interested in accepting payments.
“Our goal, as the industry looks toward payment facilitators, is to be there and help all these platforms get going, to get that head start,” Silberstein said.