This fall’s PF WORLD 2018 event was intended to educate participants about the considerations behind becoming a payment facilitator and integrating payments into software platforms successfully.
But perhaps the most anticipated session was The Great Debate, in which industry representatives tackled the most fundamental question: should you become a payment facilitator at all?
Mike Frank, head of business development, Integrated Payments, for Worldpay, represented the “for” side of the argument, sharing his thoughts on why a company would want to become a PF. Ralph Dangelmaier, CEO of BlueSnap, opposed him with arguments against taking the PF role on.
The session was moderated by Todd Ablowitz, CEO and founder of Infinicept and Double Diamond Group, and publisher of PaymentFacilitator.
During the session, Frank pointed out that the payment facilitator model is creating benefits for merchants that traditional payment providers do not.
Businesses that offer comprehensive solution sets for specific verticals – “where you’re able to create this holistic journey and approach for your downstream merchants” – add value beyond what legacy provider can offer, he said.
For his part, Dangelmaier argued that businesses are not always well-prepared – that they typically don’t create “road maps” to becoming payment facilitators in the way they would plan development to their software platforms.
According to Dangelmaier, many companies lack the expertise they need to properly manage risk and pay funds out to merchants.
“I run into very few ISVs that actually really understand payment facilitation,” he said.
Dangelmaier noted that – while it is true that companies that offer payments are seeing higher valuations when compared to other software companies – “my argument back is that I don’t think people are really assessing the risk that you’re taking with that extra higher valuation,” he said.
Frank noted that businesses that already have some knowledge of the financial services world will have an easier time transitioning to become a PF than those with no previous understanding.
“It very much depends on where they are in that journey,” he said.
Frank also agreed with the conventional wisdom that businesses that become payment facilitators have more control over the customer experience.
Regarding the role of companies such as Worldpay who work with payment facilitators, “we need to be the entity behind the scenes that is making your brand stand up,” Frank said.
Watch for additional insights from around the payment facilitator ecosystem as we continue to share video from PF WORLD 2018 in future weeks.