Just because a business adopts a payment facilitator business model, that doesn’t mean that its executives let those new procedures touch every aspect of their business. But not doing so can literally cost a business money by robbing it of some of the benefits that initially attracted those execs to the PF model.

New PF companies run that risk “if we don’t do a good job of building the metrics that measure the success of our throughput, as in how many apps an hour, what volumes are we looking at, what SIC codes?” said Joni Floyd, a 35-year veteran ISO exec, who penned a column about these conundrums last week, in our new podcast.

“A lot of times, the financial operations or the settlement accounting of an organization doesn’t really change when you go from a strict direct merchant to a sub-merchant model. All of the chargeback fees might be dropped into the same general ledger account. Sub-merchant and direct merchant losses might not be recorded correctly,” Floyd said. “One of the challenges to the back-office of the operation, in parallel with implementing the payment facilitator model, is making sure that our financial operations team records the expenses relative to both direct merchants and sub-merchants so that we don’t overburden our sub-merchant categories with expenses that don’t pertain to them, like chargebacks, write-offs due to risk or bankruptcies.”

Deana Rich, a 25-year veteran risk fraud and compliance specialist, offers an example of delaying running expensive risk reports on a company until purchase merits merit the cost.

“There is no reason to run all of the checks we would run on a larger merchant prior to the smaller merchant beginning to process. You don’t need to run a Dun & Bradstreet or an Experian business report on a merchant that you don’t expect to have more than just a few transactions,” Rich said. “If you wait to do that until their volume warrants it, you save yourself money during the underwriting process but you don’t lose any benefit because you are waiting until you actually need the information from that report to actually go out and get it.”

But Floyd and Rich delve into these issues on PaymentFacilitator.com’s first podcast, available now. When advocating for PFs to be wise about how they deploy their resources, we also respect their time. Hence, our policy is to keep our weekly podcasts to fewer than 10 minutes. This first one comes in shy of nine minutes so please visit if this issue interests you.