In practice
A payment facilitator signs sub-merchants under its own master merchant relationship with an acquirer, so merchants can start accepting cards quickly. In return the facilitator takes on underwriting and monitoring duties. Many marketplaces and software platforms operate this way.
Common confusion
Fast onboarding does not mean no underwriting; facilitators can freeze funds or close accounts when monitoring flags risk.
Frequently asked questions
What is a PayFac?
A payment facilitator: a company that onboards sub-merchants under its own master account with an acquirer.
Why do PayFacs freeze accounts?
Because they carry liability for sub-merchants and use holds when monitoring shows elevated risk.