In the ever-evolving landscape of payment processing, businesses are constantly seeking efficient and cost-effective solutions to meet their financial needs. One trend that has been gaining significant momentum in recent times is the shift from traditional payment gateways like Stripe to the emerging concept of PayFac-as-a-Service (PFaaS).
In this article, we will explore why businesses are increasingly favoring this alternative and how it can benefit both merchants and consumers alike.
Stripe vs PayFac: What Sets Them Apart?
Stripe, a leading payment gateway, has (for a very long time) been a go-to choice for businesses of all sizes. It provides a comprehensive suite of payment processing tools and services, allowing merchants to accept payments from customers around the world. However, the rise of PayFac-as-a-Service has presented a compelling alternative to traditional payment gateways.
PayFac-as-a-Service, or Payment Facilitator as a Service, is a model that enables businesses to white-label their payment structure. By taking this approach, a business can become a virtual payment facilitator without the need for extensive infrastructure or complex regulatory processes.
Rather than relying on third-party payment gateways like Stripe, your businesses can use a PayFac-as-a-Service provider to take care of the technical aspects of payment processing, allowing you to focus on core business operations.
So, why are businesses switching from Stripe?
The following are some of the top reasons:
1. Ability to Monetize Payments
The power to create new revenue with pay-fac-as-a-service by monetizing payments is one of the key advantages that make vendors switch from Stripe. Unlike traditional payment gateways, which act as intermediaries, PFaaS platforms enable businesses to generate additional revenue streams with models such as revenue sharing.
Furthermore, by taking control of the payment flow and becoming a virtual payment facilitator, businesses can earn transaction fees directly and potentially unlock new monetization opportunities. In truth, more than 78% of businesses report an increase in revenue after transitioning to a PFaaS model with monetization options, and that number keeps growing.
2. Simplified Payment Processing
Another major reason that makes businesses opt for PayFac-as-a-Service is the simplicity it offers in payment processing.
Rather than dealing with multiple intermediaries, PFaaS allows businesses to consolidate their payment operations by leveraging a single platform. This eliminates the need for complex integrations, reduces administrative overhead, and streamlines the overall payment flow.
3. Better Control and Customization
PayFac-as-a-Service solutions provide businesses with greater control and customization options compared to traditional payment gateways. With the ability to white-label payment processing, companies can maintain a consistent brand experience for their customers over the entire payment journey.
Adding to that, businesses can tailor the payment process to align with their specific requirements thus enhancing the overall customer experience.
4. Faster Onboarding and Time-to-Market
Integration and onboarding processes consume a lot of time and are tedious when working with traditional payment gateways. Even more inconvenient is the attempt at becoming a real payment facilitator with a physical merchant account. Such an approach not only requires a lot of time, but is also expensive.
PayFac-as-a-Service solves this problem with a simplified onboarding experience, allowing businesses to get up and running quickly. This accelerated time-to-market enables companies to seize opportunities promptly and adapt to changing market dynamics with ease.
5. Scalability and Flexibility
As businesses grow, their payment processing needs evolve as well. PayFac-as-a-Service solutions are designed to be scalable and flexible, accommodating the changing requirements of businesses of all sizes.
So, whether it’s handling increased transaction volumes or expanding into new markets, PayFac-as-a-Service platforms offer the necessary scalability and flexibility to support business growth seamlessly.
6. Comprehensive Payment Functionality
PayFac-as-a-Service providers often offer a wide range of payment functionalities beyond simple transaction processing. They include recurring billing, subscription management, invoicing, fraud prevention, and robust reporting and analytics capabilities.
Having an assortment of such services within a single platform allows businesses to simplify their operations and access valuable insights to optimize their financial performance.
7. Cost-Effectiveness
Another significant advantage of PayFac-as-a-Service is its cost-effectiveness for businesses. Traditional payment gateways often involve multiple fees, including setup fees, monthly charges, per-transaction fees, and additional costs for various features. PayFac-as-a-Service providers typically offer transparent pricing models, which can promote cost savings for businesses, particularly for those with high transaction volumes.
Use PayFac-as-a-Service to improve your payment structure
The shift from traditional payment gateways to PayFac-as-a-Service reflects the changing needs and expectations of businesses in the digital age. As the payments industry continues to evolve, embracing innovative and efficient payment solutions from service providers like Tilled can position businesses for success in an increasingly competitive marketplace.
So if you’re looking to set up your business for success, make the decision to make this move today.
