Understanding the difference between Payment Facilitator (PayFac) and Payment Aggregator

With regard to accepting the payments, you may decide to get registered with a payment aggregator, get a merchant account, or put into practice the sub-merchant account. Meaning to say, you may opt for the independent sales organization (ISO) – the traditional merchant account service provider or you may process your payments with a sub-merchant account known as a payment facilitator (PayFac).

Payment Facilitator

So many different industry-related terms and concepts have come up in payment processing. With the changing times, various innovations have taken place. Such two models, namely, payment facilitators and the payment aggregators under the Payment Service Providers (PSP) would be discussed in this blog.

Payment Facilitator (PayFac) vs Payment Aggregator

Here is a brief note on the difference between the payment facilitators and the payment aggregators.

Payment Facilitator

PayFac or the Payment Facilitator is the third-party payment services provider (PSP). It would register the merchant on a sub-merchant account and it would have a contract with the acquiring bank. Thus, it would arrange communication between both parties, the merchant and the acquiring bank. All in all, the payment facilitator has the master merchant account (MID). PSP and ISO are the two types of merchant accounts.

Payment facilitators have a registered and approved merchant account with the acquiring bank. The merchants can then register under this merchant account as the sub-merchants. The payment facilitator works directly with the banks for settlement and disbursement of the payments.

It provides the merchant with the advantages such as quick onboarding, better services due to the non-dependence on any other party, and increased profit.

Payment aggregator

Payment aggregator would use their merchant ID to do the payment processing for the merchants. The merchants are signed up under the payment aggregator MID. Under the payment facilitators, the merchants are provided with PayFac’s MID.

Read and Know more about Payment Aggregators in this blog of Basic Points of Difference between the Payment Gateway and Payment Aggregator

The payment aggregators accept the payments on behalf of the merchant and transfer the same first to the acquiring bank and then settled to the merchants. It provides multiple payment method options such as debit cards, credit cards, wallets, UPI, net banking, and QR code. PayKun is an example of a payment aggregator.

The Payment aggregators are suitable for all types of merchants. They are the best for small and medium enterprises. They offer cost-effective services. They include various types of payment methods in one checkout. It is simple, easy, and fast to process the payments with Payment Aggregators. The reports, records, and dashboard help the merchant with the analysis of the transactions.


Thus, the main difference between the payment facilitators and the payment aggregators is that the payment aggregator processes the transaction in its own MID and the PayFacs register the merchants under its MID.

The benefits are almost similar to both these types of payment processors. Payment aggregators are not expensive in comparison to the other ones. Sign up now with PayKun and process your business payments!

You May Also Like

About the Author: PayKun