By clicking "Accept" you agree to have cookies stored on your device to improve site navigation, analyze site usage, and assist with our marketing efforts. See our privacy policy for more information.

Payment Facilitators vs. ISOs

Learn about the key differences between the two organizations with a shared goal - to connect merchants with payment processors.

Simplifying Payment Processing for Merchants

In the landscape of payment processing, understanding the distinction between Payment Facilitators (PayFacs) and Independent Sales Organizations (ISOs) is paramount. While both entities serveas crucial intermediaries, their approaches, responsibilities, and technical infrastructures vary significantly. Let’s try to deconstruct PayFacs and how they differ from ISOs in this article.


What are ISOs and Payment Facilitators?

Payment Facilitators (PayFacs) just like ISOs have one predominant objective: to connect merchants with payment processors, streamlining the payment acceptance process for businesses.


How does a PayFac differ from an ISO?

While both Payment Facilitators and Independent Sales Organizations (ISOs) play crucial roles in facilitating payment processing, there are notable differences in their level of involvement, risk management, and technological infrastructure. Delving deeper into the topic, we can differentiate the two based on the most vital types of operations in the payment space:


Risk Management

PayFacs are deeply involved in payment processing, assuming direct liability for associated risks such as chargebacks and fraud. This necessitates compliance with strict regulatory standards like PCI-DSS, KYC, and AML. On the other hand, ISOs act as agents of payment processors and do not directly engage in payment acceptance. However, established ISOs like eFlow Processing take matters in their own hands and conduct their due diligence in accordance with the applicable laws, regulations, and requirements of each payment processor they partner with. This ensures the business they bring is reliable and sustainable.


Settlements and Payments

PayFacs handle the settlement process, aggregating funds from all sub-merchants under their umbrella and distributing them accordingly. In contrast, ISOs do not manage fund distributions but are responsible for addressing and assisting with any settlement issues between the processor and the merchant.


PayFacs establish contracts directly with merchants, whereas in the ISO model, contracts are formed between the payment processor and the merchant. That being said, ISOs and merchants can also enter into agreements. One reason being that they are required by the processor do so, in order to satisfy their requirements for data protection.


Technical Capabilities

Due to their deeper involvement in the payment process, PayFacs often possess an extensive technological infrastructure. In contrast, ISOs primarily rely on the technology provided by payment processors, though some advanced ISOs such as eFlow Processing develop their own monitoring tools and reporting systems to support merchants daily.


Payment Processor Relationships

ISOs are characterized by their diverse network of payment processors, offering merchants a vast range of options tailored to their needs. This is not limited to payment solutions, but also other products supporting businesses, such as fraud and chargeback prevention methods. PayFacs, despite having a lot of these value-added services at hand, tend tofocus on a select number of processors to streamline and develop operations/integrations that are necessary to facilitate all the processes they offer.


Contact us!

If you are looking for a reputable ISO to provide you with the most optimal payment solutions tailored to your business, send us a message! On top of providing payment processing solutions, we protect your revenue and ensure sustainability against chargebacks and fraud. Cherry ona cake: we offer consultancy services and support you every step of the way. Your success is our success!

Payment Facilitators vs. ISOs
Marek Madej
eFlow Secure Product Manager


Subscribe to our newsletter to stay informed.

By subscribing you agree to with our Privacy Policy
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.