Voice of the Industry

Seizing the opportunities of the Payfac model to support growth

Tuesday 9 May 2023 09:08 CET | Editor: Irina Ionescu | Voice of the industry

Jonathan Lesieur, VP PSP & Fintechs of Payplug, shares with The Paypers the advantages of the payment facilitation model and how to turn it into a revenue driver.

An overview of today’s payment facilitator market

Payment facilitators (or ‘Payfacs’) operate as payment services intermediaries, as defined by the card scheme rules of this specific status. They enable merchants to accept payments from their customers and connect to a card scheme, through an acquirer – a traditional bank or another institution. Though existing since the 1990s, the number of payment facilitation platforms has recently soared to become an essential link in the ecommerce chain. The number of Payfacs is estimated to have grown by 13.8% worldwide (CAGR - compound annual growth rate) over 2018-20251.

Beyond PSPs, companies exclusively positioned as payment service providers, the payment facilitator status is now also claimed by software vendors – Shopify launched Shopify Payments and added a Payment-as-a-Service layer to their offering.

These two different company profiles face associated challenges. Payment specialists are regularly expected to pursue an international expansion strategy, to meet local customer payment habits. Platforms adding payment services to their capabilities value time-to-market and keeping the focus on their core business. Best-in-class merchant experience remains the key for all, especially when it comes to facilitating the critical stage of onboarding.

The advantages of the Payfac model, beyond the search for performance

When it comes to connecting with card schemes, two major options are available – either apply for affiliated membership status to the scheme itself or join forces with an acquirer and operate as a Payfac, in accordance with scheme rules.

The latter could be the most advantageous, as it combines: 

  • facilitated access to payment services, by avoiding a more complex scheme membership registration process;

  • easier and quicker integration of payment methods, to considerably shorten time-to-market;

  • better resource allocation for service implementation and maintenance.


What to look for in an acquiring partner?

Payment processing is a sensitive activity. Expertise and performance should be highly valued in the decision-making process of a payment facilitator. Embracing these values, Payplug has developed a solution specifically designed to meet the needs for Payfacs
2, based on over a decade of experience and a solid know-how regarding regulatory requirements monitoring. Part of the Groupe BPCE, the company benefits from its positioning in the French market and leverages the access of an important issuing bank for Visa cards in continental Europe3, involved in 20% of BtoC transactions in France3.

A better understanding of the issuer’s logic has led the French payment solution to a more efficient fight against fraud, along with maximised acceptance rate of card transactions on the French local market. 97% of frictionless payments were accepted last year, all issuers combined4. France being the largest card payment market in the European Union (EUR 663 billion in 20225), it is a main differentiating factor that ensures high performance rates for retailers who have a business activity on the French market.

Fighting fraud with Payplug's Payfac solution

Payplug enables Payfacs to automate their processes, from merchant onboarding – with possible instant pay-in activation – to settlements. Payplug’s platform automatically generates payment dynamic descriptors as well as financial reconciliation reports, accessible in real-time.

The risk management approach helps payment facilitators stay focused on their core business: our fraud prevention tool is constantly enriched with issuer data, while fraud, risk and data experts are regularly requested to challenge the existing strategy.

  1. Source: Infinicept & AZ Payments Group report, 2020

  2. Offer marketed by Payplug Enterprise

  3. Source: Groupe BPCE data, 2022

  4. Source: Payplug data, 2022 (3DS V2 transactions under €250)

  5. Source: ECB Payments Statistics, July 2022

About Jonathan Lesieur

Jonathan Lesieur is the VP PSP & Fintechs of Payplug, the French payment solution designed for merchants, e-merchants of all sizes, and fintechs. With over ten years of experience in tech and payments, he has worked with several of top e-merchants from various industries, helping them grow and optimise their payment performance. Prior to his current position, Jonathan held several positions at IBM and Dalenys (which joined forces with Payplug in 2022).

About Payplug

Payplug is the French payment solution designed for merchants, e-merchants of all sizes, and fintechs. Our mission is to redefine payment performance to help the most demanding players in the market realise their business ambitions faster in France and Europe. The Payplug brand brings together the entities of Payplug and Payplug Enterprise.

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Keywords: online payments, payment methods, fraud management, fraud detection, online fraud, payment fraud, fraud platform, fraud prevention, merchant, card scheme, merchant onboarding, real-time payments, payment facilitator
Categories: Payments & Commerce
Companies: Payplug
Countries: France
This article is part of category

Payments & Commerce


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