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Are you a software platform thinking about integrating a payment solution into your software? If so, it’s a smart move. To turn that idea into reality, you have two choices: become a payment facilitator OR partner with an established payment facilitator. WARNING: While creating your own in-house solution may seem like another smart move, you should be aware of what it takes.

What’s wrong with applying a little DIY to payments? The stakes are much higher than, say, those of a home repair gone wrong.

Plus, the enormous amount of time and resources required to do it yourself wouldn’t likely produce a solution that works better than that of an experienced payment facilitator — and it would probably even fall short. Keep reading for my take on the challenges you may encounter when creating your own in-house payment facilitator solution, and why the alternative is a better choice for some businesses.

The Potential Downsides of Becoming Your Own Payment Facilitator

First of all, what is a payment facilitator? It’s a service provider that has been authorized by acquiring banks to represent them in financial dealings with merchants.

Payment facilitators are authorized by acquiring banks to underwrite merchants, provide merchant accounts, and handle the flow of funds — only they do it faster and provide powerful eCommerce functionality that can help merchants sell more. (It could take several months to get approved for a merchant account if you’re working directly with a bank, for example.) Essentially, payment facilitators make the whole process of onboarding new merchants and processing their payments with value-added features for higher conversions, very easy and quick.

So if you’re considering integrating payments into your software solution, you have two options:

  1. Become your own payment facilitator by first getting sponsorship from an acquiring bank, getting approval from the card networks and provisioning merchant accounts yourself.
  2. Partner with an established payment facilitator that handles everything in #1, but also releases new innovative product features, while keeping up with all the regulatory and compliance requirements.

What’s appealing about option #1? You’ll have complete control over the product roadmap and underwriting decisions. And you’ll capture 100% of the profits, avoiding sharing them with a third party.

However, there could be 3 key downsides to becoming your own payment facilitator:

1. You’ll invest significant time, money and resources into building a payment solution.

If you were to build your own payment facilitator solution in-house, it would likely be a fairly simple offering that isn’t on par with what other payment solutions can provide: one bank connection with basic credit card acceptance. And even the setup and approvals required to get that job done would be extensive.

Sure, you’d get 100% of the profits, but your profits could still be less than with an established payment facilitator because of the resources and staffing committed to managing your payment solution. The major card brands account for a sizable chunk of payments around the world, but what about popular alternative payment methods, such as eWallets (like Apple Pay, Google Pay, etc.), bank transfers and real-time banking options?

A lack of payment options would be a deterrent to shoppers in many corners of the globe, for example, in markets like China, where Alipay reigns. In fact, insufficient payment methods is one of the top 10 reasons why shoppers abandon purchase at checkout.

Your single bank connection would also cost you sales. With every transaction, customers’ credit and debit card information is passed along with an authorization request to an acquiring bank, which processes card payments on your behalf. Transactions from global shoppers have a higher probability of being flagged for potential fraud. So having a single acquiring bank can cause international transactions to be declined because of this single point of failure.

Our All-in-One Payment Platform was designed to increase conversions. Get in touch to find out more about it — and all the other things we can do for your business!


Some payment facilitators (like us) have been around for more than 15 years. And while it’s true that many are only connected to a single bank, some aren’t (that’s us, too!). The more bank connections you have, the higher your transaction approval rate is likely to be. And that means more money in your pocket in the end.

Payment facilitators can also offer a broader range of payment types (again, some more than others). BlueSnap supports more than 110 of the world’s favorite payment methods — including local bank cards, alternative payment methods, eWallets and more — so your customers will always find their preferred payment type when they check out.

2. You’ll take on unnecessary financial risk.

Creating your own payment facilitator model may be appealing, but it has a greater degree of risk than partnering with one. Providing merchant accounts to users requires a thorough vetting of each merchant to minimize your financial risk. Any potential fraud or criminal activity on the part of those users is your responsibility, and the costs associated with merchant bankruptcy could also be your responsibility.

In both cases, the payment facilitator may be liable for losses, which could have a significant impact on business operations. Situations like this have driven some merchants out of business. (Remember what happened when GE tried to become a financial services company?) Are you prepared to become an expert in payments? You need to be if you want to minimize your risk.

3. You’ll take on the burden of tracking and meeting regulatory and compliance requirements.

Local, regional and international banking regulations and card network compliance rules are changing constantly and need to be monitored and implemented. Even seemingly minor mistakes, like incorrectly addressing a privacy law requirement or miscalculating tax amounts, could lead to fines and penalties, not to mention the serious responsibilities of complying with OFAC sanctions; FINCEN, KYC and AML requirements; and tax reporting with the IRS.

In addition to the regulatory compliance aspect, you also need to comply with card brand rules (updated twice per year) and Payment Card Industry Data Security Standards (PCI-DSS). Without one or more payments experts on board, you could miss something you’ll certainly wish you hadn’t.

Many payment facilitators, on the other hand, have an army of experienced payments personnel, all of whom are constantly watching out for even the smallest developments in the payments world. It’s their job to catch everything — and make sure your business stays on track.

All this is not to say that it can’t be done; certainly some large companies do act as their own payment facilitators. But just because a company is large doesn’t mean the payfac model is a good fit. Even eBay, one of the largest eCommerce businesses around, doesn’t act as its own payment facilitator — it has a partner that can do the job right. It is is often best to stick with what you know and focus on your core business.

The Benefits of Partnering with a Payment Facilitator

There are several good reasons to partner up for payment processing, among them:

  • It’s a risk-free arrangement for you. When you sign a payment facilitator agreement, your payment partner takes on all the financial risks associated with payment processing. That means you can concentrate on your core business, which is selling software.
  • It can provide you with an additional revenue stream. Many payment facilitators partner with software platforms and share the revenue generated through payment processing, which adds to your bottom line without any overhead.
  • There are no regulatory and compliance requirements for you to track and implement. Your payment facilitator takes on that burden.
  • Immediate access to cutting-edge features. Payment facilitators are experts in payments and are constantly innovating their solutions. When you partner with a payment facilitator, you can immediately benefit and implement the latest features.
  • It should enhance your software product and the user experience. The payment facilitator you choose will help you deliver a more seamless user experience, but some can do more than others. Some payment solutions aren’t fully integrated with your software but run in parallel with it — it’s up to your users to choose one of the payment providers you work with, integrate the provider’s services into their own system, and arrange for a merchant account through that gateway on their own. Not the best experience for anyone. Integrating with a partner like BlueSnap is different. When our payment solution is embedded in your software, your users can accept payments seamlessly without doing any additional work. And because the payments piece is embedded into your product, your users have the ability to incorporate payment data into all their modules. For example, payments integrated into a school ERP system enables automatic reconciliation of credit card deposits, as well as the automatic updating of parent and alumni records with real-time payment information.

One tip for choosing a payment facilitator: Think about where you’re selling and what features your business needs. Do you need a subscription engine? Are you a marketplace? Do you need to be able to sell internationally? Not all payment facilitators are created equal, so choose one that will be able to meet your needs both now and in the future.

Make BlueSnap Your Payment Facilitator

With a single connection to BlueSnap, you can give your users all the powerful features of our All-in-One Payment Platformwithout any additional financial risk or compliance burden. When you partner with us you get cutting-edge payment technology with very little work. Take a closer look at our global payment features on our website, or contact us to talk about how we can best address your payment needs.


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