Definition
A payment facilitator (PayFac) holds a master merchant account with an acquirer and onboards its customers as sub-merchants, taking responsibility for underwriting, risk, funding, and compliance. Square and Stripe are PayFacs; so are many vertical software platforms that embed payments.
Becoming a registered PayFac costs $1-3 million and 12-18 months in registration, compliance staffing, and technology. PayFac-as-a-service lets a platform offer the same embedded experience and keep most of the economics without carrying the liability.
Example
A salon software platform embeds HL Hunt payments. Salons sign up inside the app in minutes, the platform earns a revenue share on every transaction, and HL Hunt handles underwriting, risk, and funding.
How HL Hunt handles it
HL Hunt’s platform program gives software companies white-label onboarding, instant sub-merchant activation, configurable revenue share, and AI agents that manage risk across the whole portfolio.