A PayFac — or payment facilitator — is a company that enables businesses to accept various forms of electronic payments without their own individual merchant accounts. The PayFac has a master merchant account and aggregates multiple submerchants under that account. Essentially, a PayFac is the intermediary between you, the merchant, and the acquiring bank.

PayFacs handle underwriting, onboarding, and settlement, making them attractive to platforms or marketplaces supporting many independent sellers. Square and Stripe are examples of large-scale PayFac models.

For businesses that qualify, a PayFac model can reduce friction, speed up onboarding, and centralize risk management. But it also comes with trade-offs: less control over chargebacks, branding, and account stability.

AltoPay is an alternative to PayFacs, giving merchants greater control — especially those in high-risk or regulated industries that may not be well supported under standard PayFac structures.