PayFac is Not Dead

Every few years in payments, the industry seems to decide that the Payment Facilitator model is “over.” Headlines appear, whispers spread at conferences, and new buzzwords try to take center stage. Yet here we are in 2025 — and PayFac is not only alive, it’s evolving.

Why? Because the fundamentals haven’t changed. Businesses still need fast, seamless ways to onboard merchants, manage risk, and embed payments into software. PayFacs continue to deliver that. The real shift is in how PayFacs are built and scaled. Sponsors and acquirers are more demanding. VARS and VAMP raise the bar for risk and compliance oversight. And today’s PayFacs can’t rely on “just add payments” — they need thoughtful underwriting, data-driven monitoring, and disciplined financial management.

At the same time, new models like PayFac-as-a-Service make it easier to enter the market without reinventing the wheel. Specialized vertical platforms still see payments as the growth lever — and PayFac remains the proven way to control the experience.

So no, PayFac isn’t dead. It’s maturing. Those who adapt, partner wisely, and embrace compliance as a strategic advantage will thrive. The value proposition — owning the merchant relationship — is as relevant as ever.

RPY Innovations knows all about this model.  We’ve been working with them even before the model was approved by the Card Brands.  If you need help, we are here.