If you run a SaaS platform, an online store or a service business, choosing between the ISO and Payment Facilitator models shapes how you accept - or resell - card payments. Both connect merchants to the card networks, but they carry very different responsibilities and risk.
What an ISO is
An Independent Sales Organization is a third-party company authorized to resell the services of acquiring banks and processors. The ISO manages sales, onboarding and support, but the merchant account is opened in the business's own name through the acquiring bank. ISOs handle relationships and PCI, KYC and AML compliance, and often register with Visa and Mastercard - yet they don't assume financial liability for transactions.
What a PayFac is
A Payment Facilitator lets sub-merchants process under its own master merchant account. Stripe, Square, PayPal and Shopify Payments are classic examples. There is no individual underwriting, onboarding is nearly instant, and the PayFac assumes liability for every transaction along with built-in fraud tools, APIs and reporting.
Which fits you
- ISO - lower cost and risk, easier to launch, ideal for consultants and sales orgs building residual income; the trade-off is slower onboarding and less control over the stack.
- PayFac - full control and instant onboarding, best for SaaS, marketplaces and platforms, but it demands heavy compliance, upfront investment and more fraud exposure.
A solo founder reselling processing for residual revenue is a textbook ISO. A growing platform that wants payments embedded in its own dashboard is better off as a PayFac. Your size, risk profile, scalability needs and compliance resources decide it.