How a payment facilitator works
The payment facilitator signs a merchant, checks it, submits its card payments to the acquirer and pays it out. Visa defines the role as an entity that contracts with an acquirer to deposit transactions, receive settlement, or contract with the acquirer on behalf of a sponsored merchant. Mastercard also calls the merchant a submerchant, and has the facilitator sign it as the acquirer's agent (Mastercard Rules, 7.8.1).
The acquirer stays answerable to the scheme. It is liable for all acts and omissions of the facilitator and of its sponsored merchants (Visa Core Rules, 5.3.1.2, and Mastercard Rules, 7.6.5).
What the scheme rules ask of a payment facilitator
- Registration: Visa confirms the facilitator's registration, made by the acquirer, before any payment is submitted (Visa Core Rules, 5.3.1.3).
- Identifiers: each payment carries the facilitator's identifier and the sponsored merchant's (5.3.1.3).
- No nesting: a facilitator does not contract with another facilitator (Visa Core Rules, 5.3.1.5, and Mastercard Rules, 7.8).
- Funds: settlement money a facilitator has access to is used only to pay its sponsored merchants (Mastercard Rules, 7.6.5.1).
- PCI DSS: the facilitator ensures that its sponsored merchants comply (Visa Core Rules, 5.3.1.1).
When a sub-merchant needs its own agreement
Visa: once a sponsored merchant passes USD 1 million in annual transaction volume, the acquirer enters into a direct merchant agreement with it, within two years for a merchant already signed. Exceptions cover a facilitator that has held the merchant for at least two years with the same acquirer and reports on it, and listed sectors such as utilities, schools and healthcare (Visa Core Rules, 5.3.1.4).
Mastercard: a sponsored merchant above USD 10,000,000 in combined annual Mastercard and Maestro volume contracts directly with an acquirer, unless set conditions are met or its sector is on a similar list (Mastercard Rules, 7.8). One condition is that the acquirer reviews at least 5% of newly signed sponsored merchants each month.
Payment facilitators and licensing
Registration with a card scheme is not a regulator's licence. In the EU, PSD2 defines acquiring as contracting with a payee to accept and process payment transactions, which results in a transfer of funds to the payee (Article 4(44)), and acquiring is a payment service. A technical service provider that never enters into possession of the funds is outside PSD2 (Article 3(j)).
Payment facilitator, ISO, marketplace or gateway?
- ISO
- An independent sales organisation solicits merchants for an acquirer and handles their applications (Mastercard Rules, 7.1). The merchant's agreement is with the acquirer, not with the ISO.
- Marketplace
- In the Visa Core Rules (5.3.4.1), a platform that brings buyers and retailers together under its own brand, handles payments for the retailers and is financially liable for disputes. Its sellers are retailers, not sponsored merchants.
- Payment gateway
- Passes payment data between the merchant and the acquirer. The merchant keeps its own agreement with the acquirer, and the gateway does not pay the merchant out.
- Acquirer
- The scheme member that acquires the payments and is liable to the scheme for them. A payment facilitator works under an acquirer and is registered by it.
Where a payment facilitator shows up in a platform
Modules that do the work
- Merchant onboardingBusiness sign-up, verification and underwriting, from application to first payment.
- Card acquiringCard acceptance on the phone, in store and online, through the acquirer you choose.
- CheckoutA hosted checkout for cards, wallets, bank payments and crypto, routed to the best provider.
- PayoutsMoney out to bank accounts, cards and wallets, on the rail that fits each payment.
- LedgerThe double-entry book of record behind every balance, fee and transfer.
Platforms that need it
Guides that go deeper
- How to become a PSP or a payment facilitatorGateway, acquirer, payment facilitator or payment institution: where the licence line falls, how the card schemes register payment facilitators, what merchant KYB demands, and the UK and UAE rules.
- PCI DSS for a payment gateway: scope, levels and how to shrink itWhat PCI DSS v4.0.1 asks of a payment gateway: who sets your validation level, when you need a Report on Compliance from a QSA, and how tokenisation and hosted fields shrink scope.
- EMI or payment institution licence in the EU, and the agent routeWhat an e-money institution and a payment institution may do in the EU, the capital each needs, safeguarding, passporting, and launching as an agent first.
- EMI or payment institution licence in the UK, or launch under a partnerE-money or payments, authorised or small: what the FCA asks for in capital, safeguarding and people, how long it takes, and when an agent or banking partner is the faster route.
Where it is written
The laws and standards this page's facts come from.
- Visa Core Rules and Visa Product and Service Rules, 18 April 2026: 5.3.1 and 5.3.4 (Visa)
- Mastercard Rules, 2 June 2026: Rules 7.1, 7.6.5 and 7.8 (Mastercard)
- Directive (EU) 2015/2366, PSD2, Articles 3(j) and 4(44) (EUR-Lex)
- Payment Systems Regulator, Market review into card-acquiring services, final report, glossary (MR18/1.8, November 2021)
General information, not legal advice: what applies to you depends on your services and your market.