When setting up card payments for your business, you have two fundamental models to choose from: a PayFac (payment facilitator) or a direct merchant account with a bank. Each has distinct advantages and trade-offs. Here is an honest comparison to help you decide.
Setup Speed
PayFac: 24-48 hours. BuzzPay’s onboarding is fast because you process under our master merchant account — no lengthy bank underwriting. Merchant Account: 1-4 weeks. The bank needs to assess your business, run credit checks, review documentation, and allocate a merchant identification number.
ompliance Burden
PayFac: The PayFac handles PCI-DSS compliance, risk monitoring, and regulatory requirements. You focus on your business. Merchant Account: You are responsible for your own PCI compliance, which involves annual assessments, security questionnaires, and potentially significant costs for larger businesses.
Pricing
PayFac: Transparent, often flat-rate pricing. Slightly higher per-transaction cost than negotiated bank rates but simpler to understand and predict. Merchant Account: Potentially lower per-transaction costs for high-volume businesses that can negotiate. But pricing is often complex — interchange-plus, blended rates, monthly minimums, and hidden fees.
Flexibility
PayFac: Typically no lock-in contracts. Cancel any time. BuzzPay operates on this model. Merchant Account: Often requires 12-24 month contracts with early termination fees.
When to Choose a PayFac
You are a small or medium business processing under $500,000 per year in card payments. You want to be live quickly without lengthy applications. You value simplicity and transparent pricing. You do not want to manage PCI compliance yourself.
When to Choose a Merchant Account
You are a large business processing over $1 million per year and can negotiate volume-based rates. You need maximum control over your payment processing. You have the resources to manage PCI compliance internally.
