{"id":3716,"date":"2017-09-07T18:32:57","date_gmt":"2017-09-07T18:32:57","guid":{"rendered":"https:\/\/www.paymentfacilitator.com\/?p=3716"},"modified":"2021-06-15T21:55:12","modified_gmt":"2021-06-15T21:55:12","slug":"visa-rule-change-signals-support-for-pf-model","status":"publish","type":"post","link":"https:\/\/infinicept.com\/payment-facilitator\/archive\/visa-rule-change-signals-support-for-pf-model\/","title":{"rendered":"Visa Rule Change Signals Support for PF Model"},"content":{"rendered":"

As the payment facilitator model evolves, the card networks are increasingly embracing it as a driver of merchant acceptance globally.<\/strong><\/p>\n

A recent rule change from Visa further affirms that PFs are in a solid position. <\/strong><\/p>\n

Visa allows payment facilitators<\/a> to undertake two critical activities with their sponsored merchants – \u00a0sign merchant agreements with them and settle on their behalf.<\/p>\n

The network requires acquiring banks to enter into direct relationships with the sponsored merchants once their annual transaction volume reaches a certain threshold. Visa\u2019s rules allow the payment facilitator to continue to receive settlement on their submerchants\u2019 behalf beyond that limit.<\/p>\n

According to a Visa bulletin, Visa is increasing this threshold from USD 100,000 to 1,000,000 in the U.S. and Canada.<\/p>\n

With the revised rules, Visa also gives sponsored merchants who reach the threshold after the effective date two years to complete the agreement with the bank.<\/p>\n

This change is an acknowledgement by Visa that the payment facilitator model is not just about small and micro merchants, said Todd Ablowitz, publisher of PaymentFacilitator.com and president of Double Diamond Group, which provides consulting services to companies considering the payment facilitator model.<\/p>\n

\u201cThere are submerchants of our PF customers that process hundreds of millions of dollars,\u201d Ablowitz said.<\/p>\n

It is also a sign of Visa\u2019s support for the model, which is important to the growth of merchant acceptance.<\/p>\n

\u201cIt\u2019s an unequivocal signal of where Visa sees this going,\u201d he said.<\/p>\n

Ablowitz described the change as an adjustment of controls based on the continued increase in transparency and understanding of the PF model.<\/p>\n

\u201cThis rule change makes sure that, at a certain size, the bank takes a more direct role in overseeing what the merchant is doing,\u201d he said.<\/p>\n

Aside from the level of control the bank agreement provides, the payment facilitator remains in the frontline position, assuming responsibility for the submerchant\u2019s behavior.<\/p>\n

Mastercard raised its own volume threshold from $100,000 to $1,000,000 in 2014. Mastercard\u2019s rules are slightly different from Visa\u2019s, also requiring funding to go straight from the bank to the submerchant rather than to the payment facilitator when the submerchant reaches the annual volume threshold. This requirement created more operational changes for the payment facilitator than the merchant agreement requirement, Ablowitz said.\u00a0Because this\u00a0requirement is only for submerchants\u00a0who process more than $1,000,000 per calendar year of Mastercard transactions, it is not particularly frequent for most payment facilitators.<\/p>\n

Visa\u2019s rule change was effective August 31, the bulletin said. The company did not respond to a request for comment by press time.<\/p>\n","protected":false},"excerpt":{"rendered":"

As the payment facilitator model evolves, the card networks are increasingly embracing it as a driver of merchant acceptance globally. A recent rule change from Visa further affirms that PFs are in a solid position.<\/p>\n","protected":false},"author":21,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[1015],"tags":[185,643,951],"class_list":["post-3716","post","type-post","status-publish","format-standard","hentry","category-archive","tag-compliance","tag-payment-facilitator","tag-visa"],"acf":[],"_links":{"self":[{"href":"https:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/3716","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/comments?post=3716"}],"version-history":[{"count":1,"href":"https:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/3716\/revisions"}],"predecessor-version":[{"id":7234,"href":"https:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/3716\/revisions\/7234"}],"wp:attachment":[{"href":"https:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/media?parent=3716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/categories?post=3716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/tags?post=3716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}