PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

Finix Competes with Stripe by Offering Payment Facilitation

Don Apgar by Don Apgar
May 31, 2022
in Analysts Coverage, Merchant
0
Finix Competes with Stripe by Offering Payment Facilitation

Finix Competes with Stripe by Offering Payment Facilitation

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

Payfac infrastructure company Finix announces that it is now operating its own payfac and competing directly with Stripe and others in offering payment processing services to independent software vendors (ISVs).

Finix launched as a software company building a turnkey infrastructure platform to help other software companies bundle payment processing functionality with their platform by launching their own payfac. A payfac, industry shorthand for payment facilitator, enables the ISV to become what’s known as a master merchant, enabling them to easily offer payment services to their SaaS customers as submerchants. Becoming a payfac means that the ISV as master merchant is responsible for paying their submerchants for processed sales every day, having tools in place to screen for fraud and ensure regulatory compliance, and also provide customer service on any exception items that arise.

Finix software drastically shortens the time to market for ISVs looking to become a payfac with a turn-key platform. The challenge for the ISV is, even with the Finix software, they must still staff appropriately and integrate Finix into their core platform, making the cost for a typical ISV to stand up a payfac for payments around $3-5M investment and a 12-18 month launch timeline. Building business in what has turned out to be a narrow target market is an educational process with a long sales cycle, a difficult topic is quarterly business reviews where the board expects to see solid and steady revenue growth.

According to Finix CEO Richie Serna:

“We were building technology that would take a three-year in-house build by dozens of engineers, with tens of millions of dollars of technical R&D and investment, and taking that down to a number of months by getting developer-friendly APIs to start monetizing their payments,” he said. “That was our biggest core offering. What we’ve done now is become the payments facilitator ourselves, so that we can not only provide the payments, but also all the back office requirements and compliance certifications, so that our customers can get up and running in a matter of days, rather than months.”

Offering a turn-key payfac platform greatly expands the ISV target market for Finix, with the ability to build more immediate opportunities with a much clearer and shorter sales cycle. It is also a great strategy move for the company since they can now offer customers the ability to “grow into” their own payfac at a later date, something that Stripe and others doesn’t offer.

Finix recently raised a $35 million Series B led by Sequoia, and in an unusual twist just one month later, Sequoia walked away from the deal in which it reportedly wrote the self-described payments infrastructure company a $21 million check. Finix later told employees that Sequoia concluded that Finix competes too directly with Stripe, the payments company that represented one of Sequoia’s biggest private holdings and that in turn counted Sequoia as one of its biggest outside investors.

Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group

Tags: FinixISVMerchantMerchant ServicesMerchantspayfacPayment FacilitationStripe
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Mercator Advisory Group analysts and industry professionals.

    Must Reads

    digital payments

    Navigating the Future: Top Digital Payment Trends to Watch

    March 31, 2023
    scams

    As Scams Become Omnipresent, New Tools Can Help FIs Fight Back

    March 30, 2023
    item clearing

    As Check Volumes Decrease, Financial Institutions Need to Consider Alternative Clearing Options

    March 29, 2023
    payments friction

    Too Much Payments Friction Can Lead to Customer Chafing

    March 28, 2023
    online fraud

    Understanding the Cost of Online Fraud and How to Prevent It

    March 27, 2023
    live shopping, ebay

    Q&A: eBay Exec on Live Shopping and the Future of Payments

    March 24, 2023
    AI and Biometrics in Regulatory Compliance in Finance

    The Importance of AI and Biometrics in Regulatory Compliance in Finance

    March 23, 2023
    Everyone Benefits from the Real-Time Payment Networks  

    Everyone Benefits from the Real-Time Payment Networks  

    March 22, 2023

    Linkedin-in Twitter

    Advertise With Us | About Us | Terms of Use | Privacy Policy | Subscribe
    ©2023 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    Menu
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • Recent News
    • Resources
    Menu
    • Industry Opinions
    • Recent News
    • Resources
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result