InfiniBlog

Learn about payments and the payment facilitator model from our team of experts

Let’s Dispel Misinformation About Becoming a Payment Facilitator – Again

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By Todd Ablowitz, Co-Founder & Co-CEO of Infinicept

If you’re a software company, you may be confused and frustrated by conflicting information you’ve seen out there regarding payments.

Old, tired misinformation about taking on payments and becoming a payment facilitator has been circulating for a few years now, and now it’s back again. As this hot market continues to attract new entrants, they often try to capture business simply by casting others in a negative light.

Here’s one way you can tell someone is telling you something that’s based on their interests, not yours: when they use words like “always” and “never.” Companies that tell you there is only one way to approach a problem – their way – are not operating with their customers’ interests in mind. They want to lock you in to a solution that may or may not be best for you now or down the road as your business evolves.

Another dead giveaway? Vague references to scary things (So much risk! So many costs!), especially when presented with no evidence. A tried-and-true tactic is simply to appeal to fear. Just sow a little doubt – it doesn’t matter whether you can back it up or not.

Honestly, I’m tired of it. Let’s get some facts straight.

As this article on our site dedicated to educating and empowering those who are new to payments explains, there are several common misconceptions that companies keep pushing in an attempt to grow their own piece of the pie.

One of those myths is the cost involved in launching and maintaining a PF business. We never shy away from a conversation about costs. There will be some, of course. As the article points out, your own will vary depending on what you already have built out, the partners you work with, the industry in which you operate, and other factors. For many software companies, the cost is clearly supported with a vibrant and growing payments business. That’s why Shopify, Toast, and so many others get more of their revenue from payments than even their core product.

You can get a ballpark idea of the topline revenue you can expect – so you know how that compares to your costs – by applying published payments rates from other providers like Square or Stripe to your own payments transaction data. We’ve walked a lot of companies through these calculations.

You can read more about other myths in that article, but here’s the bottom line: Not every software company will want to be a payment facilitator. It’s not the best fit for every strategy. Our team of payments veterans has helped many business leaders navigate the payments landscape since we started this business more than a decade ago. I’ve looked many clients in the eye and told them that I thought a different route to payments would work better for their business in its current state.

But for many companies – those with a business model that’s a good fit, those with significant-enough payments volume – it’s a great solution that shouldn’t be ruled out. It enables you, not some third-party provider, to control your data, your relationships and, yes, your revenue. We’ve helped plenty of clients successfully take this route as well.

Software-led payments is a fascinating, fast-moving space with a lot to offer for companies of all sizes, all over the world, whether they ultimately become payment facilitators or not. We’re excited to be a part of it.

Knowing how much revenue actually comes from payments, it’s no wonder some players want to scare you, it’s good for their business. But the fears that are being spread about the payment facilitator model are completely without merit. Every business decision has considerations to weigh, and we trust you to make this decision for yourself, based on the facts.

Download the ‘5 Myths About Becoming a Payment Facilitator’ Infographic

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