# Do Platforms need to become PayFacs to win at payments? *November 10, 2025* • *5 min read* **Author**: Natalie Wexler, VP Platform Offering Strategy at Adyen As payments reshape platform strategy, do platforms need to become PayFacs to stay ahead — or is there another path to success? The PayFac conversation can be confusing — Natalie Wexler, our VP of Platform Offering Strategy, breaks down what platform leaders really need to know. ![Coffee shop owner setting up and using an Adyen terminal through a saas platform for food & bevrage](https://media.ffycdn.net/eu/adyen/r8ij9Fe4iPHUDYad9Wvg.jpg?format=webp&width=944&height=1258&crop=fp&fp=0.5729337%2C0.492204) --- ## “Should my platform become a registered PayFac?” “Should my platform become a registered PayFac?” It’s a question I regularly receive from scaling software platforms. The appeal is obvious: more revenue, tighter customer experience, faster growth. In a competitive landscape, it’s tempting to shoulder the full stack. But do you need to become a PayFac to take advantage of these tempting benefits? Maybe not – the payments game has changed. Today’s leading platforms capture these benefits not by building everything in-house, but by embedding payments through trusted partners.  Early movers are already reaping the rewards: Lightspeed derives 60% of revenue from transactions (FY24), Toast 83% from financial technology solutions, and Shopify 74% from merchant solutions, primarily Shopify Payments. ## PayFacs: control comes at a cost As a Payment Facilitator (PayFac), platforms can process payments for sub-merchants. This offers platforms full control (but also full responsibility) over onboarding, underwriting, compliance, and money movement. Many assume PayFac status is the only way to monetize payments, deliver a seamless experience, or expand internationally. But in practice, the regulatory and operational burden can actually slow growth and divert resources from core product development. For some platforms willing to invest the time, resources and money, the trade-off could be worthwhile. For most, it is slow, costly, low-margin, and distracting. Licensing, compliance, and fraud management absorb resources. Teams spend years on infrastructure instead of improving the product. ## Embedded payments: a flexible alternative Early on, platforms looked to monetize payments by referring sub-merchants to payment providers, which created neither recurring revenue nor loyalty. Embedded payments changed that. By integrating payments directly into software, and increasingly financial services, platforms can 3-4x revenue and create a stickier experience.  With embedded payments, platforms have two paths: 1) build as a PayFac; or 2) partner with a licensed provider to white-label the infrastructure. Option 2 (PayFac-as-a-Service) gives platforms the same control and revenue potential without the regulatory and operational burden. They can: - Own the customer relationship - Define onboarding and monetization - Scale internationally without creating local entities - Add financial products, such as accounts, issuing or lending, when ready The notion that platforms must choose between control and outsourcing is outdated. With the right partner, they can have both. ## Regulatory Considerations: PSD3 and PSR Regulation underscores this choice. Under PSD2 regulation in Europe, platforms cannot hold or move customer funds directly. Many use third-party acquirers or structured flows to process payments. These workarounds have added complexity and risk. PSD3, the upcoming iteration of the regulation, will clarify rules, tighten supervision, and may require additional licences for PayFacs. The Payment Services Regulation (PSR) complements these directives, imposing operational obligations such as safeguarding, reporting, and oversight. Platforms embedding payments via licensed partners are less exposed: the partner handles regulatory responsibilities while the platform retains control over the experience and monetization. Long-term growth requires a model that can adapt to evolving rules. For more details on this, see [Adyen’s PSD3 blog](https://www.adyen.com/knowledge-hub/psd3). ## The evolution of sub-merchant expectations Embedded payments are no longer optional. Sub-merchants increasingly expect a single platform to run their business, and adoption is accelerating: embedded finance has grown 25% over the past two years, creating a $185 billion opportunity ([Adyen & BCG](https://www.adyen.com/index-reports/embedded-finance-report-2024)). Platforms looking to compete must: - Go live quickly - Retain ownership of customer relationships - Capture revenue without regulatory drag - Scale globally without local entities - Add financial services when ready If your platform hasn’t embedded payments yet, you’re neither too early nor too late. Across markets, verticals, and company sizes, platforms are embedding payments and graduating to broader financial services. Today, it’s a compelling offering for your customers, and soon they will expect it if they don’t already. With embedded finance adoption still below 20%, the opportunity remains wide open. Now is the moment for SaaS platforms to invest and unlock new revenue streams. ## So who should you partner with to white-label embedded finance? With so many partners available, you might ask: *Why Adyen?* Having helped platforms navigate this complex landscape for years, we stand out for multiple reasons, one rising to the top: unparalleled speed and control. Powered by our own global acquiring and [banking licenses](https://www.adyen.com/knowledge-hub/tech-you-can-bank-on), Adyen combines the agility of a fintech with the trust of a bank. Coupled with our full tech stack and global footprint, this allows you to scale quickly and securely, without the delays or restrictions of third-party banking relationships. Adyen for Platforms delivers the best of both worlds: - Full monetization options, without PayFac registration: Unlock revenue potential immediately, without the regulatory burden of becoming a PayFac. - Built-in risk and compliance tools: Manage risk and ever-changing compliance requirements from day one, without extra integrations or resources. - Transparent commercial terms: No hidden fees or surprises, whether you’re a PayFac or not, our pricing is clear, predictable, and easy to manage. - Scheme flexibility on your terms: Register directly with card schemes if you want, without locking into a fixed model or adding operational complexity. Our streamlined approach lets you scale fast, stay compliant across regions, and retain complete control over your payment systems. Whether you’re a SaaS platform in a vertical such as hospitality like [Tessitura](https://www.adyen.com/knowledge-hub/tessitura-adyen-case-study), or healthcare like [ModMed](https://www.adyen.com/podcast/embedded-finance/ep4), or a growing B2B wholesale marketplace like [Faire](https://www.youtube.com/watch?v=OWFpi6dDkmQ), we help you move fast, stay compliant, and grow with confidence. ## Final thought Yes, becoming a PayFac may make sense for some. But for most, embedding payments through a regulated partner offers a faster, lower-risk path to growth. The embedded era is here. The question is no longer whether to embed payments, but how.  For more myth busting on PayFacs, check out [Adyen’s blog](https://www.adyen.com/knowledge-hub/payfac). ## Related Articles - [Fintech you can bank on: How global banking infrastructure sets fintech apart](#) — As fintech evolves, licensing and infrastructure are becoming critical to long-term success. In this piece, Mariëtte Swart, Adyen’s Chief Risk and Compliance Officer, explores why a partner with full banking and acquiring licenses is a game-changer for businesses today - and how Adyen’s setup gives it control over every layer of its platform. - [PayFac: What is a payment facilitator and should you become one?](#) — Discover everything you need to know about PayFacs and if it’s really the best way to go. - [PSD3 and PSR: what businesses need to know](#) — What the EU’s new payments rules confirm, what is still open, and how to prepare