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Payfac or direct merchant account: the underwriting difference
With a payfac, you're a sub-merchant on the payfac's account, so the payfac can review or exit you after you start. With a direct merchant account, an acquiring bank underwrites your business in your own name before you process. We place the direct route and introduce payfacs to sponsor banks. The bank decides either way.
We place payment processing, business banking and crypto rails for high-growth, complex businesses with institutions that take the industry, then watch the chargeback ratios, reserves and reviews that get accounts closed, with more than one rail so one bank's no doesn't stop the business. Approval is never guaranteed.
How Break Free Finance is paid: [to be added].
| Route | What it is |
|---|---|
| Payfac or aggregator account | You are a sub-merchant. The payfac can exit you. |
| Direct merchant account | Your name is on the account the bank approved. |
| Specialist ISO | A registered agent placing you into a bank program. |
| Payments and banking advisory | We prepare the direct-account file. |
What's the difference under the card rules?
Visa defines a payment facilitator as an entity that contracts with an acquiring bank to deposit transactions on behalf of sponsored merchants. The sponsored merchant contracts with the payfac, not the bank (Visa Core Rules, Apr 18, 2026). Square, for example, says it is a payment facilitator and not a bank (Square Payment Terms, Jul 30, 2026).
Which is better for a high-growth, complex business?
Payfacs onboard fast and review later, so a restricted category can surface after you've built volume. A direct account is slower up front because the bank underwrites what you actually sell. Expect a reserve and closer monitoring either way.
Can a payfac hold my money?
Yes, under its terms. Square's Payment Terms let it withhold payouts or require a reserve. See frozen funds.
When does a payfac have to move you?
Once a sponsored merchant passes $1 million in annual Visa volume, the payfac has to move it onto a direct agreement with the bank, with some exceptions (Visa Core Rules). Growing out of an aggregator is built into the card rules.
Where Break Free Finance fits
We're not a bank, processor, or money transmitter. We structure the deal, build the file, and place it with institutions in our network: decades of relationships with 40+ financial institutions and solution providers. The institution decides, and approval is never guaranteed. We can't release funds another provider is holding.