Key Questions to Ask a Payfac Business

Unit Economics and Traction

  • Portfolio metrics by month

  • Active MIDS / sub merchants

  • Number of MIDS / sub merchants added

  • $ payments volume processed

  • Net revenue received broken out between processing and monthly/annual fees

  • Attrited accounts/closed or inactive

  • Breakdown of MIDS/sub merchants by merchant categories or groupings

  • Losses, fraud, chargebacks - how much? How are they handling it?

  • Sales channels

    • Direct or indirect

    • Third parties

    • If they pay anyone else beyond processing partners

  • Acquisition costs

    • Per Month

    • What is included in these costs

  • How many merchants do you need to reach profitability?

    • Scenario analysis for high growth vs profitability

  • CAC

    • What exactly goes into this? Payroll should be included

  • COGS

    • Who gets what? Assuming transaction COGS are interchange.

  • Who is your acquiring bank and what is the relationship structured like?

  • Take rate

Get as much information by MIDS as possible

Overview

  • Value proposition

  • Description of core offering

    • Pricing

    • Devices

    • Integrations to other POS systems

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