Podcast: Vantiv’s Danner Calls Payfacs ‘Epitome of Tech Companies’

Chuck Danner, GM of Payfacs for processor Vantiv, admires not only the software expertise of payfacs but also their creative nature in finding new verticals to help with their value-adds and efficiencies. “We’re reliant on these companies for new ideas,” Danner said in this week’s edition of the PaymentFacilitator.com podcast.

Danner said payfacs are ideal for emerging markets that were either less complicated, non-existent or not tech-enabled, such as healthcare, ride-sharing, crowd funding and vending machines. Because the payfac model is so young, the need and opportunities for payfacs are outpacing the supply. “Growth is phenomenal,” Danner said, but closing that gap will take “maturity and time.”

Seeing a void and filling it are two very different tasks, Danner admits. While the technical aspects of payfacs are relatively simple for software companies, weaving through the maze of requirements to become a payfac is the opposite. A landscape with risk, fraud, liability, regulations, rules, onboarding, compliance, reconciliation, and underwriting must be navigated, and companies like Vantiv are ready to help.

Danner discussed one of his company’s newest tools to boost payfacs’ ability to attract small merchants, OptBlue from American Express. Vantiv has been offering the program for a few months, and the promise of its streamlined and faster funds settlement has been attractive to payfacs, Danner said. Before OptBlue, there were delays in settlements as intermediaries dealt directly with American Express, Danner said.

“We were probably sitting about 50-50, with 50 percent of our payment facilitators just decided not to accept American Express because of that,” Danner said. “With OptBlue, American Express has provided us the capability to authorize, settle and fund American Express. We’re seeing the adoption rate of American Express go up within our payment facilitators now that they’ll be able to do that all in one settlement stream, one funding stream, one reporting stream and be able to reconcile their transactions.”

 

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