Payments Processing and Channel Synergies among Merchant Acquirers, PayFacs, ISVs and VARs [Untangled Market Research]
- Gianluca Luke Caccamo
- Apr 4
- 12 min read
Updated: Oct 14
Executive Summary
This report provides a comprehensive analysis of three interconnected financial technology markets: Independent Software Vendors (ISVs), Payment Facilitators (PayFacs), and Merchant Acquiring/Payment Processing. All three markets are experiencing significant growth driven by digital transformation, cloud adoption, and changing consumer preferences.
The PayFac market shows the highest growth rate at 28.4% CAGR, followed by the ISV market (13.2 - 23.8% CAGR depending on the source), and the Merchant Acquiring/Payment Processing market (7.68-14.5% CAGR). These markets are increasingly interconnected, with software companies (ISVs) adopting payment facilitation models (becoming PayFacs) and leveraging payment processing infrastructure to create seamless customer experiences.
Let's deep dive into each market and how they intertwine through integrations, channel and distribution strategies.
1. Payment Facilitator (PayFac) Market
Market Size and Growth
The PayFac market is experiencing rapid growth:
Gross Payment Volume (GPV): $929 billion in 2019, expected to reach over $4 trillion by 2025
Growth Rate: 28.4% CAGR (the highest among the three markets analyzed)
Transaction Revenue: Expected to reach $15 billion by 2025
Projected Growth of PayFac Gross Payment Volume from 2018 to 2025
Number of Payment Facilitators
966 payment facilitators in 2018, increasing to 1,075 in 2019
Projected to reach 2,381 PFs by 2025
Growing at a CAGR of 13.8%
Projected growth of payment facilitators from 2018 to 2025
