The KYC check also involves checking potential sub-merchants against the Mastercard Member Alert to Control High-Risk Merchants (MATCH) list and the Office of Foreign Asset Control’s list of individuals with criminal histories or ties to terrorism.

The underwriting process is relatively basic, though, regarding payment facilitators, and most of these processes are automated unless there are red flags.

The role of a payment facilitator is less elaborate than that of a payment processor, but it does involve several merchant services.

That includes:

• Sub-merchant onboarding: The process of accepting new merchant applications and underwriting them to avoid excessive risk or fraud.
• Monitoring transactions: Payment facilitators are entirely liable for fraudulent transactions or errors that occur at the hands of their sub-merchants, so they typically take extreme measures to prevent problems from arising. That includes using software that records and analyzes transactions for suspicious or fraudulent behaviors.
• Investigations: When suspicious transactions arise, payment facilitators typically investigate the responsible sub-merchant and determine any actions that need to be taken as a result of the investigation.
• Merchant funding: Payment facilitators oversee the process of transferring funds from the customer to their sub-merchants. This process can take several days to several weeks, depending on the merchant, the service or product provided, the payment method, and the sub-merchant’s processing history.
• Chargeback management: When chargebacks occur on sub-merchant transactions, the payment facilitator handles the process of reviewing the chargeback, submitting documentation, and transferring funds to the end customer’s bank when deemed necessary.