The payment facilitator model is an arrangement for card acceptance in which a single registered provider contracts with an acquirer and then onboards many smaller businesses as sub-merchants, and the provider at its centre is described in full under payment facilitator (PayFac). "Model" is added when people discuss the approach as a business or platform strategy, for example when a software company considers becoming a payment facilitator rather than referring its customers to an acquirer.
In the model, the facilitator handles onboarding, underwriting, settlement and risk monitoring for its sub-merchants, while the sponsoring acquirer remains responsible to the card networks. The facilitator earns the difference between what it charges sub-merchants and what it pays the acquirer, and it can offer fast, simple sign-up embedded in its own software. In return it takes on liability for sub-merchant losses and must meet network requirements, including payment facilitator registration.
The model is the formal, scheme-recognised version of merchant aggregation. Software platforms that want some of the benefits without the full responsibility often use a managed or "PayFac-as-a-service" variant, in which a larger provider performs most facilitator functions on their behalf.