Visa Removes Separate Payment Facilitator Certification in CEMEA

Visa has discontinued its separate Payment Facilitator Certification Program in Central Europe, the Middle East and Africa (CEMEA), with immediate effect.

Under the revised approach, a payment facilitator no longer needs to enter into a separate certification agreement with Visa before commencing operations. The payment facilitator must, however, still be sponsored by an acquirer and complete all applicable registrations with the South African Reserve Bank (SARB) and the relevant card schemes through, or with the support of, its acquirer.

What does Visa’s PayFac certification change mean for payment facilitators?

The change potentially simplifies the process for establishing a Visa payment facilitator model by removing a separate layer of certification. It does not remove the broader regulatory, card-scheme or acquirer requirements applicable to payment facilitators.

Payment facilitators must continue to:

• enter into an appropriate agreement with a sponsoring acquirer;

• complete all applicable registrations or authorisations with SARB;

• be registered with Visa and any other relevant card schemes through their acquirer;

• comply with applicable card-scheme rules, risk standards and information-security requirements;

• conduct appropriate due diligence on sponsored merchants;

• monitor sponsored-merchant activity and transactions;

• comply with anti-money laundering, counter-terrorist financing and sanctions requirements; and

• ensure that payment facilitator and sponsored-merchant identifiers are correctly included in transaction messages.

Acquirers remain responsible for conducting due diligence, facilitating the required regulatory and card-scheme registrations, overseeing payment facilitators and monitoring their ongoing compliance.

Does the Visa change mean a PayFac can operate without approval in South Africa?

No.

The removal of Visa’s separate certification requirement does not, by itself, constitute approval to operate as a payment facilitator in South Africa.

The regulatory treatment of a payment facilitator depends on the substance of the proposed model, including:

• who contracts with and onboards merchants;

• how transactions are submitted for processing;

• whether funds are received or held on behalf of merchants;

• how settlement takes place; and

• which party is responsible for monitoring, disputes, chargebacks and merchant compliance.

Depending on the structure, a payment facilitator may require registration or authorisation with SARB, facilitated through its sponsoring acquirer, as well as registration with each relevant card scheme.

Applicable payment-system legislation, directives, anti-money laundering requirements, acquiring arrangements and card-scheme rules must also be considered.

What should South African payment facilitators do next?

Businesses considering a payment facilitator model should engage a proposed acquirer at an early stage to confirm the applicable SARB and card-scheme registration requirements, as well as the required contractual and operational arrangements.

Existing payment facilitators should review their agreements and compliance frameworks to determine whether any changes are required following the removal of Visa’s separate certification process.

The development is positive for the industry because it may reduce duplication and create a more streamlined route to launching and operating a PayFac model.

Acquirer sponsorship and the applicable SARB, card-scheme and compliance requirements nevertheless remain in place.

Final thought

Businesses considering a new PayFac model, or reviewing an existing one, should look beyond the Visa certification change and consider the full regulatory, contractual and operational framework applicable to their particular structure

Mahon Attorneys assists businesses with regulatory positioning, payment facilitator structures, commercial arrangements and related compliance requirements.

FAQs

Does Visa still require separate PayFac certification in CEMEA?

No. Visa has discontinued its separate Payment Facilitator Certification Program in CEMEA. However, this does not remove the other regulatory, card-scheme or acquirer requirements that may apply to a payment facilitator.

Does a payment facilitator still need a sponsoring acquirer in South Africa?

Yes. A payment facilitator must still be sponsored by an acquirer. The acquirer remains involved in the required regulatory and card-scheme registrations, due diligence and ongoing oversight.

Does a South African PayFac still need SARB registration or authorisation?

Potentially, yes. The regulatory treatment depends on the structure of the PayFac model, including how merchants are onboarded, how transactions are processed, whether funds are held on behalf of merchants and how settlement takes place.

Does Visa’s change mean a PayFac can start operating immediately?

No. Removing the separate Visa certification requirement does not, on its own, amount to approval to operate as a payment facilitator in South Africa. Applicable SARB, card-scheme, acquirer and compliance requirements must still be considered.

What should a business do before launching a PayFac model in South Africa?

A business should engage a proposed acquirer early to confirm the applicable SARB and card-scheme requirements, as well as the contractual and operational arrangements needed for the proposed model.

Should existing payment facilitators review their agreements after this change?

Yes. Existing PayFacs should review their agreements and compliance frameworks to determine whether any updates are needed following the removal of Visa’s separate certification process.