Payfactory and the Future of Embedded Payments

Q&A with Payfactory founder Ruston Miles

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One of our favorite types of startups to invest in at Cortado are those who are building underlying technologies that enable businesses and industries to operate more effectively. Our recent investment in Payfactory is a great example of this.

Payfactory is a Tulsa-based startup which is an up-and-comer in the embedded finance space. If you’re not familiar, embedded finance (or EmFi) is the integration of financial services or products (such as, in Payfactory’s case, payments) within a nonfinancial services company’s product or customer value chain. Though the term may be new to you, you’ve probably seen examples of embedded finance in action, while getting a home loan on Zillow, or opting for a buy now pay later service like Klarna or Affirm at checkout on your favorite ecommerce store. For SaaS companies, EmFi products can be a great way to make the customer experience more frictionless, while also increasing revenue potential per customer through new revenue streams. Because of these benefits, EmFi is on the rise; EY estimates that the embedded finance market will grow $264B in 2021 to over $600B by 2025.

I had the opportunity to sit down recently with Payfactory founder, Ruston Miles, and learn more about embedded finance and how Ruston sees Payfactory building and competing in the space over the next several years.

Susan Moring: You’ve been in the payments space for quite some time. Can you talk about your experience founding Bluefin, your first fintech company?

Ruston Miles: I’ve been in the payments and telecommunications industry since 1994, and in 2002 I founded Bluefin in Tulsa, a payments processor and gateway provider that was later acquired by Capital Payments. After the acquisition in July 2012, Capital Payments adopted Bluefin’s name and I became the Chief Innovation Officer and later the Chief Strategy Officer. With the merger, Bluefin reached #6 on the Inc. 500’s “Fastest Growing Private Companies in the US.” From this position, I led the pivot of the company from a payments gateway to the leading payment security provider, developing and launching a point-to-point encryption solution (P2PE) for the protection of credit and debit card data entered at the point-of-sale. Remember when there were hundreds of credit card breaches in the news every year starting back in late 2013? Most large retailers have implemented P2PE now and this has largely stopped those types of breaches. Bluefin was the first North American-based company validated by the PCI SSC (Payment Card Industry — Security Standards Council) for a P2PE Solution in March 2014 and today serves many of the largest airline, retail, restaurant and car transportation brands as well as thousands of other major companies, municipalities and universities across North America, Europe and LAC.

SM: What did you learn with Bluefin that made you want to start Payfactory?

RM: While I was still at Bluefin, I noticed a negative merchant sentiment toward payment processing that became even more pronounced in 2020 due to the pandemic. Restrictions strained all aspects of processing, including sales onboarding and service interactions, resulting in merchant frustration with new account signup, onboarding, reporting and service experience. The trend towards “consumerization” in the software industry improved the cardholder experience greatly, but the merchants’ experience was still frustrating and high friction. What was needed was a whole new process that combined ongoing innovations in the payments industry with the reality that software providers now control most payment acceptance experiences. Enter Payment Facilitation.

Signing up and going live with payment acceptance historically has taken 5–8 days and dozens of documents (e.g. driver license, business license, financial statements, void check, bank statements, certificate of incorporation, etc.) for onboarding before a payment could even be accepted — this was simply too long for small businesses and merchants.

  • I recognized the need for a new type of payment facilitation platform that worked at the speed of software and that was completely embedded in the software via APIs that control the entire payment experience for the business and their customers, including signup, onboarding, payment acceptance, reporting and service.
  • I founded Payfactory because I truly believe that payment facilitation is the future of merchant processing. I wanted to create a payment platform that was plug and play for ISV (independent software vendor) and vertical SaaS software, enabling these companies to swiftly implement payment processing into their software with minimal work while benefiting from an attractive revenue sharing model, which is missing from much of the new group of payment providers.

SM: What do you see as the future of the payments space?

RM: I wrote a blog post about this recently, and would summarize the major trends as:

· Faster Payments: Businesses get behind real-time payments

· Embedded Finance: Lending options become a standard in the payment mix

· Software Takes Over: SaaS payments are the new normal

· Sustainability in Payments

Real-time, faster payments will be a big one. Faster payments (where the transaction and fund settlement occur in real-time or near real-time — regardless of using a card, a P2P service or ACH) are no longer negotiable but are a must-have, thanks in part to the pandemic which created consumer expectations for faster everything. With the Federal Reserve’s recent introduction of the FedNow Service, it’s time to get ready for faster payment acceptance and funding. I believe continuous settlement will be the norm coming out of 2025.

Consumer demand and preference will continue to drive payment trends. Integrating, embedding and changing the way we process transactions takes time to implement across the payments value chain. But the continued drive toward digital, one-touch commerce and an invisible, convenient payment experience is underway across industries, with more to come from standards including PCI DSS 4.0 and ISO 20022, all of which will make transactions more secure and seamless.

SM: How does Payfactory fit in?

RM: Embedded Payments through payment facilitation is the future of merchant payment acceptance and is in-line with industry trends for faster, more secure and seamless payments. I see Embedded Payments as the first wave of the Embedded Finance (EmFi) evolution that is underway where vertical SaaS providers will extend their offerings to manage more than just the vertical work and payment acceptance for businesses. I see these software companies helping their business customers run their entire business with a host of EmFi services such as payroll, billpay, POS lending, BNPL, treasury, rewards/loyalty programs, prepaid/debit/credit card issuance and employee expense management. Payfactory’s core platform already performs the underwriting, onboarding, risk management and money movement functions that are common across all EmFi services and we are working to build the rails for EmFi providers to extend their service to the vertical SaaS providers that are integrated to Payfactory.

SM: Why did you choose to build Payfactory in Oklahoma? What has your experience been growing a tech startup in Tulsa?

RM: I’m originally from New Orleans. I came to Tulsa for university and decided to make Tulsa my home. When I started Bluefin there was virtually no investment scene here. A friendly banker gave me a small loan to get going and I spent a good deal of time building every aspect of the business with very little outside assistance. This time around, the investment situation has vastly improved, and I saw that we could not only build another great payment company in Tulsa, but we could grow it much faster with great investors in Oklahoma like Cortado who not only invest capital to accelerate growth but also provide assistance, connections and access to resources to grow even faster.

Want more startup stories? Follow Cortado’s Medium page for long-form posts about the startups we’re funding in Oklahoma and the broader Midcontinent region.

At Cortado Ventures, we invest in pre-seed and seed stage startups with a focus on energy & logistics, life sciences, and the future of work. If you are a Midcontinent startup or looking to invest in these startups, contact us to learn more.

The extraordinary life of a payment transaction – A multilevel game

The changing payments landscape could be compared to three-dimensional chess: a multilevel playing field where every move simultaneously impacts players on every board. Over time, players are eliminated, leaving only the most strategic who can execute three-dimensionally. In a similar way, each payment transaction reverberates through a multitiered ecosystem as the payments industry rolls along, like a mighty river, absorbing companies and shedding players.

Allen Kopelman, co-founder and CEO of Nationwide Payment Systems, has seen consolidation at all levels of the payments ecosystem. Recalling the early shock waves in the 1990s, when Super ISOs began acquiring smaller ISOs, he said the trend was just getting started.

“All these super ISOs gobbled up smaller ISOs and moved on to major processors,” he said, citing Global’s $4.3 billion acquisition of Heartland Payment Systems in 2015; Fiserv’s and First Data’s merger, which generated over $4 billion in cash flows in 2019; and FIS’ $43 billion acquisition of Worldpay in 2019, which became a $17.6 billion spinoff in 2023. “Each time a major processor is taken off the table, it leaves larger, high-risk merchants with fewer choices.”

Multiple playing fields

Mergers and acquisitions affect downstream relationships, Kopelman added, stating that with each acquisition, there’s a new sheriff in town, who wants to rip out and replace everything. “They want to renegotiate contracts; they want to renegotiate the costs,” he said. “I saw one ISO send out letters to the merchant level salespeople [MLSs] who left after they began raising merchant fee structures and delaying residual payouts, begging them to come back.”

Consolidation impacts all levels of commerce, Kopelman noted, including processors, technology and POS service providers and payment facilitators. Technology-level players are buying multiple gateways, and POS brands are getting into payment processing, he added.

“After ISOs and MLSs helped leading POS companies build their businesses, we’ve seen them turn their backs to us and sell direct to merchants,” he said. “Even the card brands, like Visa and Mastercard, have evolved beyond their original business models into technology companies.”

Visa Acceptance Solutions, for example, is designed to help acquirers create custom payment solutions, Kopelman stated. The company’s website describes the platform as a community hub that connects global technology and payments leaders and helps them build custom solutions. “A regional acquirer needs to create a custom payments solution for their merchants, some of whom offer subscription services,” Visa representatives wrote, stating that Visa Acceptance Solutions connects acquirers to the company’s partner ecosystem, broader Visa Acceptance Platform and variety of leading-edge capabilities and solutions.

Grownup vertical strangers

Payment transactions have evolved from one-and-done sales to real-time interactions between customers and brands, experts have noted. This new digital commerce world has pushed transactions out of their cocoons and into tech-driven solutions. By directly embedding transactions into products and services, independent software vendors (ISVs) transform standalone tools into supporting features of verticalized solutions.

Payment Technology Trends ISOs and ISVs must watch in 2023, a report published by NMI in February 2023, noted business models changed in the early 2020s when consumers and businesses shifted to digital and touchless commerce solutions. Demand for innovative new payment technologies is growing, according to NMI researchers, who found most of the 1,000 consumers they surveyed in October 2022 were eager to try new payment solutions.

“As a payment solutions provider or software vendor, your clients expect an integrated solution with a variety of features and payment methods,” NMI researchers wrote. “ISOs and ISVs who provide POS solutions, loyalty programs, CRM applications, and payment methods like contactless payments, BNPL and biometric payments will differentiate themselves as merchant-first providers.”

B2C, B2B convergence

Ruston Miles, founder and CEO of Payfactory, agreed that flexible commerce-enablement platforms can help consumer-facing brands and B2B enterprises attract and retain customers. In addition, he pointed out that automated, self-attended technologies enhance both B2C and B2B commerce models by creating real-time interactive customer experiences.

“Payments have evolved significantly from being stand-alone solutions to being embedded in various verticals through a process driven by technological advancements, changing consumer preferences, and the need for seamless and convenient transactions,” he said. “After the dot-com bust in 2002, many software developers, including myself, started creating web-based software to manage real-world businesses more efficiently.”

These early efforts created the cornucopia of vertical SaaS “system of record” companies we see today, many of which offer an array of practice management and donor management systems, Miles noted. He founded Bluefin in 2002, he noted, primarily to serve these ISVs with payment gateway and payment security services, and went on to establish Payfactory in 2020, to bring payment facilitation-as-a-service to these same companies.

Software and payments have been merging for some time and have created a true fintech experience of embedded payments in software, he added.

Speed’s double-edged sword

In the payments industry’s haste to implement real-time transactions, experts are warning of unintended consequences such as increased risk of errors and fraud. A Nov. 1, 2023, report by AutoRek, a financial services software provider, found a majority of U.S. and UK enterprises lack the infrastructure to support faster payments.

In fact, 23 percent of executives surveyed were in favor of delaying RTP implementation due to lack of internal skills and technology, according to AutoRek’s report Payments industry outlook 2023: strategic priorities, operations, regulation and data.

After polling financial services executives, software developers and IT specialists to gauge their firms’ readiness for real-time payments, researchers found 54 percent of respondents agreed that inefficient back offices were the biggest roadblock to meeting real-time payment demands.

Nick Botha, global payments manager at AutoRek, called real-time payments a double-edged sword for businesses that facilitates speed and convenience but creates operational obstacles. With growing customer demand for instant payments, he urged firms to increase efficiencies now and get ahead of the curve.

“Firms that do not adapt their operations could find themselves in a world of regulatory hurt,” he said. “Eliminating the bottlenecks to delivering real-time payments starts with upgrading the old-school legacy infrastructure that is no longer fit for purpose.” A copy of the report is available at

Fast payments, faster fraud

On the fraud front, attacks on authorized push payments (APP) are escalating. This is according to the UK’s Payment Systems Regulator’s latest APP fraud report, published Oct. 31, 2023, which found criminals exploiting faster payment methods to access transaction and accountholder data.

Chris Hemsley, managing director of the PSR, affirmed the PSR will continue to report on this issue while collaborating with the UK’s Financial Conduct Authority to identify areas in need of improvement.

“Our commitment to transparency and the forthcoming mandatory rules are key to strengthening efforts to prevent these frauds from happening in the first place,” he said in a statement. “Over the coming months, we will be bringing all payment firms into new reimbursement arrangements to give more consistent protection across the board. This is important because we can see from today’s report that this has not always been the case.”

Evgeniy Ivantsov, chief marketing officer at FYST, characterized the PSR’s APP fraud report as both a wake-up call and a report card for payments and financial services providers.

“The PSR’s decision to release performance league tables for payment companies on the issue of APP fraud underscores the growing importance of transparency and accountability in safeguarding consumers and businesses,” he said, noting that the league tables show those who excel and those who perform poorly in fraud prevention.

Getting to yes

Roger Fisher and Bruce Patton’s business best-seller, Getting to Yes: Negotiating Agreement Without Giving In, was reissued in 2011, 30 years after its initial publication, to address a flatter, faster and connected world in which the authors had observed a paradigm shift from pyramids of power to networks of negotiation where participants negotiate on different levels. “At one level, negotiation addresses the substance; at another, it focuses – usually implicitly – on the procedure for dealing with the substance,” they wrote.

Following this logic, early payments might be considered single-level negotiations between a POS device and processing host that were ferried back and forth over a dial phone line. Over time, payments industry stakeholders layered additional technologies and value-added services on top of these transactions, creating multiple playing fields.

Fast-forward 40 years or so, and transactions are played on multiple boards by ever-evolving entities. As experts have noted, today’s supervisor or channel partner may be tomorrow’s direct report or direct competitor. And through it all, moving pieces on all the boards and even the rules of the game keep changing for payments industry stakeholders.

In this dynamic environment, transactions live everywhere, as features of verticalized software and as ongoing conversations among consumers, merchants and brands. Even declines are not final, according to FlexCharge, a fintech startup that transforms declines to approvals in real time and at no cost to consumers.

FlexCharge is one more example of the everchanging, multilevel game of payments where there is no final answer, because tomorrow’s transactions will always be smarter, faster, more secure and more transparent than the technologies we know today. end of article

Dale S. Laszig, senior staff writer at The Green Sheet and founder and CEO at DSL Direct LLC, is a payments industry journalist and content strategist. Connect via email [email protected], LinkedIn and Twitter

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

Tulsa Startups to Watch in 2023


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Tulsa, Oklahoma is rapidly emerging as a dynamic hub for forward-thinking startups and entrepreneurial ventures. With a business-friendly climate, low cost of living, and access to top-tier talent, Tulsa provides an optimal setting for startups to flourish.

The city government has implemented several pro-business policies and regulations, including streamlined permitting processes and incentives for companies that invest in the local economy. With relatively low taxes and an abundance of talented graduates from local universities and colleges, Tulsa is a magnet for entrepreneurs.

My podcastStartup Hustle, highlights startups in a different city each month. Tulsa may not be among the first places that come to mind when thinking about tech hotbeds in the United States. But these 11 exceptional companies are indicative of the city’s entrepreneurial climate.

Article continues after video.


A survey conducted in 2020 found that 78 percent of respondents reported experiencing at least one symptom of work-related stress. The most prevalent are irritability, fatigue, and feeling overwhelmed. Paul Slater and Ryan Tubbs wanted to help people find relief by founding Billion Minds.

Billion Minds is a remote work skills development platform that aims to reduce work stress and make work engaging again. The software focuses on helping people develop skills to more effectively manage a work-life balance by using experiential learning.


While it’s widely recognized that there’s a significant shortage of talent in the IT industry, particularly in software development, it’s worth noting that talent wars are being waged across all sectors, including SBA lending. Shatterbox, led by CEO Dustin Baker and chief learning officer Alan Faulk, has taken up the challenge of training a new generation of professionals to bridge this gap.

Shatterbox recruits and trains talent through a 1-year apprenticeship program, which offers benefits in terms of hiring and learning for SBA lenders. Lenders also get a comprehensive toolkit to mentor their apprentices effectively throughout the year.

Boddle Learning

The pandemic has had an adverse impact on children’s education. Students in the U.S. will likely experience five to nine months of learning loss on average. They need help catching up, and Boddle Learning can give it to them.

Clarence Tan and Edna Martinson created this online educational platform that provides interactive and gamified learning experiences for K-6 students. It offers a range of educational games and activities covering various subjects, including math, reading, and language arts. On the strength of $5.6 million raised in multiple funding rounds from nine investors, it’s been used in more than 140,000 U.S. classrooms.


There are only 32 Native American banks or credit unions in the U.S., which represents less than 1 percent of all banks in the country. Native Americans are more likely to be credit invisible and travel further to access bank branches, which hinders their financial inclusion. Totem wants to change that.

Co-founder/CEO Amber Buker, an enrolled member of the Choctaw Nation, and co-founder/CTO Richard Chance, a member of the Cherokee Nation, created Totem, the only digital bank founded and funded by Native Americans. A portion of the merchant fees received from every transaction made with a debit card is shared with tribal partners. Totem has raised $2.4 million in two funding rounds.


The government introduced the A2P 10DLC (Application-to-Person 10-Digit Long Code) standard to combat unwanted text messages, unsolicited marketing offers, and other spam. But compliance can be challenging for many small businesses. Co-founder/CEO Martin Langelo Lien and co-founder/head of growth Matt Morfopoulos launched Volt, an easy-to-use dashboard that allows users to monitor their message health and proactively address any issues.

It has integrated 10DLC checks that ensure messages are delivered reliably, helping users avoid penalties and disruptions to their service. On average, businesses using Volt achieve a delivery rate of 97 percent and an engagement rate of 52 percent. The company has raised $3.3 million in three funding rounds.


In the U.S., medication non-adherence leads to preventable hospitalizations and deaths and costs about $500 billion in healthcare spend every year. PatchRx, the brainchild of CEO Andrew Aertker and Gavin Buchanan, is a data-driven technology platform that provides remote therapeutic management for healthcare providers and patients. It has raised $1.6 million in three funding rounds.

It uses a combination of hardware, software, and data analytics to help patients adhere to their medication schedules and track their health progress. The platform’s smart pill bottle cap connects to a patient-facing mobile app, and the dispenser can be loaded with up to 90 days of medication. The app, which rewards patients for adherence, has provider-level compatibility, enabling physicians and care providers nationwide to improve patient health outcomes.


FanSub is the first all-in-one platform for managing young and/or unknown performance artists’ booking, marketing, and live experiences. The interactive platform allows users to create, ticket, and livestream experiences anywhere from the world’s most iconic venues to a home studio.

Founded by CEO Chris Davis and CTO Brandon King, FanSub returns 100 percent of ticket revenue to the creator or organizer. The event or gig can be livestreamed from anywhere in the world. The startup recently raised $2 million in a pre-seed round.

AirWise Solutions

Drones are often associated with providing stunning aerial views. However, commercial drones have proven to be remarkably versatile tools, serving a multitude of purposes such as conducting surveys of land and water, aiding search and rescue efforts, and streamlining inspection and maintenance processes.

AirWise Solutions simplifies commercial drones’ complex needs, which include utilizing different software for flight planning, image and data processing, and navigation. Co-founder/CTO Josh O’Leary and co-founder/CEO Zac Clark are helping make drone use in the field effective and easy. The company’s hardware includes a reliable hexacopter design and hot-swappable cameras with RTK/PPK GPS for enhanced precision.


Another social media company? Yes, but this one is a bit more, let’s say professional. NGHBR enables in-person, real-time networking.

CEO Brandon J. McGill launched this online social platform and mobile app intended to allow users to find out more about the people around them in real time. Its geo-specific community building lets users find and connect people with different skill sets that may benefit their business.

Solace Vision

Solace Vision is a text-to-3D creation tool powered by AI and natural language. The mission is to make 3D creation more accessible while also giving existing modelers more power to create.

Co-founders Shawn Gaetano and William Brandes have created natural language tools that can open the door to modeling for many people who would never otherwise model. Users can simply describe what 3D model they want to create through text, and the software creates it automatically. It also provides default actions to modify the finished model.


Everyone hates wasting time in the waiting room at the doctor’s office. And if you have to go to the emergency room, the situation is even worse. The average wait time for patients is two hours. Get me Arriv, stat!

Arriv is a digital platform designed for on-demand healthcare facilities, developed under founder/CEO Alex Zubey. It offers the highest converting online check-in solution in the healthcare industry and gives patients the option to select check-in times during low-traffic periods. During busy surges, patients who checked in through Arriv knew they had long wait times, reducing the frustration caused by poor expectation setting.


Payfactory is a fintech payment facilitator for software platforms. It meets the growing demand for immediate merchant approval, next-day funding, and split payments through its payment facilitation (PayFac) model. The platform allows businesses to integrate payment acceptance online, in person, or over the phone effortlessly. It also enables software vendors to own the merchant experience and minimize risk.

CEO Ruston Miles and co-founder/head of technology Justin Stanley created Payfactory to serve software companies seeking the benefits of PayFac and a higher level of security, service, and speed. Previously, these benefits were only available at high cost and significant risk. Payfactory shares revenue with platforms and offers competitive rates for the businesses with $0 monthly-fee options.

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3 Ways to Successfully Expand Your Business Internationally

Taking your company overseas doesn’t come without its challenges. One founder explains the art of scaling a business abroad–and how to avoid common pitfalls.


With the right preparation, U.S. businesses can enjoy a number of benefits from going global.

Scaling abroad has the potential to increase a company’s market reach and revenue, give it access to a new pool of talent, and diversify its assets. In a 2021 survey of companies in the U.S., U.K., France, and Germany by the international employment firm INS Global, 42 percent of the businesses considered their best growth opportunities to be outside of their domestic market.

Gerardo Nasser, founder and CEO of Grupo Shogua, started planning his company’s expansion after the onset of the pandemic. Although his Mexico City-based company, which operates food and beverage, retail, and convenience stores in airports, resumed business shortly after the Mexican government lifted its two-month quarantine restrictions, Nasser started to see the risk of operating in only one country if that economy experienced a downturn.

On top of that, Grupo Shogua had already saturated the Mexican market. In 2007, its brands began to enter the nine most important international airports in Mexico, Nasser says, and there were no others that were large enough to pursue. With over 900 employees and 90 stores, Nasser knew it was time for Grupo Shogua to go abroad.

For the past three years, the team at Grupo Shogua has been researching and planning the company’s international expansion. It’s setting up shop in major airports in Panama, Colombia, and Brazil, and expects to be operating in Panama by the end of 2023. After overcoming a number of challenges along the way, Nasser has garnered advice for other businesses looking to expand internationally.

Research the barriers to entry

When Nasser and his team started searching for countries to enter, they researched the culture, language, and laws of their potential options. The team decided to expand to South American countries because they were most culturally similar to Mexico.

It’s important to identify an available market and cultural match for your business in a new country, but Nasser says you can’t forget to research the barriers to entry like legal or technical complications. Commercial space in airports is limited, creating an inherent barrier for Grupo Shogua brands to enter them in new countries. ​​”There’s a lot of politics and lobbying around it,” Nasser says. “Big companies all want a piece of these spots in airports.”

Nasser and his team researched the political and lobbying processes in their target countries and came prepared to show their added value, like support for renovations and willingness to work with smaller companies.

Send a hiring team who believes in your vision

One of the most difficult parts of international expansion, Nasser says, is finding trusted talent in the new countries. Initially, the Grupo Shogua team considered hiring and training remotely, but Nasser quickly realized it would be impossible to get new employees to understand their culture, mission, and vision without being there in person.

So Nasser sent a team of Grupo Shogua higher-ups to recruit and train talent in the new countries for three to six months, depending on the size of the new team. Nasser says after years of believing in the company’s vision and having a say in the business, the directors were willing to travel without much incentive. “It’s not something that motivates just me. It also motivates my team. They want to grow with the company,” he says. “They share this vision, and they want to do it as well.” 

Show up and build relationships

You’ll face new competition abroad, and Nasser says his international competitors weren’t happy about his arrival, encouraging lawyers and lobbying groups not to work with him. 

So, Nasser says he worked to build up his company’s reputation. He says he made plenty of visits to the new countries over the past two years and went “knocking on doors” of commercial offices, lawyers, and other people involved with the airport sector. “You have to show yourself. You have to be there,” he says. “You have to be trustable for them to understand you’re here to do things right.”

He advises business owners to make sure their company is well-established at home with an experienced team and stable operations, because they’ll need to travel to new markets often to create bonds and earn a reliable reputation.

Payfactory: Pivoting Through the Advancement of the Payment Revolution

Episode 9

FULL | Published on: 18th Apr 2023

In this podcast episode, Michael Basch, Founder and Managing Partner at Atento Capital, interviews Ruston Miles, CEO of Payfactory, and Marvin Jones, Head of Strategic Partnerships / Co-Founder of Payfactory, a company that empowers leading platforms with immediate onboarding, payment acceptance, and payouts through a suite of restful APIs. Ruston explains how observing macro trends in the economy led him to the success of previous startups and how Payfactory is positioned for the future of payments, suggesting that if you are observant and produce a solution, your best years in business could happen during the worst years for the economy. Tune in to gain insights into the entrepreneurial journeys of Ruston and Marvin, as well as the vision behind Payfactory and how it is set to shape the future of payments.

About the Podcast

BeAtento Podcast

Atento Capital is an early-stage investment firm focused on unlocking unsung potential. From our offices in Tulsa and NW Arkansas, leading markets for innovation in the heartland, we identify high-potential ideas and individuals and then invest the early-stage funding and human capital needed to take ventures from 0-1 and 1-10. The BeAtento Podcast explores the founders, partners, funders, and systems that work together to transform the heartland into the nation’s most equitable tech hub.

Deeper payments, wider rev share with trusted partner

Payfactory was founded in 2021 by CEO Ruston Miles, a 23-year payments industry veteran previously known for starting payment and data security company Bluefin and architecting the company’s core PCI-validated point-to-point encryption (P2PE) solution. Seeing payment facilitation as the future of merchant acquiring, Miles envisioned a payment platform that would be faster, more secure and plug-and-play for ISV and SaaS providers.

This adaptable platform would enable each client to incorporate payment processing into their software with minimal work while benefiting from an attractive revenue sharing model. Payfactory was built with these objectives in mind, along with the following guiding principles: agility—a simple, fast payments integration for all software platforms; seamlessness—a frictionless, fast merchant account go-live process; and integrity—no sacrificing of human service and support for the sake of speed and flexibility.

Lucrative partnership opportunities

As he reflected on Payfactory’s rapid growth—which was further accelerated by investor backing from Atento Capital, Cortado Ventures and Bluefin Payment Systems—Miles said the company is on the cusp of an evolving payfac revolution that is benefitting ISOs, ISVs and acquirers.

“Payfac can no longer be just passive plug-ins but must also be flexible and seamless, without sacrificing security and support,” he said. “Our embedded payfac model allows ISOs, agents and ISVs to know their merchants and reduce overall risk of merchant fraud while providing a product that can be quickly implemented with a lucrative revenue-sharing model.”

Miles went on to say that Payfactory is enhancing both its partner and customer portals to provide software partners even greater ownership of the processing relationship. These additional features are in line with the company’s self-service model, he stated, adding that additional product releases and strategic partner announcements are underway.

Partner-centric leadership

Payfactory currently employs 14 specialists, with near-term plans to further expand the team. The company’s go-to-market teams, led by Miles, include Josh Tietsort, head of finance; Angela Mayer, head of partner success; Melissa Migliore, head of payfac operations; and Jeremiah Remski, director of business development.

Payfactory representatives described the company’s integrated payment processing for ISV and SaaS platforms as gateway-friendly and compatible with any ISV’s current payment gateway, which they indicated can significantly speed time to market and increase flexibility.

Payfactory offers a preferred payment gateway option, which the company indicated can be implemented quickly with minimal effort through its suite of restful APIs. All transactions are backed by state-of-the-art tokenization, the company noted, with the option of leveraging PCI-validated P2PE for card-present payments to derive the highest level of security.

Wealth of opportunity

Remski additionally cited the following key partnership benefits:

  • Flexibility: Providing a gateway-friendly payment facilitator platform means that software vendors can quickly enable Payfactory through their current payment gateway or work with Payfactory’s preferred payment gateway.
  • Speed to market: Architecting a platform that is designed by developers for developers and offers a full suite of restful APIs enables fast integration and automation of the payment process and user experience, from onboarding to transacting and payouts.
  • Security:Offering PCI-validated P2PE provides the highest level of security by incorporating end-to-end encryption for card data transmission and state-of-the-art tokenization for stored and recurring payments.
  • Service: Providing direct, human-centered support for ISV and ISO partners, throughout every phase of implementation, creates trusted, long-lasting partnerships with opportunities for growth through optional sales, marketing and customer support for partners and their merchants.
  • Revenue opportunities: Offering an attractive revenue-sharing model and complete merchant control for partners creates lasting partnerships based on profitability, mutual respect and trust.
  • Service options: By offering a range of service options, from full service to Payfac-as-a-Service, Payfactory enables partners to customize and control the payfac experience while eliminating the time and expense of building in-house infrastructure.

KIS Technologies announces partnership with Payfactory to simplify payment processing, enhance client experience


04 May, 2022, 07:15 ET

PLANO, Texas, May 4, 2022 /PRNewswire/ — KIS Technologies, LLC, a leading provider of kiosks, ticketing and parking technology, announces a new partnership with Payfactory. The collaboration meets KIS Technologies’ goals to accelerate the payment process, expedite onboarding and offer a higher level of service to clients.

Payfactory’s five-minute onboarding simplifies the payment process for new clients and facilitates next-day funding for all card types. As a fully integrated solution, Payfactory reconciles payments within the software, eliminating the need for organizations to perform the task manually. Payfactory provides encrypted web forms and PCI-validated P2PE so that online and in-person transactions are completely secure and PCI security paperwork and assessments are minimized or in most cases eliminated.

“Streamlined integration and accelerated speed of onboarding position Payfactory to be the ideal payment partner for KIS Technologies’ innovative ticketing and parking solutions,” said Ruston Miles, Payfactory CEO. “Together, we can level up efficiency and provide a seamless process for clients, allowing them to better meet the needs of their patrons, fans and guests.”

“The KIS Technologies-Payfactory partnership will remove roadblocks with current payment processing solutions and allow KIS to focus on the customer experience”, said Ron Wilson, president of KIS Technologies.

“We’re dedicated to offering easy-to-use hardware and software solutions,” added Wilson. “Partnering with Payfactory ensures our ticketing and parking products will offer even more value, simplifying payments and enhancing services across the board.”

About KIS Technologies, LLC

KIS Technologies, LLC, a wholly owned subsidiary of Weldon, Williams and Lick, Inc., is a live event technology company offering smart, secure, simple hardware and software solutions to the ticketing and parking markets. Clients include Museum of Fine Arts Houston, Frost Museum, Crystal Bridges Museum, and Home of the Arts Australia. The company’s product lines feature easy-to-use KIS Ticket for simple ticketing applications, KIS Kiosk for self-serve ticketing integrated with major ticketing systems, and KIS Park parking management software.


About Payfactory

Payfactory is a tech-enabled payment facilitator for software platforms. Formed by payments industry veterans and created for and by developers, Payfactory enables software vendors to effortlessly integrate complex payment acceptance, deposit funding and new account onboarding features into their platform while minimizing risk. Payfactory serves enterprise software companies seeking a higher level of security, service and speed.



This release was issued through Send2Press®, a unit of Neotrope®. For more information, visit Send2Press Newswire at 

SOURCE KIS Technologies, LLC

Just the FACs: Secure Your Business with PayFac 2.0

May 31, 2023 at 9:52am

This series, “Just the FACs,” tracks the development and progression of ISVs and PayFacs. Part 1 charted PayFac’s evolution from “fast onboarding for ISOs” to more nuanced, vertically focused, customizable solutions. In Part 2, experts examine innovative new approaches to protecting and enhancing the customer and partner experience by making security the cornerstone of PayFac solutions.

At the recently concluded TRANSACT, security analysts who participated foresee PayFac’s potential to promote secure commerce while maintaining user-friendly interfaces. Each explained how PayFacs leverage advanced technologies locally and in the cloud to maintain compliance and bolster security.

Cloud, AI, Automation Trifecta
Troy Leach, Chief Strategy Officer at the Cloud Security Alliance, cited SaaS-based offerings, automation, and AI as notable trends that simplify and strengthen compliance.

“The world of payments is moving much quicker today than just a few years ago,” he said. “Exciting to see what is ahead for the industry as it quickly evolves and leverages these giant steps in technology.”

Leach has also seen greater use of artificial intelligence to offer smarter and more customized solutions that build security and compliance into solution design. This includes a growing number of business use cases for ChatGPT and Google’s Bard, he said, that demonstrate the potential of AI to simplify our lives and identify more practical, efficient approaches to security.

By leveraging cloud computing, companies can confidently create secure profiles, Leach noted, and once they create a secure profile, they can deploy it a thousand times, knowing it will remain consistent and secure. That’s the beauty of scaling as a PayFac-as-a-Service, he added, because you save time onboarding new clients while replicating the same compliant configuration every time without having any concerns about your system’s capacity.

“Payment Facilitators are learning quickly how to enable the many benefits of dynamic security that comes with ‘as-a-service’ cloud computing,” he said. “Traditional banking and legacy technology often would require more manual involvement and cost to make security changes.”

Leach cautioned ISVs and PayFacs that outsourcing services doesn’t mean shifting responsibility for compliance to third parties. A Shared Security Responsibility Model (SSRM), with assigned roles and responsibilities, will hold both company and service provider accountable, he stated, and it’s equally important for both parties to demonstrate security and compliance on demand, whenever requested.

“PayFacs must be very aware of the responsibility they have for their merchants and also the increased scrutiny from regulators all over the world to assure they are also accountable for the protection of customer data,” he said. “The good news is many cloud service providers (CSP) partners that offer software or platforms are becoming very knowledgeable in financial service compliance and are hiring security experts from the financial service industry to lead groups dedicated to solving regulatory issues to which their customers must adhere.”

Defense in Depth
Brent Johnson, CISO at Bluefin, advised companies to work with PayFac partners and cloud service providers to protect data when embedding payments into applications and moving services to the cloud. Where appropriate, consider a Defense in Depth approach, he added, that uses multiple measures to protect an organization’s assets.

“Items such as web application firewalls, stateful firewalls, endpoint protection services like Crowdstrike, Intrusion Detection and Prevention, multifactor authenticated access, encryption, and tokenization [are needed],” he said. “Also, consider a zero-trust security framework by requiring all users to be authenticated, authorized, and continuously validated before a user is granted access. Since over 80 percent of attacks involve credential misuse, this approach brings greater integrity to the systems.”

Johnson explained that employee training is also critical to protect against phishing, spear-phishing, smishing, and other schemes designed to get employees to take actions that compromise their connected devices. Once compromised, these devices enable attackers to gain control of a company’s network and data.

Leverage PayFac Expertise
PayFacs can help companies implement comprehensive cybersecurity strategies that Johnson said can monitor assets and provide real-time analysis and alerting. In addition, properly tuned endpoint protection systems can alert, contain, and mitigate anomalous behavior.

Emphasizing the need to implement vendor software updates that patch vulnerabilities as they arise, Johnson said PayFac partners can help enterprises keep systems patched to reduce their exploit surfaces. In addition, he noted that encrypting and tokenizing cardholder data and PII data will devalue the data in the event of a breach.

“Companies should make encrypted backups of data daily and ensure a copy of this encrypted data is stored offsite,” Johnson said. “Encrypting data and keeping a daily copy of that data offsite provides the opportunity to rebuild and recover from a ransomware attack.”

Simplify Security Compliance
Johnson acknowledged that compliance can be challenging and offered the following advice:

  • Build a solid security infrastructure: Programs built on a foundation of industry best practices require less drastic modifications as standards mature and evolve. However, these programs require dedicated workers, periodic in-house assessments, and regular third-party audits.
  • Get management buy-in: Programs supported by senior management, with appropriate investment and resources, have greater potential for success.
  • Stay actively involved: Programs that engage stakeholders through conferences, calls, and discussions on new standards will help employees and third-party providers maintain compliance and security best practices.

Build Security-First Partnerships
Sully Perella, Senior Manager at Schellman, observed that PayFac partners can help enterprise-level clients and small and nano merchant channels achieve security compliance.

“The good side of this scenario is that most infrastructures support the necessary segmentation to keep individual clients apart and the scalability that enables them to meet demand for larger clients as they grow,” he said. “The difficult side of this is management from both an access control and logging in perspective.”

Perella said that in the former scenario, PayFac partners must carefully architect their solutions with credential management that does not allow one-to-many attacks, in which one compromise leads to multiple entities being compromised.

In the latter scenario, when designing access control and permission levels, Perella noted that a PayFac partner must either provide monitoring capabilities as part of their offering or enable the client to perform these actions independently.

When reflecting on common misconceptions about security and compliance among ISVs, merchants, and service providers, Perella recommended that all parties perform due diligence to align their interests and objectives.

“Before engaging with a partner, organizations need to be thorough to align the services sought with the language of the contract,” he said, adding that security and compliance are dynamic and what is considered both secure and compliant today may not be in six months.

“Organizations must remain diligent in maintaining their environments,” he said. “From social engineering attacks to zero-day attacks, our community needs to communicate clearly between ISVs, merchants, and service providers to inform each other of vulnerabilities and exploits and the questions surrounding new technologies and offerings. The shiny new thing may make transactions easier but does not necessarily dissipate risk.”

Dale S. Laszig is a payments industry journalist and guest columnist for Payfactory. Previous to her writing career, she managed business development for leading payments acquirers and POS manufacturers. Connect with her at [email protected]LinkedIn and Twitter.

Just the FACs: Scale Your Business with PayFac 2.0

March 22, 2023 at 12:44pm

Trends come and go in the payments industry. Payment facilitation followed a predictable trajectory, from the gold rush fever of early implementations to mass disillusionment as major players grabbed market share. In their wake, merchant acquirers, ISOs and agents were left with micro and nano merchants, ever careful to stay under that million-dollar processing threshold to comply with card brand rules. The story might have ended there, but for the sheer determination and ingenuity of payments architects and designers who blazed a different trail.

This series, “Just the FACs,” follows the transformative journey from early-stage payment facilitation to modern PayFac offerings that are shaping the future of digital commerce. Along the way, we’ll share insights from leading merchant acquirers, ISOs, independent software vendors (ISVs) and service providers who are enhancing the customer experience and opening new revenue-sharing opportunities. We will also explore how principled design creates agile, secure and highly intuitive solutions.

PayFac Evolution
PayFac has evolved from passive plug-ins to flexible technologies that enterprises can bend and shape at will. Early off-the-shelf iterations might have worked for marketplace sellers but had little to offer ISVs that customize apps for specialized markets and prefer revenue sharing to sunk costs and relationship managers to FAQs and live chat.

Ruston Miles, Payfactory founder and CEO, and ETA Payment Facilitator Committee member, observed that modern approaches to payment facilitation represent a paradigm shift from earlier iterations, which he characterized as “fast onboarding for ISOs.”

“During the PayFac 1.0 land grab, ISOs were aggregating merchants they didn’t know too well, which led to sizable merchant fraud and losses,” he said. “Generic ‘PayFac for the masses’ had a lot of risks but new embedded models allow ISOs, agents, and ISVs to know their merchants and reduce overall risk of merchant fraud. Less loss results in more margin to share.”

True Embeddedness
Describing embedded payments as a hallmark of PayFac 2.0, Miles noted software developers appreciate the difference between integrated and truly embedded payments.

“I see PayFac 2.0 as embedded payments, and that means truly embedded, not just integrated,” he said. “Unlike integrated models that rely on merchant providers, software providers and payment gateways all working loosely together, PayFac 2.0 embeds payments directly inside software, from front-end signup to the merchant’s own reporting.”

PayFac 2.0 is an elegant experience, Miles noted, that allows service providers to know their merchants better and derive the following key benefits:

Know your merchant: By fully embedding payments within verticalized software, PayFac 2.0 optimizes the merchant experience for each business, whether salon, insurance agency or school district, while allowing service providers to identify and understand who their merchants are and how they process.

Increase agility, lower risk: By leveraging advanced AI and machine learning (ML) to manage risk, PayFac 2.0 accelerates enrollments with agile, intelligent credit decisioning and customer onboarding.

Expand choice, reduce cost: By offering a range of service options, from full-service to PayFac-as-a-Service, PayFac 2.0 enables software brands to customize and control the PayFac experience without having to invest in building PayFac infrastructure.

Gain control, capture revenue: By building PayFac 2.0 directly into their applications, software brands and their participating ISO, acquirer and agent partners can capture high revenue share while controlling the user experience, from front-end onboarding to embedded payment acceptance and reporting.

Choose your gateway, processor: By facilitating open, interoperable service models, PayFac 2.0 can be both processor and gateway agnostic. To ensure high security and performance levels, providers may make their own recommendations but can also honor existing gateway and processor relationships.

PayFac as a Force Multiplier
With the PayFac 1.0 gold rush behind us, the next big thing for ISOs, agents and ISVs may be hiding in plain sight. Like any mass migration, PayFac 1.0 produced winners and losers but the story doesn’t have to end with “winner takes all.”

There’s no doubt payments and retail industries have democratized technology and made a big brand experience accessible to small and midsize merchants, but big business will continue to have requirements that can’t be watered down. Growth remains top of mind among all enterprises, and PayFac 2.0 is designed to help them scale at the speed of software.

During ETA’s State of Payments, held virtually on January 25, 2023, the ETA’s Payment Facilitator Committee predicted more PayFac growth in 2023, advising ETA members that regional banks and credit unions are becoming more active in the space. The committee continuously updates ETA Payment Facilitator Guidelines and Payment Facilitators Common Usage Guide to stay current with ecommerce, privacy, compliance, marketing practices and graduation of submerchants, in the post-COVID era, committee members noted.

It’s time to celebrate the payments industry’s collective journey from PayFac 1.0 to PayFac 2.0, next-generation embedded solutions that facilitate payments, seamless customer experiences and profitable business relationships. Next up in this series, we’ll explore how to build security into the digital customer experience.

Dale S. Laszig is a payments industry journalist and guest columnist for Payfactory. Previous to her writing career, she managed business development for leading payments acquirers and POS manufacturers. Connect with her at [email protected]LinkedIn and Twitter.

The Electronic Transactions Association (ETA) is the global trade association representing more than 500 payments and technology companies. ETA members make commerce possible by processing more than $6 trillion in purchases in the US and deploying payments innovations to merchants and consumers. Learn more: