Payment service provider

A payment service provider (PSP) is a third-party corporation that helps companies accept a broad variety of online payment methods. These methods include online banking, credit cards, debit cards, e-wallets, cash cards, and many more. PSPs help businesses accept these payment methods. They watch over the transactions of customers to make sure they are carried out in a risk-free and protected manner from point A to point B.

A payment service provider (PSP) may often establish connections with numerous acquiring banks, card networks, and payment networks. The Payment Service Provider (PSP) will often completely handle these technological connections, interactions with the external network, and bank accounts. As a result, the PSP is responsible for the technical processing of payment methods for online retailers. Because of this, the merchant is less reliant on financial institutions and is relieved of the responsibility of creating these relationships directly, which is particularly helpful when the merchant is doing business on an international scale. They are able to often provide lower rates since they negotiate bulk transactions.

In addition, a full-service PSP is able to provide multi-currency capabilities and services, as well as risk management services for card and bank-based payments, transaction payment matching, reporting, money remittance, and fraud prevention. Some payment service providers (PSPs) provide processing services for additional next-generation methods (payment systems), such as processing cash payments, wallets, prepaid cards or vouchers, and even processing paper checks or electronic checks.

Therefore, a payment service provider (PSP) is a word that covers a considerably wider scope than what the payment card industry refers to as a payment gateway.

Fees for payment service providers (PSPs) are normally assessed in one of two ways: either as a percentage of the total cost of each transaction or as a flat rate.

The Financial Crimes Enforcement Network, also known as FinCEN, is a bureau of the United States Department of the Treasury that collects and analyses information about financial transactions in order to combat financial fraud, terrorist funders, and other bank fraud. This network is responsible for supervising online payment service providers that are based in the United States.

The European Payment Services Directive serves as the basis for the oversight of payment service providers located in Europe.