Understanding Payment Service Providers (PSPs)

A Payment Service Provider, commonly known as a PSP, stands as a versatile alternative to the traditional merchant account and payment gateway setup. Unlike the latter, a PSP offers a comprehensive service that includes both technical payment processing and fund collection. This all-encompassing approach extends to managing contracts with banks and card acquirers, as well as overseeing the settlement of collected funds.

In essence, payment service providers collaborate with acquiring banks (payment processors) to handle the entire transaction process. Here’s a brief breakdown of how the transaction unfolds:

Customer initiates payment.

Transaction details are sent to the acquiring bank.

Information is transmitted to the credit card network, which forwards it to the issuing bank.

The issuing bank decides whether to approve the transaction and communicates the decision back to the credit card network.

The credit card network relays the decision to the acquiring bank, which, in turn, informs the payment service provider.

Once authorised, the issuing bank transfers funds through the credit card network to the acquiring bank for deposit into the PSP’s merchant account.

Single Contractual Relationship: Establishing a relationship with a PSP grants access to various banks and payment methods through a single contractual agreement.

Fraud Prevention: PSPs often come equipped with their own fraud prevention resources and are compatible with third-party anti-fraud services.

Flexible Addition of Payment Methods: Adaptable to changing business needs, PSPs allow for easy integration of new payment methods as technology evolves.

PCI Compliance: Reputable PSPs handle PCI certification, saving costs for merchants and ensuring compliance.

One common question revolves around the distinction between Payment Service Providers and standalone Payment Gateways. Unlike payment gateways, PSPs manage contracts with banks and acquirers directly, providing a comprehensive service that encompasses payment processing and fund collection.

Merchant Advice Service (MAS) collaborates not only with UK-based Payment Services Providers but also has access to international solutions, catering to businesses across Europe, China, and Australia. Our experts can guide you on accepting multi-currency transactions through international Payment Services Providers.

MAS advisors are ready to assist you in finding the ideal Payment Services Provider for your business now and in the future. Discuss your requirements with us today, as we provide intermediary-based access to Payment Services Providers.

Merchant Advice Service collaborates with industry experts to provide tailored advice for merchants seeking the right PSP. Whether you are looking for national, international, high-risk, or third-party PSP solutions, our advisors can guide you through the process.

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