Overview#Payment Service Provider (PSP) typically connect to multiple acquiring Bank, Card Processors, and Payment Network.
Payment Service Providers in many cases, the Payment Service Provider will fully manage these technical connections, relationships with the external network, and Transaction Accounts. This makes the merchant less dependent on Financial Institutions and free from the task of establishing these connections directly, especially when operating internationally.payment methods including payment Cards, bank-based Payment Transactions such as direct debit, bank transfer, and real-time bank transfer based on online banking.
- an authorised payment institution;
- a small payment institution;
- a registered Account Information Service Provider;
- an EEA authorised payment institution;
- a credit institution;
- an electronic money issuer;
- the Post Office Limited;
- the Bank of England, the European Central Bank and the national central banks of EEA States other than the United Kingdom, other than when acting in their capacity as a monetary authority or carrying out other functions of a public nature; and
- government departments and local authorities, other than when carrying out functions of a public nature.
Payment Services Directive defines of two new Payment Service Provider models:
Payment Service Provider maybe different as the European Union States may have different definitions.Software as a Service model and form a single payment gateway for their clients (merchants) to multiple payment methods.
Typically, a Payment Service Provider can connect to multiple acquiring Bank, Card Processors, and Payment Network. In many cases, the Payment Service Provider will fully manage these technical connections, relationships with the external network, and bank accounts. This makes the merchant less dependent on Financial Institutions and free from the task of establishing these connections directly, especially when operating internationally. Furthermore, by negotiating bulk deals they can often offer cheaper fees.
Furthermore, a full-service Payment Service Provider can offer Risk Management services for payment Cards and bank based payments, Payment Transaction matching, reporting, fund remittance and fraud protection in addition to multi-currency functionality and services. Some PSPs provide services to process other next generation methods (payment systems) including cash payments, wallets, prepaid cards or vouchers, and even paper or e-check processing.
Payment Service Provider fees are typically levied in one of two ways: as a percentage of each transaction or a fixed cost per transaction.
US-based on-line Payment Service Providers are supervised by the Financial Crimes Enforcement Network (or FinCEN), a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to implement Anti-Money Laundering, terrorist financiers, and other financial crimes.
There are more than 900 Payment Service Provider in the world. More than 300 offer services for Europe and North-America.