A payment service provider gives the merchant access to various methods to accept payments. Merchants can accept payment through direct debit, bank transfer, real-time bank transfers using online/net banking and credit cards. A payment service provider can be connected to various banks and payment and cards networks.
By using payment service providers, merchants do not have to worry to manage their transactions or depend on multiple financial institutions. While taking services of a PSP, you do not have to pay any extra fees for the security of transactions. All the transactions take place in a safe space. Payment service providers are also known as merchant service providers.
BENEFITS OF USING A PAYMENT SERVICE PROVIDER
- Accept multiple payment methods- payment service providers integrate several payment methods through a single channel. Your customers can choose payment methods at their convenience.
- Make transactions securely- All the information that is disseminated in a transaction is highly encrypted which ensures the customers that their data won’t be misused.
- Accept multiple currencies- PSPs support payment from all across the world and accept payments in multiple currencies. So, if you are planning to expand your business worldwide then a PSP is a must.
- Get monthly reports- PSPs give you a monthly report of all the transactions and the payments received. You do not have to maintain records. It is easier and hassle-free. You can also reconcile the transactions.
- Add new payment methods- Nowadays, many payment methods come up every new day. PSPs automatically update the new methods and never disappoint your customers and take care of their convenience.
- Opening accounts with banks- If you do not have an account with acquiring banks, then PSPs help ease the application process. They also help in getting sub-accounts under pre-existing accounts.
TYPES OF PAYMENT PROVIDERS
- The processor or payment gateway- Merchants use a payment gateway to process card payments both debit and credit. By using a payment gateway, you can accept payments 24/7.
- Payment collector- PSPs can also work as collectors. They collect payments from various methods and institutions before passing them to a trader.
- Aggregator- Aggregator is responsible for technical connection and settlement of payments. It also takes care of the contractual negotiations with financial institutions.
- Acquirers- Acquirers are responsible for acceptance, authorization, and billing. Acquirers also ensure that merchants comply with PCI DSS and work over fraud management.