What is a Payment Service Provider (PSP)?
PSP stands for a payment service provider. This is a third-party company that helps various businesses accept online payments in all possible ways, including credit and debit cards, prepaid cards, online wallets, online banking, and more. In essence, the main task of payment network providers is to make sure that transactions are sent from the buyer to the seller quickly, reliably, and securely.
PSPs track payment progress from the very beginning (when the customer initiates a transaction and enters their payment details) to the completion of the payment (when the money is in the merchant's account).
Online service providers work with acquiring banks to enable merchants to accept payments. PSPs also often offer additional services, including anti-fraud systems, compliance with modern requirements for payment security, translation of the payment interface into other languages, and acceptance of international payments.
It is also important to understand the difference between a payment service provider and a merchant account. In the case of a regular merchant account, each merchant gets their own account, while payment PSPs group different merchants under one umbrella and take on the financial risks associated with these companies.