Then, the decision is passed back to the payment service provider, which shares the result with the customer and the merchant.Īfter payment has been authorised, the issuing bank will send the funds to the credit card network, which passes them back to the acquiring bank to be deposited in the PSP’s merchant account Then, the information is sent to the credit card network, which then sends the transaction details to the issuing bank (bank that issues the card to the customer).Īfter deciding whether or not to approve the transaction, the issuing bank passes the decision back to the credit card network, which passes it back to the acquiring bank. Here’s how the transaction process works in a little more detail:įirst, the customer initiates payment and transaction details will be sent to the acquitting bank. In short, payment service providers work with acquiring banks (payment processors) to manage the entire transaction from start to finish. They provide both a merchant account and a payment gateway, ensuring that businesses can collect and manage their payments in a simple and efficient way. Simply put, payment service providers enable merchants to accept credit/debit payments (as well as Direct Debit, bank transfer, real-time bank transfer, etc.) by connecting them to the broader financial world. Payment service providers – also known as merchant service providers or PSPs – are third parties that help merchants accept payments. But what is a PSP? Find out everything you need to know with our definitive guide.
Payment service providers are an important part of the payment ecosystem, and for any business that wants to deliver a simple payment experience to their customers, it’s something that you should get to know in more detail. Payments can be complicated, but if you want to accept debit or credit card payments at your business, you’re going to need to understand the terminology behind them.