Payment service provider

Source: Wikipedia, the free encyclopedia.

A payment service provider (PSP) is a third-party company that allows businesses to accept electronic payments, such as

retailers.[1]

They will often provide

currency exchange and fraud protection. The PSP will typically provide software to integrate with e-commerce websites or point of sale systems.[2]

Operation

PSPs establish technical connections with

banking institutions.[3]

PSP can also offer

payment systems) including cash payments, wallets, prepaid cards or vouchers, and even paper or e-check processing.[citation needed
]

PSP fees are typically charged in one of two ways: as a percentage of each transaction, or as a fixed cost per transaction. [citation needed]

US-based

FinCEN), a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat money laundering, terrorist financiers, and other financial crimes. [citation needed
]

European payment service providers are supervised based on the European Payment Services Directive.[4]

Security

Each merchant remains responsible for his own actions and must accordingly ensure that the selected provider observes the guidelines, e.g. with regard to

PCI DSS
guidelines is important. There are four levels of PCI compliance, that must be respected by the PSP. Depending on the volume of transactions as well as other details about the level of risk assessed by payment brands, the payment service provider has to follow higher standards.

The levels are as follows:

  • Level 1 – Over 6 million transactions annually;
  • Level 2 – Between 1 and 6 million transactions annually;
  • Level 3 – Between 20,000 and 1 million transactions annually;
  • Level 4 – Less than 20,000 transactions annually.[5]

Market size

As of 2022, there were more than 900 payment providers in the world. More than 300 offer services just for Europe [6] and North America. The global payment service provider market is expected to reach $US88 billion by 2027 from $US40 billion in 2019.[7]

Main article: List of online payment service providers

Regulatory history

China

In 2010, the People's Bank of China issued administrative measures regarding online non-financial payment services.[8]: 33  These measures retroactively recognized the legal status of online third-party payment platforms like Alipay.[8]: 33  Prior to the 2010 measures, these services existed in a legal grey area.[8]: 32 

See also

References

  1. ^ "What is a payment service provider?". www.dnb.nl. Retrieved 2022-09-26.
  2. ^ "What Is A Payment Service Provider (PSP)?". Forbes. August 25, 2022.
  3. ^ "What is a PSP or Payment Service Provider? | Definition & Benefits - Zoho Books". Essential Business Guides. 2019-01-24. Retrieved 2022-09-26.
  4. ^ "European Commission Payment Services".
  5. ^ "PCI Compliance Guide Frequently Asked Questions | PCI DSS FAQs".
  6. ^ "European Payments Council Member List".
  7. ^ "Payment Service Provider Market: Share, Market Size, Growth By Top Company, Region, Applications, Drivers, Trends and Forecast: 2022-2031". MarketWatch. Retrieved 2022-09-26.
  8. ^
    ISBN 9780197682258
    .
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