As technology has evolved, there are more and more ways to make payments. For businesses, this is hugely beneficial but does make things more complex as there are multiple technologies to get to grips with. Payment service providers (PSP) are a crucial aspect of the modern business world, as they bridge the gap between today’s businesses and the wide range of payment options available. Therefore, providing customers with a more efficient and hassle-free payment experience.
But what is a PSP? In this post, we’ll discuss payment service providers in greater detail and provide a detailed yet straightforward guide to offer all the information you need.
What is a PSP?
A payment service provider or ‘PSP’ is a third-party specialist that helps merchants to accept payments. They provide a range of financial services to ensure that companies can accept debit/credit card payments, as well as bank-based payments such as direct debits and bank transfers. A PSP is a vital asset for ensuring that your business can receive a range of payments, as they provide you with a merchant’s account and payment gateway. Both of which are required to receive the payments mentioned in this post.
Working with a payment service provider makes the entire process more efficient and avoids complications, and allows you to reach a broader range of customers and profit more.
A PSP connects your business to a broader financial world, which is vital for being as up-to-date as possible and staying with the times with both finance and technology. The ability to future-proof your business in regards to receiving payments is a huge advantage, an advantage you gain with a payment service provider.
What is a PSP’s process?
Put as simply as possible; payment service providers manage the entire transaction process by working with acquiring banks. Their services are vital within the modern business world, where a large number of customers opt for card payments over cash, especially since Covid-19, where the use of cash has decreased significantly. The following will give you a step-by-step guide to what a PSP does.
- Step one: Your customer initiates the transaction using a debit/credit card or another form of payment, and the details are sent to the acquiring bank.
- Step two: The transaction information is sent to the credit card network who then passes the information onto the customer’s issuing bank — the bank that issued them with their card.
- Step three: From here, the issuing bank approves or denies the transaction (depending on if there are sufficient funds in the account) and relays their decision to the credit card network, which then relays the information to the acquiring bank.
- Step four: The decision to accept or deny the transaction is passed onto your payment service provider, who will share the information with you (the merchant) and your customer.
- Step five: Once payment has been approved, the issuing bank releases the funds to the credit card network, which passes it onto the acquiring bank before giving it to the PSP merchant account.
What are the benefits of working with a PSP?
For merchants, the value of working with a PSP is clear from how the transaction process works. Payment service providers take care of every aspect of the transaction, from start to finish. Meaning that merchants neither have to worry about it or invest the time into handling the process themselves. ‘What is a PSP?’ is likely such a common question because few are aware of how complex such a simple process can be and why PSPs provide such an invaluable service to modern businesses.
Also, PSP payments can come through a range of channels and payment methods. Working with a PSP allows you to accept a vast array of payment methods, which massively increases your business’s ability to work with a larger, broader customer base. And not have to turn away customers because you cannot accept their payment method. Simply put, a PSP makes the payment process more efficient, hassle-free and helps to boost sales. Sounds pretty good, right?
Do PSPs offer other services?
Due to customer transactions being the most common service required for businesses, you may assume that this is the only purpose of a payment service provider. However, a payment service provider such as RSM2000 offers a range of services designed to suit the varying needs of many different sectors, from the smallest business to the largest organisation. Examples of these services include:
- Bacs Payments
- Point of Sale Card Acceptance
- Online and ‘MOTO’ Payments
- Event Payments
- Contactless Payments
- Text and Mobile Payments
As you can see, payment service providers offer modern businesses a range of crucial products designed to increase financial efficiency while allowing them to implement the necessary services to maximise profitability and growth. Whether you’re an eCommerce store in need of better payment solutions, an event organiser who needs readily available onsite payments, or any other business owner requiring the services we provide — look no further than RSM2000.
Are you a business owner in need of a more efficient and organised way to accept payments? Then you need a reputable payment service provider! RSM2000 is a leading PSP, offering a range of products to suit the many needs of your business — from everyday transactions to complex financial processes. Get in touch today to discuss your requirements and find out how our team of experts can help!