Payment service providers' catalogue

• Consumer. Any online credit and debit card payment begins with a consumer who visits the merchant's page, selects the product of interest, and enters their card details on a checkout page to make a purchase. Thus, a consumer acts as point A and point B of each transaction because they initiate the payment and are then notified of its result.
• Merchant. The term "merchant" is mainly associated with e-commerce sellers of goods and services. The main merchant’s task is to provide their customers with a convenient payment ecosystem and various online payment methods, including debit cards, credit card transactions, bank transfers, digital wallets, online banking transactions, mobile wallets, and other types of payment. To do this, they just need to start cooperating with a payment processor that will enable them to accept online payments.
• Issuing bank. An issuing bank or issuer is responsible for payment processing on behalf of a consumer. This financial institution is authorised by a card brand network (Visa, Mastercard, Discover) to provide consumers with debit cards and credit cards. In payment processing, the issuer receives a card authorisation request from the card network, checks the state of the cardholder’s bank account and approves the transaction if there are enough funds to withdraw.
• Acquiring bank. An acquiring bank is a financial institution where business owners open their merchant accounts. In return, acquirers provide them with hardware/software for payment acceptance and processing. Having licenses for the provision of financial services, acquirers are fully responsible for all merchants’ transactions. That’s why they conduct a constant comprehensive check of all incoming funds.
• Card Network. Card brand networks (Visa, Mastercard, Discover) set the rules for all parties involved in payment processing. They run the whole payment system, empowering banks and other financial institutions to issue cards under their brand and giving acquiring banks the right to conduct financial transactions.
• Payment processor. A payment processor facilitates communication between all parties involved in a transaction. This is a must for every e-commerce merchant who is looking for ways to deliver their products worldwide. The payment processor facilitates financial transactions, providing merchants with all the necessary payment solutions and different payment methods for successful sales.
• Payment gateway. A payment gateway plays a role of a point-of-sale terminal for electronic payments. It creates a connection between a seller’s website and payment processor, securely encrypting debit/credit card data and moving them for further processing. Essentially, a payment gateway facilitates a seamless and highly protected flow of online transactions.

A payment service provider (abbreviated as PSP) is a third-party company offering businesses complex solutions for accepting, managing, processing and archiving online transactions. A connection of several payment methods via an online payment service provider allows merchants to deliver their goods and services to customers anywhere in the world, making their brand recognisable.

Besides the ability to accept debit/credit card payments, business owners can benefit from additional merchant services offered by payment service providers, such as invoicing, multicurrency support, real-time currency conversion, and risk management. Thus, partnering with a payment service provider gives them access to a wide range of merchant services and offers them more ways to get paid.

• A transaction starts with a buyer who fills in their credit card details on the merchant’s checkout page. After this, these details are sent to the acquiring bank.
• The acquiring bank engages a processor which sends encrypted transaction details to the card network through a payment gateway.
• Card network contacts the customer’s issuing bank and the last checks if there are enough funds on the customer’s bank account for withdrawal.
• The issuer approves or rejects the payment, sending the result back to the processor which in turn redirects the info to the gateway.
• The gateway notifies the buyer of a successful (or not) transaction.

Acquirer and PSP are two different things. First of all, they differ in how they open and hold merchant accounts. While acquiring banks open individual bank accounts for each seller, merchant service providers register each merchant under its own account. This is done to allow the merchant to accept transactions as soon as possible, without waiting for the acquirer to open an account for them. After concluding a contract with a payment service provider, you’ll be given a processor, gateway and other necessary tools to accept debit/credit cards issued by card brand networks and new payment methods your business needs. Plus, a payment service providers offer a much broader range of services than acquiring banks, including risk management, multi-currency support and enhanced fraud protection.

• Improved fraud prevention. Payment service providers know how important the security of online payments is and offer advanced anti-fraud tools such as encryption, tokenisation and others. Therefore, when choosing a PSP, we strongly recommend checking its compliance with PCI DSS (Payment Card Industry Data Security Standard). PCI compliance is a must to work with card transactions.
• Turnkey payment platform. Partnering with a PSP, you’ll get a user-friendly platform for comprehensive management of the payment ecosystem. You’ll also be able to customise your checkout page and track all transactions through a single interface.
• Multiple currencies support. Accepting multiple currencies is crucial for businesses that aim to attract customers from different countries. Advanced payment service providers work with multiple currencies and provide additional useful services such as real-time currency conversion.
• Pricing. Third-party processing is often less expensive than an acquiring bank’s operational fees. Depending on the services provided, PSPs offer flexible pricing plans for various business types. Most commonly, they charge per transaction.

• Merchant account type. Some businesses find it more reliable to open their own merchant account in a bank instead of using the one provided by PSP. In the case of a payment service provider, the transactions of all connected merchants go through one account, which can be blocked in case of suspicious activity.
• Fees. Despite the convenience of using the service provider, some fees can be unpredictable and higher than expected—for example, cancellation fees and currency conversion rates. Sometimes there’s also a fixed fee for the services provided and per transaction fee.

If you’re looking for a flexible and secure payment processing solution, try Corefy, a universal payment orchestration platform allowing you to connect as many methods as you need to keep your business thriving. Book a demo to explore our product.