A Payment Service Provider (PSP) is a company that enables merchants to accept electronic payments from their customers. PSPs typically provide a range of payment methods, such as credit cards, debit cards, e-wallets, and bank transfers, and they handle the technical and financial aspects of the transaction.
PSPs act as intermediaries between the merchant and the acquiring bank, which is the financial institution that processes the payment. They provide a secure payment gateway that encrypts the customer's payment data and sends it to the acquiring bank for authorization.
PSPs also handle other aspects of payment processing, such as fraud detection and prevention, chargeback management, and reconciliation of transactions. They may offer additional services, such as recurring billing, multi-currency processing, and mobile payment solutions.
Examples of PSPs include PayPal, Stripe, Adyen, and Square.