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Payment Service Provider
Business Finance (FIN201)
East West University
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Payment Service Provider (PSP) and Payment System Operator (PSO)
Payment Service Provider (PSP) : A payment service provider offers shops online services for accepting electronic payments by a variety of payment methods including credit card, bank- based payments such as direct debit, bank transfer, and real-time bank transfer based on online banking.”
Basically, it is a third party that allows merchants to accept a wide variety of payments through a single channel. The PSP works with acquiring banks (payment processors) to manage the entire transaction process from start to finish. This means that the PSP is responsible from the moment a customer inputs their credit card details, to the moment the funds appear in the merchant’s bank account.
When a customer submits credit card details online, the PSP carries out a process known as ‘authorization’, on behalf of the merchant. Here are the steps the transaction takes during the seconds between when a customer presses “confirm order” and receives the order confirmation on his screen:
The transaction details are sent to the acquiring bank’s processor. The information is submitted to the credit card network. Popular credit card networks include MasterCard and Visa. The network then sends the transaction details to the issuing bank – this is the bank that issued the card to the customer. The issuing bank decides whether to approve or decline the transaction. It passes its decision back to the credit card network, which passes this result onto the acquiring bank’s processor again. The processor then communicates these details to the PSP. The PSP will then share the results with the customer and merchant.
Using a PSP makes it much easier for a merchant to accept and manage many different payment types. A good PSP will also offer merchants unparalleled security services and convenient multi-currency functionality.
Payment System Operator (PSO):
Payment systems are managed by payment system operators and underpin the delivery of payment services. They are effectively a set of rules that govern transfer of funds between PSPs. A further critical element of payment systems is the provision of infrastructure - essentially the various hardware, software, secure telecommunications network and operating environments that are used to manage and operate payment systems.
This infrastructure supports the clearing and/or settlement of a payment or funds transfer request after it has been initiated. It is PSPs that offer payment services to individuals, businesses and other organizations including government - which is the largest user of payment systems by volume of transactions. Types of PSPs include credit institutions (banks, building societies and credit unions), electronic money and payments institutions.
Regulate the operators of these payment systems along with their infrastructure providers and the payment service providers (PSPs) that make up these systems.
Interbank payment systems - developed to enable payments to be made between people using their accounts with PSPs (eg, their bank accounts). Card payment systems - enable people to make payments using debit and credit cards. We regulate MasterCard and Visa Europe.
Payment Service Provider
Course: Business Finance (FIN201)
University: East West University
Students also viewed
- Annual report 2006 - Assignment
- Termpaper-171129060847
- Report pari - This work begun as a part of a course (Financial Accounting) of Master’s program
- NIBS Business Plan Competition Sample 3
- Enchap 4 - This work begun as a part of a course (Financial Accounting) of Master’s program
- Enchap 2 - This work begun as a part of a course (Financial Accounting) of Master’s program
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- Software Documentation and Code Validation MIS Assignment
- Internship Report - At the beginning I would like to convey my sincere appreciation to the Almighty