What is a PSP?
A payment service provider (PSP) is a company that facilitates the technical connection between an online business and other market players such as banks or credit card acquirers. This allows the cost of integrating and processing different payment methods to be significantly reduced. In addition, online retailers can benefit from services such as risk management and be relieved from the security requirements of credit card companies.
To be successful in online business it is essential to ensure that payments are processed smoothly. This will reduce crashes while increasing the conversion rate.
In other words, through the use of a PSP an online retailer will benefit from the following:
- Simpler/additional payment methods = more orders = more sales
- Reduction in integration and handling costs
- Risk reduction for the online retailer in terms of security and revenue loss through the implementation of address and credit checks; Payment processing and the transfer of outstanding debts to the collection are possible only through an interface
A decisive advantage of the integration of a PSP is PCI compliance. All companies that process, store or transmit credit card data must be certified according to this standard. Using a payment service provider, the payment process can be designed in a manner that the merchant does not store data on its systems. The advantage is that only the payment service provider has to go through the certification process.
Disadvantages (if you can name it like this)
The online retailer must have confidence in the PSP as they are being wholly relied on for their payment processing.
There are fees and costs of integration, and the integration of legal indications that customer information is stored by a third party, which eventually can lead to a loss of confidence among buyers.
Online retailers are faced with the decision to balance the customers’ consent for the offered payment procedures, integration and settlement costs against the risk of payment delays and payments defaulting.
A professional partner for online retailers in the form of a payment service provider, such as PAYMILL, is worth a lot of money in the truest sense of the word.
Another great advantage of our API is that we do not offer all possible payment methods as standard, but can respond to the needs of our customers and thus provide only payment methods to choose from that really make sense in the context of the target group, or the assortment and add value.
Please click here for further information including the advantages of our various APIs that can be easily integrated into any conventional shop system, as well as every imaginable programming language also.