Payment Service Provider (PSP)

What is a payment service provider?

A payment service provider (PSP) is a company that helps businesses accept digital payments, including credit cards, debit cards, and electronic transfers. They’re an all-in-one solution that handles everything from transaction authorization to fund settlement. A PSP eliminates the need to set up direct, time-consuming, and expensive agreements with banks or card networks. You can focus on your business without the headaches of negotiating, underwriting, and ongoing maintenance. Popular PSPs provide secure payment processing, fraud prevention, and compliance management so businesses can focus on transactions.

Key Points

PSPs are an all-in-one solution for businesses handling everything from transaction authorization to fund settlement.
Payment gateways only handle the secure transfer of payment data between businesses and financial institutions, so businesses still need separate merchant accounts and processors to complete transactions.

Payment service provider vs. payment gateway

While both a payment service provider and a payment gateway facilitate digital transactions, they play different roles:

Payment service provider (PSP): A PSP is a full-service payment solution that handles transaction approvals, fund transfers, security, and compliance. Businesses don’t need separate merchant accounts since the PSP handles everything.
Payment gateway: A payment gateway is a technology that securely transfers payment data between a business’s website and the financial institutions involved. It ensures sensitive cardholder information is encrypted and sent for processing.

A company using EBizCharge as its PSP gets an all-in-one payment platform, including a secure payment gateway, transaction processing, and direct integrations with accounting and ERP systems. A business using Authorize.net as a payment gateway would still need a separate merchant account and processor to complete transactions. The benefit of using a payment gateway instead of a payment service provider is that it offers more control over the pieces. You can choose specific processors for better rates, use custom fraud tools, or integrate with niche systems. Just understand that it will require more setup and ongoing management.

Businesses looking for a simple, all-in-one solution often choose a Payment Service Provider. Those wanting more control over their payment setup may prefer a separate gateway and processor.