PSP Payment: A Lever for Success and Growth for Your Business
Even if your marketplace provides an excellent shopping experience, you will only make sales if you have a reliable, fast, and secure payment system. Complicated online or remote payment processes can lead to losing many customers. To manage this effectively, it is important to engage an online payment service provider (PSP).
What is a PSP Payment? Why Work with One, and How to Choose? Here’s Our Guide!
What is a Payment Service Provider (PSP)?
For successful online payments, several parties are involved. First, the customer pays for their purchase with a credit card or another payment method. The PSP, licensed by financial institutions, collects the data, processes it, and securely relays the transaction to the customer’s bank. The bank then analyzes and either approves or denies the transfer of funds from the customer's account to that of the business.
This process, which takes only a few seconds, largely depends on the efficiency of the PSP. In summary, a PSP is a specialized company that helps merchants receive online payments by acting as an intermediary between the merchant's site and the banks. In addition to facilitating payments, the PSP protects against fraud and ensures transaction security.
All PSPs must now comply with the European DSP2 directive, which mandates strong two-factor authentication for user identity verification.
What is the Role of a Payment Service Provider (PSP) for Your Business?
In summary, a PSP is a specialized company that assists merchants in receiving online payments, acting as an intermediary between the merchant's site and the banks. Besides facilitating payments, the PSP protects against fraud and ensures the security of transactions.
How PSPs Work
The payment process begins when the customer initiates a payment. They provide their payment information (credit card, e-wallet, etc.), whether online (via our Pay Online solution) or through a payment terminal like Pay On Site. The PSP receives this data, forwards it to the merchant's bank, which then sends it to the customer’s bank for authorization.
The customer’s bank checks the transaction, the availability of funds, and the buyer’s identity to prevent fraud. If everything is in order, the transaction is validated, and the merchant can complete the sale. At the end of the day, all authorized transactions are transmitted to the PSP for the funds to be transferred to the business.
How to Choose Your PSP?
Choosing your PSP influences the management of payments on your online store, positively or negatively. Here are four criteria to consider for providing a smooth and quick experience for your customers.
Performance of the Payment Solution
A Payment Service Provider (PSP) should offer various features to optimize the shopping experience and enhance cash flow management. These features may include automatic transaction confirmation, ensuring fluidity in the payment process. Check if it also offers complementary options such as:
- Payment reconciliation
- Efficient management of refunds
- Processing of multiple transfers
- Account aggregation An expert PSP should also provide innovative solutions that are easy to implement, accompanied by comprehensive and easy-to-understand documentation. The availability of a responsive and efficient support team for assistance in case of difficulties is also important.
Transaction Security
Ensure that the payment service provider complies with transaction security rules and the confidentiality of information. Since the introduction of DSP2, two-factor authentication is required to combat fraud and verify identity during online payments. All PSPs must adhere to this requirement.
Smooth and Optimized Customer Experience
The mission of a PSP is to help merchants increase conversions by providing innovative technology and a comprehensive payment solution for each buyer. A good PSP enhances conversions through a user-friendly interface and without technical issues. The fluidity of the payment process is essential for maximizing your sales.
Cost of the Payment Solution
A trustworthy payment service provider should have a clear pricing policy with no hidden fees. They should also be competitive regarding average market prices. Before signing a partnership with a PSP, verify that it is licensed by an institution such as the AMF and has an excellent reputation.
What Are the Benefits of Working with PSPs?
PSPs are essential for the proper functioning of marketplaces and online stores. Here are the main advantages of working with these providers.
Advanced Security Provided by Payment PSPs
To offer their services, PSPs must comply with financial market security standards such as PCI DSS or DSP2. These regulations ensure that customers' payment information is processed confidentially and securely.
In addition to enhanced security, the PSP payment offers a turnkey solution that can be easily integrated into your mobile application or website. Many providers also allow their clients to accept payments in multiple currencies, enabling you to handle international transactions and expand abroad.
Flexibility and Variety in Payment Methods
Thanks to PSPs, you can accept multiple currencies and various payment methods more easily. Some providers even allow payment through alternative means without a card.
Questions to Ask When Choosing the Right Payment Service Provider
To prepare for e-commerce sales, it is essential to ask certain questions to choose the right PSP.
What services and support do providers offer?
Inquire about the number of payment methods they support. Ensure that the PSP covers a wide range of payment options and offers features like "Buy Now, Pay Later" (as BNPL often involves card payments, it cannot be claimed that it’s for those who do not like credit cards).
Is it easy to change and add providers?
Your business needs and requirements will evolve over time. Ensure that your partnership with a payment provider does not prevent you from working with other providers if the need arises.
Choosing a good PSP can truly accelerate the growth of your business, whether online or offline. Take the mentioned criteria into account to select the service that best meets your requirements.
If you want to learn more about Market Pay solutions, feel free to contact our teams here.
