Acquiring
Payment Service Provider
Also: PSP
A vendor that provides payment-acceptance technology, gateway, vaulting, reporting, sometimes acquiring, under one contract.
A Payment Service Provider (PSP) acts as a commercial and technical intermediary that allows merchants to accept electronic payments without necessarily establishing individual relationships with multiple banks or card schemes like Visa and Mastercard. The scope of a PSP often includes providing a payment gateway, tokenisation vaults for PCI DSS compliance, and consolidated reporting for various payment methods. In many instances, a PSP serves as a payment aggregator, using a single master Merchant Identification Number (MID) to process transactions for numerous smaller sub-merchants, which simplifies the onboarding process. Many modern PSPs also function as acquirers, managing the entire lifecycle of a transaction from authorisation through to settlement and the management of interchange fees. Depending on the jurisdiction, these entities are typically regulated by bodies such as the Financial Conduct Authority (FCA) in the UK or under PSD2 frameworks in Europe, requiring them to facilitate Strong Customer Authentication (SCA) where applicable.
Frequently asked
How does a PSP differ from a traditional merchant acquirer?
A traditional acquirer focuses primarily on the settlement of funds and providing a merchant account, whereas a PSP typically offers a broader technology stack including the gateway and risk management tools. Some PSPs provide their own acquiring services, while others operate as gateways that must be linked to a separate third-party acquiring bank.
Does using a PSP remove the requirement for PCI DSS compliance?
Using a PSP reduces the compliance burden by handling sensitive card data through hosted fields or tokenisation, but it does not eliminate it entirely. Merchants generally still need to complete a simplified Self-Assessment Questionnaire (SAQ) to prove that they do not store or transmit cardiovascular data on their own local servers.
Related terms
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