What Is a PSP (Payment Service Provider)?
A payment service provider is the company that connects your checkout to the card schemes and local payment methods, submits transactions for authorisation, and reports on them. Some PSPs also hold the acquiring licence; many route your transactions to a separate acquiring bank.
What a PSP actually does
- Provides the checkout, hosted page, SDK or API your customers pay through.
- Tokenises and stores card credentials so you can bill again without holding card data.
- Routes each transaction to an acquirer or scheme for authorisation.
- Applies 3-D Secure and fraud screening rules.
- Handles refunds, chargeback notifications and reporting.
What a PSP does not do
A pure PSP does not carry the card-scheme licence and does not underwrite your business. Where the PSP is a technical layer only, the acquiring bank behind it decides whether your business is accepted and on what terms, including reserves and settlement timing.
PSP, payment gateway or payment facilitator?
Gateway
A gateway is the narrowest role: it transmits transactions. It does not hold funds and does not settle to you.
Payment facilitator
A facilitator (aggregator) onboards you as a sub-merchant under its own master account. Onboarding is fast, but the facilitator can also withdraw acceptance quickly if your profile changes.
PSP with own acquiring
Some providers hold both the technology and the licence. That simplifies contracts, but it also means one relationship controls both your checkout and your settlement.
How to evaluate a PSP
- Authorisation rate in your main markets, not global averages.
- Local payment methods and currencies supported where you actually sell.
- Whether it accepts your industry and business model in writing.
- Settlement frequency, settlement currency and FX margin.
- Integration effort and PCI scope for your checkout.
- Whether stored card credentials can be migrated out later.
Related guides
What is an acquirer?
An acquiring bank is licensed by the card schemes to accept card transactions on your behalf, holds your merchant account, and settles the funds to your bank. It also carries the financial risk if you cannot refund your customers, which is why the acquirer, not the gateway, decides whether you are accepted.
PSP vs acquirer
The PSP provides the technology and the commercial relationship; the acquirer holds the scheme licence, underwrites your business and settles your money. Many merchants need both, sometimes bundled by one provider, sometimes contracted separately.
How to choose a payment processor
Start with acceptance, not price. Confirm that the provider's acquirer will underwrite your industry, countries and volume; then compare approval rates, payment methods, settlement terms and total cost, and check how you would leave if it does not work out.
Find a payment provider that fits your business
Add your business essentials once and see which PSPs and acquirers match your profile before applying.
Find my payment providerNothing is shared with a provider until you submit your onboarding pack. Approval is always the provider's decision.