Payment service providers are companies supporting the connection of payment methods in online shops. In addition to traditional payment service providers, i.e. credit institutions and banks, there are more and more companies that specialize in the processing of online payments in addition to the payment by credit card and other payment methods. This type of payment service provider is becoming increasingly popular with merchants, as they do not have to connect each payment method individually.
Payment service provider often cover several payment methods. Internationally, credit cards and e-wallets play an important role. The biggest credit card brands include Visa, MasterCard and American Express. Depending on the country's focus, national credit cards, such as Cartes Bancaires or CartaSi, are important for the checkout procedure. Direct debit procedure is, in some countries, an important method for recurring payments and, particularly, for marketplaces. Cash payment methods, where users can pay their bill at the checkout in the supermarket, such as Oxxo or Boleto Bancario, are very popular alternative payments methods, especially in countries with low bank account penetration.
Customer data is sensitive, and must therefore be well protected, as stated under data protection laws. When selecting the PSP, particular attention should be paid to the security and trustworthiness of the PSP in order to protect customer payments and personal information. The basic requirement is the PCI certification. This ensures that the payment provider complies with the current regulations and standards in payment and that data such as credit card numbers or customer addresses are protected.
To protect against payment fraud, PSPs offer different fraud management solutions, which are either included in the monthly fee or charged separately. Depending on country coverage and payment methods, fraud requirements vary.
Pricing plays an important role in the selection of payment providers. Every PSP has its own cost structure. Fees are usually split into setup fees, monthly provision fees, transaction costs and discount on credit card transactions. The costs vary greatly depending on the transaction volume, shopping cart, used payment methods or other services that are covered.
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