What is an online payment service provider (PSP) and how do these services help online businesses and retailers to enable and take payments? To start, a PSP offers online payment solutions that empower merchants and sellers to accept credit and debit card payments on multiple channels including phone and online store. In addition, PSPs also offer other services such as transaction reconciliation, fraud protection, and risk management.
Online PSPs are regulated which means you are assured of good service standards and consistent features from leading players in this market. However, it may be difficult to zero in one particular provider because no one really stands out among the crowd. To select a suitable PSP, you need to consider price and the standard features included in the service terms.
Established PSPs are likely to charge more. Make sure the PSPs in your shortlist offer the following standard features:
- Acceptance of payments from a wide range of cards
- Transaction reporting
- Security measures to prevent fraud
- Technical support
Benefits of Online Payment Service Providers:
Now that you have learnt the basics of PSPs, let’s look at the benefits these services offer to merchants and sellers:
Meet Consumer Expectations
ECommerce is booming worldwide and consumers are comfortable buying many important products and items online. Global eCommerce sales are predicted to top $2.3 trillion in 2017. Therefore, it makes sense for businesses to tap into this lucrative market and sell products and services on their website. Thus, online PSPs are essential services that enable tech-savvy companies and online retailers to meet consumer expectations and cash in on the latest technological trends.
Manual payments like checks are slow and typically take a few days. Plus, you are not sure if the consumer has enough funds in their account which raises the risk of check bounce. In contrast, online payments are instantaneous. Businesses can immediately confirm transactions and improve their cash flow. Better yet, some PSPs integrate with ERP, linking real-time transactions with accounting records. What is ERP software? It’s a platform that integrates sales, purchasing, accounting, Human Resource, customer support, CRM and inventory.
With manual payments such as checks, you need to physically go to the bank to deposit the check. Plus, you need to manually record the payments. Online payments are superior as payments and updates get automatically processed.
Help with Opening Merchant Accounts
Merchants need to apply to open an account with an acquiring bank to accept credit and debit card payments. However, they may need to wait for some time to get their account approved. A PSP can provide assistance in this process as they can apply on the merchant’s behalf and save them time. Some PSPs provide access to unified merchant accounts that are part of the PSP’s existing account with the acquiring bank. Merchants can use this facility to quickly launch payment services as the PSP’s acquiring bank account has already been approved.
Support for Multiple Payment Methods
Online PSPs enable merchants to accept multiple payment methods such as debit cards, credit cards, mobile money, mobile wallets, and more. The PSPs support these different payment methods with a single simple integration. In addition, merchants are not required to set up each individual payment method.
A recent Fiserv study reveals that 43% of consumers like to buy at online stores that offer multiple payment options. Thus, a PSP enables online businesses to improve customer satisfaction. Another advantage of an online PSP is merchants can manage and review all transactions online on the provider’s web-based payment platform.
PSPs Accept Mobile Money and Cross-Border Mobile Payments
Mobile payments are fast and effective, and are a great replacement for credit cards and cash. You can simply use a mobile device to pay for products and services. Top online PSPs accept mobile money and cross-border mobile payments which makes things simpler for consumers and sellers. The benefits of mobile payments are:
- people without a bank account get access to financial services
- they are convenient and simple to use
- merchants can accept payments at any location
- enhanced security for transactions
- borderless payments as a result of cross-border and multicurrency transactions
Support for Several Currencies
Online businesses that wish to go global need to invest in a quality PSP that offers support for numerous currencies. This will enable them to take easy and quick global and cross-border payments. The PSP makes this happen by entering into partnerships with banks that provide processing facilities for particular currencies. Merchants need to do due diligence and select a PSP that provides a unified payment solution to avoid having to open different accounts for different currencies.
Enhanced Security for Financial Transactions
Perhaps the foremost issue concerning online transactions is reliable security. In fact, a recent Bizrate Insights study shows that 34% of consumers are wary of online shopping because they are worried about the security of their personal and credit card information. PSPs resolve the security issue as they use PCI DSS (Payment Card Industry Security Standards Council) certification to provide a secure and protected network for conducting financial transactions. Merchants can utilize a payment webpage hosted by a PSP that is PCI DSS compliant to keep their buyers’ sensitive data secure and safe, giving them the assurance and confidence to go ahead with their online purchases.
Select a PSP that offers technical support as a standard service. This is important because some services provide technical assistance as an extra service for which you may be charged. Top PSPs offer 24/7 technical support through multiple channels such as phone, email, and live chat.
All the above benefits can be availed from a PSP by paying their subscription charges which may include a monthly and transaction fee as well as setup costs. However, these are essential expenses for an online business. Do your homework diligently and select a PSP that offers the best value for money. You can browse a reliable online source such as the FinancesOnline.com review site for expert reviews of leading online payment service providers.