Payment Service Provider (PSP)

Due to the strong penetration in society, the credit card has become the most used payment method on the Internet. A big advantage of paying by credit card is that the payment process is identical for every end user around the world. However, there are significant differences for retailers if they want to offer payment by credit card on their own websites. The payment service provider (PSP) takes care of connecting the internet shop to the credit card company. However, he himself does not issue any credit card acceptance contracts (merchant contracts). However, a direct connection to a credit card company is not feasible due to the high technical complexity.

For this reason, the Payment Service Provider (PSP) acts as a kind of catalyst and processes a large number of transactions from the various merchants and submits them accordingly. The Payment Service Provider (PSP) usually charges a pure transaction fee for this service.

The payment service provider (PSP) is entitled to commission other companies to collect credit card payments via its credit card acceptance contract. This form of credit card billing is also known as sub-acquisition or third-party billing and is prohibited in Europe.

The credit card companies divide the world into six distinct regions. An internet retailer is subject to the requirements of the region in which it is based.

The regions are broken down as follows:

• United States
• Canada
• Europe
• Central & Eastern Europe, Middle East & Africa
• Caribbean & Latin America
• Asia Pacific