Payment System Provider (PSP)

Financial institution that plays the role of an intermediary between the customer (payer) and the merchant and bank. They produce financial transactions and earn part of the payment traffic as a commission (profit).

payment system
The most popular PSP business models
  • Accepting electronic payments online - aggreagtor model or unified
  • Reccurent payment - transactions applied to a player in prdetermined time intervals for services or goods of an ongoing nature (memberships,subscriptions)
  • Payroll - the organisation of the financial record of employees' salaries, wages, bonuses, net pay, and deductions
  • Money transfer - money transfer between individuals with payments via any point of payment (for example, payment kiosks) and any point of withdrawal (money transfer systems offices, cash, exchange points, banks, etc.)
  • Currency exchange - service that allows customers to exchange one currency for another
  • Card to card - service that allows customers to transfer money from cards to cards
  • PSP e-commerce- service that allows users to pay third parties for different services
Accepting electronic payments online
You can choose the aggregator or unified model to accept payments
  • Aggregator model
  • Unified model

Administrative options

  • Control over merchants
  • Payment gateways - add & manage any payment gateway into the system
  • Add & manage contracts
    • Set the rules of a contract: limits, commission rates, currency exchange rates, thresholds
    • Set the limits rules: per transaction/day/week/month, per operations,top up/withdrawal/money transfer between accounts
  • Dispute resolution system (DRS) - solve arguments between users (an example: merchant/payer)
  • Refund and chargeback operations - manage and resolve the return process of funds to a consumer forcibly initiated by the consumer's issuer of the payment instrument
  • Money withdrawal acceptance
  • Reporting & analytics
    • Basic - transaction reports
    • Advanced - data analytics and visualisation based on a business model
  • XML or Web Services Integration- a connector that acts as a "translator" between customers and suppliers allowing different formats or programming languages ??(usually XML) to be compatible
  • System logs & alerts- store the history of all events inside the system

Merchant functionality (back-office dashboard)

  • Multi-currency merchant account
    • Balance
    • Points of sale
    • Receive payments
    • Withdrawal
  • Merchant profile
    • Company profile
    • Contact details
    • Bank account details
    • Contract details
    • Compliance procedures
  • Setup & manage services
    • One-click payment: set the service that allows customers to make online purchases with a single click. The payment information needed to complete the purchase should be entered by the user previously. The merchant stores it in encrypted format
    • Refund: manage and resolve the return process of funds initiated by the payer to a consumer
    • Invoice: generate personal/non-personal invoices with unique ID for one-time payments
    • Payment forms: generate special pre-filled form for reusable payments
    • Multiple points of sale (POS): configure different places where a retail transaction is completed (online stores)
    • Recurring payments: transactions applied to a payer in predetermined time intervals for services or goods of an ongoing nature (memberships, subscriptions)
  • Reporting & analytics
    • History overview (list of transactions)
    • Transaction details overview (payer details, amount of payment, payment type (recurrent payment or not), purpose, currency, invoice number)
    • Advanced data analytics and visualisation of unstructured payments data, transforming it into a rich source of strategic insights that helps optimise the online business and drives sales
  • Payment page configuration
    • Available payment methods
    • Requested information from the payer (name, contact details, etc.)
  • Withdrawal - initiate money withdrawal from the merchant account
  • Provide limited access to employees via Merchant Operator
  • API(payment interfaces integration)
  • Block users - manage for security purposes the list of users who are not able to make payment operations
  • Money withdrawal acceptance
  • Reporting & analytics
    • Basic - transaction reports
    • Advanced - data analytics and visualisation based on a business model
  • XML or Web Services Integration- a connector that acts as a "translator" between customers and suppliers allowing different formats or programming languages ??(usually XML) to be compatible
  • System logs & alerts- store the history of all events inside the system

Business processes

  • Onboarding - merchant identification process
  • Know your client (KYC) - merchant verification process
  • Two-factor authorisation - identification of users by combining two different components (phone/sms, for example)
  • Risk-management - the process of identifying and managing the risks that PSP faces
  • Withdrawal - automated or manual process of money withdrawal
  • Rolling reserve - a part of risk management strategy to protect the merchant and its banks from potential loss due to chargebacks. Rolling reserves means that a certain percentage of each transaction that is kept on hold for a defined period of time will be released at the end of that period

Primary actors

  • Merchant - accepts payments online
  • Payer- someone who pay to merchants for goods/services

System actors

  • Chief financial officer (CFO) - responsible for the financial and economic essence of the business
  • Compliance manager - manages the merchants and ensures the security of their involvement in the KYC system (know your customer)
  • Anti-fraud manager - responsible for fraud risk management and dispute resolution between all members in the system
  • Business development manager (BDM) - responsible for merchant onboarding and revenue plans
Payroll PSP business model
This business model is suitable for major money transfers to individuals (payroll)
  • Salaries
  • Bonuses
  • Other types of mass payments

The key advantage is the automation of mass payments process

Administrative options

  • Control over all operations
  • Create an operator to generate applications
  • Create a group of users for mass payments
  • Upload a payroll statement with the data
    • Payment amount
    • Payment currency
    • User's ID
  • Create an application for withdrawal
    • In manual mode
    • In automatic mode
  • Schedule applications
  • Accept applications
  • Access to history of transactions
  • Reporting
This business model is suitable for major money transfers to individuals (payroll)

Primary actors

  • Payroll manager
  • Individual(receiver or transfer)

System actors from a financial institution

  • Chief financial officer (CFO) - responsible for the financial and economic essence of the business
  • Compliance manager - manages the merchants and ensures the security of their involvement in the KYC system (know your customer)
  • Anti-fraud manager - responsible for fraud risk management and dispute resolution between all members in the system
  • Business development manager (BDM) - responsible for merchant onboarding and revenue plans
Money transfer

Money transfers take place between individuals via any point of payment (for example, payment kiosks) and any point of withdrawal (money transfer systems offices, cash, exchange points, banks, etc.)
Learn more

Currency exchange

Currency exchange is a service that allows customers to exchange one currency for another
Learn more

Card to card

This service allows customers to transfer money from cards to cards online. The Card to Card money transfer business model is very simple. The PSP is an intermediary between the cardholders' banks. Such services earn part of the payment traffic as a commission (profit)
Learn more

PSP e-commerce
PSP e-commerce is a complex interbank system of invoice delivery and payment

This platform allows users to pay for different services to third-party providers. It is very popular business model. Such services earn part of the payment traffic as a commission (profit)

This business model provides service to two groups of users

  • Payers - possibility to pay for invoices
  • Service providers - service that receives payments

System users are not required to be the customers of a particular bank. It is enough to be a cardholder of Visa or MasterCard. Usually, the users of such system are able to pay via payment card to a great number of services, such as

  • Mobile operators
  • ISPs (Internet service providers)
  • TV providers
  • Utilities
  • Online games
  • Insurance
  • Money transfer and card to card services, etc

System actors from a financial institution

  • Control over all operations
  • Add & manage the list of service providers
  • Set the rules of a contract - limits, commission rates, currency exchange rates, thresholds
  • Set the limits rules - per transaction/day/week/month, per operations, top up/withdrawal/money transfer between accounts
  • Payment gateways - add & manage any payment gateway into the system
  • Dispute resolution system (DRS) - solve arguments between users (an example: merchant/payer)
  • Setup & manage services
    • One-click payment - set the service that allows customers to make online purchases with a single click. The payment information needed to complete the purchase should be entered by the user previously. The merchant stores it in the encrypted format
    • Recurrent payments - transactions applied to a payer in predetermined time intervals for services or goods of an ongoing nature (memberships, subscriptions)

Typical list of actors for PSP-Ecommerce business model

  • Primary actors:
    • User - pays for services to service provider
    • Service provider - receives payments from users
  • System actors of financial institution
    • Chief financial officer (CFO) - responsible for the financial and economic essence of the business
    • Compliance manager - manages the merchants and ensures the security of their involvement in the KYC system (know your customer)
    • Anti-fraud manager - responsible for fraud risk management and dispute resolution between all members in the system

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