In today’s world of ever increasing global e-commerce, many new business owners are faced with the dilemma – “which PSP platform should I use for my online shop?”
There is no short answer to this question, therefore, it is best to start from the beginning – what is a PSP and what are the differences between what is offered?
Generally speaking, there are three types of payment service providers – aggregators, distributors and collectors. All PSPs are designed to facilitate online payments and suit different business objectives. Apart from the obvious service of enabling a business to accept money online, they differ by contractual terms, fees and payouts and the actual technical process of moving money.
Let’s briefly look at the PSP types:
The industry wording for these PSP types may sound a little strange, but it boils down to the functionality behind the scenes which always achieves the same objective – money transfer.
Distributors – They build and maintain a single interface (usually a restful API) for several payment methods, making it easy for the technical integration of a merchant.
Collectors – These providers take it one step further, adding a single settlement process for the different payment methods.
Aggregators – They collect the money on behalf of the merchants by contracting with the individual payment methods.
All in all, there are no pros and cons – there are only business cases. What solution is best for you, depends entirely on your needs. There is a huge variety of services offered in the market and it falls down to you to choose which one fits your requirements best. If you find yourself struggling to match your business case with any of the payment service providers out there, don’ t hesitate to drop us a line – we know payments. 🙂