Who can use the services of a payment service provider?

The health crisis has led to a sharp increase in online purchases, generating 112.2 billion euros, an increase of 8.5% in one year (France). This trend has naturally encouraged many people to embark on the adventure of e-commerce. However, to ensure an optimal operation of its platform, an e-retailer must take into account many parameters, including the choice of its payment service provider.

Indeed, any entity making online payments requires the services of a PSP (Payment Service Provider) in order to regulate the acceptance of payments made on its platform. A payment service provider is the approved company in charge of offering its electronic payment services to a merchant.

Nowadays, e-commerce sites are becoming increasingly diverse, many players can benefit from a payment services provider. Let’s figure out !

The role of a payment service provider is to provide a merchant with turnkey solutions to enable them to accept payments. In order to guarantee the security of transactions and ensure the collection of funds on accounts, the PSP is subject to numerous regulations. Indeed, it must be approved as an “Electronic Money Institution” by the ACPR (Banque de Franque) and is also subject to certain mandatory European security standards DSP2, in particular with the PCI-DSS certification. In the online payment ecosystem, several players can benefit from the PSP cap:

• Traditional bank
• Independent payment institution (like CentralPay)
• Online payment gateway (Paypal, Paylib…)

The payment solutions provided by the PSP are pre-integrated gateways, which can be easily integrated on a merchant platform. The objective is to allow the seller to enrich his payment methods (bank cards, transfers, direct debits, electronic wallets, deposits…), his payment facilities (one-click, staggered, deferred…) and the currencies offered, to adapt to the products or services sold as well as to the consumers’ abilities/lifestyles. Today, the payment service provider is therefore able to offer its services to many online retailers.

In France, 32% of companies have a website, but only 6% use it to make online sales (2020 study – Direction Générale du Trésor on the digitization of French companies.The lack of payment skills is the main reason given by the VSE and SME managers interviewed.
Faced with this observation, the payment service provider has a dual role. Firstly, it offers its services to all companies with an e-commerce solution, by proposing its catalog of payment methods and facilities. But the PSP is also an intermediary between the customer and the merchant company, facilitating the acceptance of customer payments in full transparency. It is also an intermediary between the e-retailer and the bank.

For a company, online payment is a guarantee of security and efficiency. It has many advantages:

• Receive payments 24 hours a day, without any human intervention.
• Secure transactions, in particular thanks to the 3D Secure security system. This security protocol aims to prevent fraud by verifying identity at the time of a transaction (biometric data or code), thus ensuring that the card is actually used by its holder.
• Facilitate accounting management, by sending real-time information that saves time and reduces the risk of errors (invoices, email notifications on payment status, etc.)
• Give a modern and professional image, thanks to the integration and customization of payment forms within the site.
• Support the marketing strategy, allowing to adapt to the specific needs of certain customers (payment in x times, multi-participants payment…).

Marketplaces are a specific case of e-commerce sites. Indeed, they are platforms which put in relation merchants and consumers. These multi-seller sites offer, thanks to their audience, to sell products or services to a large number of potential buyers.

In this model, the payment service provider has several roles. When enrolling new merchants on the platform, it is responsible for identity verification (KYC / KYB), and then for opening an account for each merchant. In addition, the PSP will collect the funds from the third party account and then redistribute them to the merchants involved in the sales. Thanks to this system, the merchant does not have to take into account any additional security costs, as these are provided by the PSP. The goal is to ensure PCI-DSS compliance of the marketplace solution’s merchant accounts, in order to ensure the protection of seller and buyer funds.

For the past few years, this win-win sales model has been a real success, which has caught the eye of the regulator. Thus, since January 2018, the PSD2 (European Payment Services Directive No. 2) has introduced new rules to avoid abuses. Indeed, marketplaces are required to acquire the status of “Payment Services Agents” and no longer only that of commercial agent in order to orchestrate the financial flows of their platform. Unless they obtain this license, they can no longer hold funds on behalf of third parties as was previously the case. This is where the payment service provider plays a crucial role. Indeed, these payment institutions regulated by the ACPR (Banque de France), are able to provide payment services under their responsibility.

With its “Marketplace” solution, CentralPay is approved by the ACPR to assist platforms in preparing the “Payment Services Agent” file.

By definition, the payment service provider provides a partner with turnkey solutions to enable it to accept payments. It is therefore possible for a PSP to work with an integrator, such as a software publisher for example. Indeed, the latter’s role is to integrate payment modules into its solution, which will then be used by its customers. This technical partnership allows the integrator to add a payment offer without inheriting the regulatory constraints of a platform. For a software publisher, the advantages are numerous:

• Create or increase its added value by enriching its catalog with innovative technological payment solutions
• Simply open accounts for each user of the solution (in partnership with the PSP’s compliance department)
• Provide customers with a payment solution that is accessible from its technical environment and allow each merchant to access all its services from the API or DashBoard.

With this in mind, the payment provider can therefore integrate its payment brick into numerous software applications:

• CMS (Content Management System), i.e. turnkey e-commerce modules: Magento, Shopify, Prestashop…
• Business solutions, i.e. management software and third-party solutions (ERP, accounting tools, collection solutions, etc.)
• Cash register solutions (Electronic Payment Terminals, cash registers…)
• Web agencies

The payment service provider does not replace the relationship between the publisher and the customer. It simply provides a DashBoard integrator that allows to supervise and make the necessary technical settings directly on behalf of the users.

At CentralPay, we support you in the digitization or optimization of your payment processes, to help you imagine tomorrow’s purchasing paths. Want to know more? Contact us now!