How PSP payment works: A simple guide

1. What is a payment service provider (PSP)?

A payment service provider (PSP) is a third-party company that enables businesses to accept electronic payments from customers through a single, integrated platform. Rather than requiring a business to forge separate connections with various banks, credit card firms, and regional payment services, a PSP provides one cohesive platform to handle all payment transactions.

PSPs play a crucial role in online commerce by allowing businesses to accept diverse payment options securely from customers around the world, which broadens their market access and enhances their financial processes.

2. What does a payment service provider do?

Payment gateway services

A PSP primarily offers a payment gateway, which is a secure channel that encrypts and sends payment details from the customer's device to the payment processor. This ensures that sensitive information, like credit card numbers, remains safe during transmission.

Payment processing

After receiving payment data, the PSP functions as a payment processor. It directs the transaction request through the relevant card networks (like Visa and Mastercard) to obtain authorization from the customer's bank.

Multiple payment method acceptance

One of the main advantages of PSPs is their ability to allow merchants to accept various payment methods. These include major credit and debit cards, popular digital wallets (such as PayPal, Apple Pay, Google Pay, and local e-wallets like 9Pay, ZaloPay, MoMo in Vietnam), bank transfers, and newer options like Buy Now, Pay Later (BNPL).

Currency conversion

For international transactions, PSPs manage currency conversion so businesses can receive payments in their chosen currency while customers pay in theirs. Some PSPs offer Dynamic Currency Conversion (DCC), allowing customers to select their preferred currency at checkout.

Fraud prevention & compliance

PSPs employ strong security protocols, including compliance with PCI DSS, tokenization, encryption, and advanced fraud detection tools (using AI/ML analysis and 3D Secure), protecting both merchants and consumers from scams and data breaches.

Settlement and reporting

Once a transaction is approved and finalized, the PSP oversees the settlement process, ensuring funds move from the customer’s bank to the merchant's account. They also provide detailed reports and analytics that give insights into sales data, transaction history, and reconciliation.

Compliance management

PSPs assist merchants in navigating complex local and international payment regulations, ensuring adherence to necessary laws (AML, KYC) without requiring merchants to be experts in every region.

3. Benefits of using a payment service provider

Partnering with a PSP offers numerous advantages:

• Simplified Integration and Setup: Instead of integrating with multiple banks and payment systems, businesses only need a single integration with their chosen PSP. This saves significant development time and resources.
• Multiple payment methods: Accept a variety of payment options (cards, e-wallets, bank transfers, BNPL, etc.) through one platform, catering to diverse customer preferences. This increases conversion rates by reducing cart abandonment.
• Global reach: Support for multiple currencies and international payment methods enables businesses to expand into new markets effortlessly.
• Enhanced security: PSPs employ robust encryption, fraud detection, and compliance protocols, reducing the risk of data breaches and chargebacks.
• Easy integration: Modern PSPs provide user-friendly APIs and plugins for quick integration with websites, mobile apps, and e-commerce platforms.
• Simplified Operations: Payment Service Providers (PSPs) streamline payment processes by offering centralized management through unified dashboards that enable real-time tracking, reporting, and reconciliation, enhancing both financial transparency and operational efficiency.
• Cost efficiency: Transparent pricing models and reduced need for in-house payment infrastructure lower operational costs.

4. How to choose the right PSP for your business

Selecting the ideal PSP is a critical decision that can significantly impact your business's growth and profitability. Consider the following factors:

Supported payment methods: Does the PSP support the payment methods preferred by your target audience? Can it facilitate transactions in the countries where you operate or plan to expand?

Pricing structure and fees: Understand all costs involved, including per-transaction fees, monthly fees, setup fees, chargeback fees, and currency conversion rates. Look for transparency and compare costs across different providers.

Security and Compliance: Verify the PSP's security certifications (e.g., PCI DSS Level 1) and its adherence to relevant data protection and financial regulations in all operating jurisdictions.

Integration capabilities: Assess how easily the PSP integrates with your existing e-commerce platform, website, or enterprise resource planning (ERP) system. Look for robust APIs, SDKs, and readily available plugins.

Scalability: Choose a PSP that can grow with your business, handling increasing transaction volumes and adapting to evolving payment needs as you expand.

Customer support: Evaluate the quality and availability of customer support. Responsive and knowledgeable support is crucial for resolving any payment-related issues promptly.

Reporting and analytics: Examine the reporting features offered. Comprehensive analytics can provide valuable insights into customer behavior, sales trends, and financial performance.

Payout speed and flexibility: Understand the settlement times (how quickly funds reach your bank account) and whether the PSP offers flexible payout options.

Industry expertise: Some PSPs specialize in certain industries (e.g., SaaS, gaming, retail). Choose one with experience in your sector for tailored solutions.

Understanding how PSP payment works is crucial for any business aiming to go global. The right PSP not only simplifies integration and improves customer experience but also helps you comply with local regulations, especially in markets like Vietnam, where payment preferences and legal frameworks differ significantly from Western standards.

Solutions like 9Pay and its cross-border service 9Remit empower international PSPs and merchants to operate efficiently in Vietnam, providing localized payment rails, regulatory support, and a trusted infrastructure.

5. What is 9Pay's 9Remit Service?

9Remit is a cross-border remittance service developed by 9Pay, a licensed payment intermediary in Vietnam. It is designed to help individuals and businesses send and receive money internationally in a faster, more affordable, and fully compliant way.

9Remit is 9Pay's pioneering international transfers solution that helps businesses overcome financial challenges when doing business in Vietnam.

Why Choose 9Remit?

• Unlimited international transfers with superior speed

- Low transaction fees and competitive exchange rates
- Smooth daily processing allows money to be received on the same day, with no limits on transaction amount or frequency

• Comprehensive tax and regulatory compliance

- Expert support  on contractor taxation in Vietnam
- Guidance on document types for varied pay-in sources to ensure full compliance

• World-class support services

- Dedicated financial, legal, accounting, and technical experts

Fast, secure, smooth, transparent, and accurate transaction processing
9Remit ensures your business maintains a stable, legal, and optimized cash flow, empowering sustainable growth and market expansion.

We would be delighted to support your business. For more details, please contact our experts at:

Request for support now

Hotline: 1900 88 68 32

Email: business@9pay.vn

Website: 9pay.vn/en