As a merchant or e-merchant, you must accept online and in-store payments. To do this, you can use a payment service provider (PSP). It will act as a bridge between you and the banks to facilitate your sales.
But who are they, and how do you choose the PSP best suited to your business? Find out in this article how PSPs can turn your payments into a growth lever for your business.
How does a payment work?
Before delving into the functions of a PSP, it is necessary to understand the stages of a payment journey.
Behind the act of buying lies a complex involving various players in a matter of seconds:
- The cardholder, your customer, pays for his or her purchase using his or her payment card or another payment method.
- The PSP acts as a payment gateway to collect the data and as a payment processor to process and transmit it to the acquirer.
- The acquirer, authorised by financial institutions and card networks, relays the transaction securely. This role is taken by the merchant's bank (or acquiring bank) or certain PSPs, which thus control the entire payment chain (such as Payplug).
- The card networks (CB, Visa, Mastercard) retrieve the transaction data and transmit it to the issuer (the bank), which supplies the customer's payment card.
- The issuing bank analyses and authorises or declines the transaction. The information is then sent back to enable or prevent the transfer of funds from the buyer's account to the merchant's account.
What is the role of a PSP?
At the heart of the payment journey, the PSP primarily enables merchants to securely accept online and in-store payments. However, your Payment Service Provider's role can extend further:
Providing different payment methods
The bank card is the payment method most commonly used by consumers in France. However, some PSPs offer merchants a wider range of payment methods to help them expand into new markets or increase their sales:
- Payment facilities: split and/or deferred payment or one-click payment.
- Local payment methods: iDEAL, Satispay and Bancontact.
- Alternative payment methods: American Express, Apple Pay and Google Pay.
Combatting fraud
The Payment Services Directive 2 (PSD2) has strengthened the security of online payments by making strong authentication mandatory unless an exemption applies.
In this context, payment service providers ensure good risk management by relying, among other things, on :
- their expertise;
- rule engines that trigger strong authentication of payments at the right time.
Optimising payment performance
By reducing their level of fraud, merchants can take greater advantage of PSD2 exemptions. This is when PSPs can step in to maximise the acceptance rate of card payments.
Depending on the risk appetite of merchants, PSPs can support them in fostering frictionless payment transactions (without strong authentication). Customers thus enjoy a quicker shopping experience, making a final purchase more likely.
Helping you implement your payment strategy
Last but not least, the PSP supports merchants in implementing their payment strategy.
Payplug is taking on a more comprehensive advisory role thanks to its central position in the merchant ecosystem. We assist merchants in understanding the market and the interconnections they may find, particularly with cash register software, CMS and maintainers, to name but a few. Omnichannel integrations will enable you to unify your data to boost your conversion effectively.
How to choose your payment service provider?
Today, multiple solutions are available to you, but how do you make the right choice? Here are a few ideas to get you started.
First, it is crucial to understand your market and your customers to define your strategy, your goals, and identify your needs:
- Do you operate online and in-store? If so, it's in your interest to opt for an omnichannel payment solution that will centralise your payment data in a single back office.
- Are your customers more broadly international? Consider selecting payment methods best suited to your target markets.
- Is your average transaction value (ATV) over €50? Split payments can facilitate your customers’ payments and increase your conversion rate.
Next, you need to think about your business ecosystem:
- Which CMS is your e-commerce site hosted on?
- What cash register software do you work with?
- Do you use an ERP or other accounting tool?
Based on these elements, you can choose a payment solution that integrates perfectly with your ecosystem. This will facilitate its deployment and the transmission of data between your tools.
It is also essential to analyse your current payment solution:
- Is your payment page optimised?
- Is your acceptance rate consistent and maximised in relation to your industry average?
- Based on your fraud rate and risk appetite, are you sending enough frictionless authentication requests?
Ultimately, you need to take a step back and focus on your main objective: is it primarily to optimise your conversion or to simplify your accounting? Your choice of payment solution depends on your expectations.
Merchant testimonial
- The technical clothing brand Seagale first launched online before opening stores in Toulon and Paris.
With omnichannel at the heart of its strategy, Seagale is working with Payplug to:
streamline the shopping experience with an integrated payment page on their PrestaShop site;
cash in their customers at the counter or on the shelf, using the Tap to Pay app available on iPhone ;
optimise up-selling with payment per link ;
centralise all their transactions in a single back office;
simplify account monitoring with a single accounting export.
Would you like to set up a payment solution that meets your expectations and those of your customers?
