The e-commerce landscape is booming, with global sales projected to hit US$4.12 trillion in 2024 and anticipated to climb to $6.48 trillion by 2029. In the United States and Europe, nine out of ten consumers have made a digital payment over the past year. As more consumers embrace online shopping, merchants need to adapt to this digital shift.
Part of this is understanding payment service providers (PSPs) and how to choose the best one for your business. The right PSP can support your business's growth by offering the right mix of payment methods, security, customer experience and scalability.
A payment service provider is a company that provides services allowing businesses to accept transactions from customers. Acting as an intermediary between merchants, banks and customers, they enable a wide range of online payment methods including credit card payments, debit cards, digital wallets, mobile payments, bank transfers and Buy Now, Pay Later, through one integration.
When a customer makes a purchase online, the PSP manages the entire payment process to ensure a seamless transaction. The typical steps include:
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Step 1 Payment authorisation The customer selects a payment method and enters their payment details. The PSP securely transmits this information to the acquiring bank and relevant financial networks to request authorisation. |
Step 2 Transaction processing Once authorised, the PSP processes the payment by communicating the transaction request with the issuing financial institution to transfer funds from the customer's account to the merchant's account. |
Step 3 Settlement After processing, the PSP ensures the funds are settled and deposited into the merchant's account. |
What do payment service providers do?
PSPs don't just facilitate payments though – they offer a suite of services that streamline and secure the transaction. These include:
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Payment gateway services
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Security and fraud prevention
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Global payment processing
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Reporting and analytics
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Compliance and regulatory adherence
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Providing customers with their preferred payment method goes a long way in enhancing their shopping experience. When customers can choose their preferred payment option, they're 54% more likely to complete a purchase, leading to higher conversion rates and reducing cart abandonment. Conversely, almost 1 in 10 consumers cited a lack of payment methods as their reason for not finalising their purchase.
In addition to boosting conversion rates, accommodating diverse payment preferences can expand your customer base and increase customer loyalty. 44% of consumers are more likely to trust a business if they have a robust payment process with their preferred payment method.
On a basic level, a PSP lets you focus on your business by taking care of the entire payment process. But partnering with a payment service provider offers other advantages too, from reaching more customers around the world to streamlining your business operations. Here's a breakdown of the key benefits.
Selecting the right payment service provider directly influences your transaction efficiency, customer satisfaction and overall growth. Consider the potential disruption and costs if you select a PSP for your current business stage but outgrow it within a few years.
This could lead to operational challenges, such as system limitations that hinder transaction processing, and may require a time-consuming and costly transition to a more suitable provider. Or, if your PSP lacks strong security measures, your business may become vulnerable to data breaches, leading to financial losses and reputational damage.
Begin by evaluating your specific requirements, both now and in the future. You'll want a PSP that can grow with your business.
With 43% of e-commerce consumers having experienced payment fraud, security is vital in payment processing.
Understanding payment processing fees and choosing the right structure will directly impact your profit margins; choosing a cost-effective payment processor is essential.
If you don't have a large development team in-house, you'll be relying on the PSP to resolve many of your issues.
Data insights can drive business decisions.
The payment process should be seamless for customers.
The right payment service provider can streamline payments, reduce costs and support your business growth. At Antom, we provide seamless integration with over 100 currencies and hundreds of payment methods, enabling you to reach billions of consumers in 40+ markets.
Our customisable online checkout supports digital wallets, mobile wallets, online banking, cards, over-the-counter (OTC) payments, and national gateways, ensuring you can accept global payment methods effortlessly. Additionally, we offer subscription payments and auto debit features, ideal for merchants with recurring billing needs.
Contact us today to find out how we can support your business.