Third Party Payment Processors

Are you aware of the three types of third party payment processors? They are a payment service provider (PSP), a payment facilitator and a payment aggregator. Now, let’s describe the differences between them.

A payment service provider is an institution that provides merchants with individual merchant accounts and assists them with underwriting and transaction processing, but it does not fund merchants directly. This is done by the acquirer. A payment facilitator as well as a PSP provides merchants with separate MIDs but the only difference is that it funds merchants directly. A payment aggregator has a lot of small merchants in its portfolio and uses a single MID to process payment for all of them. The diagram below explains how payments are processed in every specific case.

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Third Party Payment Processors