If you are part of the 80% of Australians or 51% of Kiwi's who shop, gamble, trade-in currency, or have paid for services or subscriptions online in 2020, chances are you've used a PSP. These clever bits of software integrated into the backend of websites and apps are designed to make our lives considerably easier. But what exactly are they, what are the benefits, and which industries use them the most? Let's read on to find out.
What are PSPs?
A payment service provider is a bit of technology that provides eCommerce, trading platforms, and online casinos with a way that users can make payments online. These PSPs can facilitate a range of different methods including credit and debit cards, bank transfer, wire transfer, real-time transfers, and cryptocurrency, and virtual asset transfers. These programs are typically built into the website, or app that you are using and require sign-up and authentication to function. Some of Australia's most popular eCommerce sites like BigW, Officeworks, Harvey Norman, and JB Hi-Fi all use a form of PSP within their platforms.
The fundamental concept of a PSP is that they act as an intermediary between the service provider, the client, and a range of different payment methods in various forms, currencies, and formats. Fees are usually leveraged on the transactions either as a percentage of the total value, or a fixed amount. These are picked up by the service provider, the client, or both.
Benefits of PSPs
Integrating a PSP into a website means that customers can enjoy a wide range of payment options. Today, there are many different ways people want to pay including different currencies and types of currency. It's no longer just cards and transfers, consumers want choice and will flock to sites that offer it.
Another benefit of PSPs apart from convenience is the higher level of security that they provide, including risk management, fraud prevention, and in some cases, insurance. Cybercrime is on the rise in Australia, with around half of the population at risk, and in New Zealand, the figure is even higher. Therefore, solutions that provide protection are becoming increasingly welcomed. Furthermore, these transactions are often quicker than conventional methods and suit the fast-paced nature of online commerce and payments.
Another key benefit is that PSPs require significantly less effort from the user as most of the process is saved and automated.
Industries where PSPs are key
The use of PSPs is increasing across multiple sectors but there are some areas where their integration is a necessity, not a preference.
For example, the online casino sector is one where clients demand a range of payment choices as well as security, speed, and reliability. An example is a way that clients in New Zealand pay safely online using paysafe. Integrated into some of the most well-respected online gambling sites available, it makes it much easier for players to make deposits, get paid, and take advantage of promotions such as free spins and bonuses. PSPs of this kind make online gambling much more streamlined for users where it's necessary to make quick payments around the clock.
Other industries where the use and integration of a PSP are key include eCommerce, cryptocurrency and forex trading, and advertising platforms including social media and Google. Cryptocurrency is gaining traction in popularity throughout the region as Aussies and Kiwi's look for ways to diversify their currency and asset portfolios.
The Future of PSPs
The technology employed by PSPs is increasing rapidly. In the future, we can expect to see greater integration including increased use of biometric authentication throughout Australia and New Zealand. Conventional cards are likely to become obsolete and instead be replaced with eAccounts, eWallets, and ePayment accounts.
Additionally, cryptocurrencies and virtual assets will become more widely supported and could even take over fiat transactions due to their ability to execute micropayments and similar.
If you run any kind of online shop or service provider in the Australasian area and don't offer PSP integration, the time is now to consider upgrading your offerings for the benefit of your clients.
(Photo credit: Pexels).