August 24, 2016
CNP Expo: PSPs on the Rise
May 21, 2013
Payment service providers (PSPs) have evolved and do the job of accepting a growing amount of online payments for business. PayPal is only the most well-known example. Some 150 PSPs are now in operation, including disruptive players like Square that are capturing a target market of young business people who have been overlooked by traditional financial institutions.
While alternative payments continue to gain a measure of popularity in the U.S., panelists said paying with a credit card is even more popular. Since PSPs like Square or PayPal typically are funded with a credit card, Rey Pasinli, CEO of California ISO Total Apps said Americans could easily begin using PSPs to pay bills like rent with credit cards. Total Apps has embraced the PSP model.
“If you can get the [airline] miles, why wouldn’t you?” said Pasinli.
However, while PSPs were seen as a low-cost alternative to traditional credit-card acceptance via an ISO or merchant services provider, many small businesses are seeing their relationships with PSPs become more expensive, according to John Faherty, product manager for Dublin, Ireland-based OmniPay.
“At what cost is it beneficial to sign up with a payment aggregator?” he asked. “Typically, these are small merchants. Smaller merchants will be more in tune to paying higher fees.”
A growing market for PSPs has been young people who are more comfortable with the increasingly mobile technology now used to support business payments.
“I can easily sign up for a merchant account on my mobile phone or Android,” said Rey Pasinli of Total Apps Inc. “It’s opening up new forms of payment and opening up new merchants to me.”