All your PSPs reconciled in seconds

In the financial ecosystem, banks have been a constant presence; however, now PSPs exist too. These financial entities coexist but operate in different ways. Whilst PSPs focus purely on facilitating electronic payments, banks offer a range of services including loans, mortgages, and insurance along with holding funds within accounts, depositing into them and withdrawing physical cash.

A PSP is different to a PISP in a few ways. Whilst both serve individuals and merchants alike, they do so via different methods. A PSP operates as a middle-man between consumers and financial institutions to facilitate electronic payments. This system requires consumers to authorize the use of their bank account every time they wish to make a transaction.

In contrast, a PISP will gain authorization to automatically initiate payments directly from consumer banks accounts to those of specific merchants. Despite being a subset of PSPs, as a form of open-banking, PISPs therefore produce faster, smoother customer experiences.

The FCA decides which companies can access and use open banking data. Approved organisations are known as third party providers (TPPs), which are designated as either AISPs or PISPs. These categories differentiate how TPPs can use the data they collect from open banking:

AISPs offer account information services (AIS) by gathering read-only financial information. A typical use of an AISP is to allow customers to view their financial positions across various accounts without having to login to multiple financial institutions.

PISPs provide payment initiation services. This means they can not only access and present financial information, but also move money from a user’s bank account.  

Payment service providers enable businesses to accept digital payments from sources such as credit and debit cards, e-wallets and online banking methods.

There are many different payment service providers and some operate in just certain countries. Examples include, PayPal, Stripe, andWorldPay.