What is the difference between a PSP and a card network?
A Payment Service Provider (PSP) is a company that allows merchants to accept payments online. PSPs offer various services, including payment processing, fraud prevention, and integration with other business systems. They simplify the payment process by providing a single platform for merchants to manage all their transactions. Examples of PSPs include Stripe, Square, and PayPal. A card network, however, is a system that facilitates the transfer of transaction information and funds between the issuing bank and the acquiring bank. The card network sets the rules and standards for these transactions, ensuring compatibility and security across different banks and payment processors. Examples of card networks are Visa, MasterCard, and American Express. The difference between PSP and card network lies in their roles: PSPs provide merchant services and facilitate payments, while card networks provide the infrastructure and rules for these transactions. PSPs interact directly with merchants, whereas card networks operate behind the scenes to ensure the transaction ecosystem functions smoothly.