What is meant by "payment service provider"?
Payment service providers or payment services are derived from the English term payment service provider (PSP). In this process, the transfer of payments between contractual partners is handled in the e-commerce area. End consumers and suppliers of goods, products or services are usually affected. PayPal, SOFORT and Skrill are well-known examples of PSP.
Why are payment service providers popular?
Payment services are available at any time and have the same advantage as online shops: payments are processed 24/7. In addition, payment processing takes place in real time. In comparison, usually it takes several business days until the bank transfer is made. The sentence "buy today – pay later" describes the payment model, which can be compared to buying on account. In addition, many online payment services offer to link bank accounts. Consumers do not have to use this function. Another reason for payment service providers is that costumers do not require to have costumer accounts. When costumers use online shopping platforms, they do not have to register anymore which is pleasant for the customer, especially when they do not shop there often. Furthermore, the sellers usually bear the transaction fees. All these points have shown the many benefits of payment service providers that attract users. The question remains to what extent the new generation of banks, such as the PSP, can change the payment industry.
How does the new generation of Banks the "Payment Service Provider" change the way we pay?
In stressful times, when you run from one appointment to another, you hardly find time to go into town and do some shopping. Online shopping comes in very handy. Shopping takes place comfortably from home (or on the go) - with one click. In Germany, sales in B2C e-commerce amounted to 59.2 billion euros in 2019, according to these statistics. Compared to sales in 2018, it has increased by around 11 percent. Interestingly, to observe is the turnover of since 2020. The pandemic changed the world and has transformed the way that people shop – and where. The traditional retail sector suffered a severe decline in sales, as strict lockdowns were implemented all over the world. However, digital retailers benefited from the outbreak of the virus. Consumers are now increasingly focusing on online shopping and even deciding to buy food and medicines online. Thus, e-commerce sales are likely to increase.
Why does shopping now tend to take place online?
The large and comprehensive selection of online shops is very attractive for costumers. Before costumers decide to buy a product online, they often like to inform themselves and read costumers reviews. If they are satisfied with what the read, they decide to purchase products – online. Furthermore, many costumers also rely on opening hours to make purchases. Online shopping is therefore attractive as there are no opening hours and purchases can be made throughout the day. This is particular important for people working long hours. Additionally, some niche products survive only on the Internet. In order to ensure a smooth online shopping experience, payment providers need to ensure suitable digital payment options and functions - ePayment will therefore gain importance. Companies are optimistic about new innovations in the future and aim to offer better solutions that guarantee higher customer satisfaction.