provider payment methods

A payment service provider (PSP) offers merchants online services for accepting electronic payments by a variety of payment methods including credit card, bank-based payments such as direct debit, bank transfer, and real-time bank transfer based on online banking. Some PSPs provide unique service to processes other next generation methods (E-Payment Providers) including eWallets (PayPal), Cash {Western Union), prepaid cards or vouchers, and even paper or e-check processing.
Typically, a PSP can connect to multiple acquiring banks, card, and payment networks. In many cases the PSP will fully manage these technical connections, relationships with the external network, and bank accounts. This makes the merchant less dependent of financial institutions and establishing these connections directly - especially when operating internationally.
Furthermore, a full service PSP can offer risk management services for card and bank based payments, transaction payment matching, reporting and fund remittance, in addition to multi-currency functionality and services.
A payment is the transfer of wealth from one party (such as a person or company) to another. A payment is usually made in exchange for the provision of goods, services, or both, or to fulfill a legal obligation.
The simplest and oldest form of payment is barter, the exchange of one good or service for another. In the modern world, common means of payment by an individual include money, check, debit, credit, or bank transfer, and in trade such payments are frequently preceded by an invoice or result in a receipt. However, there are no arbitrary limits on the form a payment can take and thus in complex transactions between businesses, payments may take the form of stock or other more complicated arrangements.
In law, the payer is the party making a payment while the payee is the party receiving the payment.
There are two types of payment methods; exchanging and provisioning. Exchanging is to change coin, money and banknote in terms of the price. Provisioning is to transfer money from one account to another. In this method a third party must be involved. Credit card, debit card, money transfers, and recurring cash or ACH disbursements are all electronic payments methods. Electronic payments technologies are magnetic stripe card, smartcard, contactless card and mobile handset. Mobile handset based payments are called mobile payments.
Payments may be classified by the number of parties involved to consummate a transaction. For example, a credit card transaction in the United States requires a minimum of four parties (the purchaser, the seller, the issuing bank, and the acquiring bank). A cash payment requires a minimum of three parties (the seller, the purchaser, and the issuer of the currency). A barter payment requires a minimum of two parties (the purchaser and the sellerThe infrastructure and electronic clearing methods are formed by the payment provider. Global credit card payment providers are Visa and Mastercard. Japan Credit Bureau, JCB is a payment provider for Japanese market. Maestro and Cirrus are international debit card payment providers.
In 2005, an estimated $40 trillion globally passed through some type of payment system. Roughly $12 trillion of that was transacted through various credit cards, mostly the 21,000 member banks of VISA and MasterCard. Processing payments, including the extending of credit, produced close to $500 billion in revenueIn the U.S., debit cards are the fastest growing payment technology. In 2001, debit cards accounted for 9 percent of all purchase transactions, and this is expected to double to 18.82 percent in 2011Historically, checks have been one of the primary means of payment for purchasing goods and services in the U.S. In 2001, checks accounted for 25 percent of the U.S.-based payment mix; in 2006, this is projected at 17 percentFor tax purposes, it is important to determine the timing of actual payment and whether it qualifies as a deduction in a taxpayer's calculation of taxable income.
Cash payments occur at the time of payment. This is the easy case, but payments in other forms can be trickier. Payment also occurs when the taxpayer transfers property or performs services in lieu of making a cash payment.[4] Payment by check is deemed to occur when the check is delivered, as long as the check is honored on presentation by the payee.[4] Postdated checks, however, are not considered payment when delivered.[5] Generally, payment by credit card occurs at the point of the sale and not when the taxpayer is billed by the credit card company or when the taxpayer pays the billCredit is the provision of resources (such as granting a loan) by one party to another party where that second party does not reimburse the first party immediately, thereby generating a debt, and instead arranges either to repay or return those resources (or material(s) of equal value) at a later date. The first party is called a creditor, also known as a lender, while the second party is called a debtor, also known as a borrower.
Any movement of financial capital is normally quite dependent on credit, which in turn is dependent on the reputation or creditworthiness of the entity which takes responsibility for the funds.
The term credit is used similarly in commercial trade, known as "trade credit", to refer to the approval for delayed payments for purchased goods. Sometimes, credit is not granted to a person who has financial instability or difficulty. Companies frequently offer credit to their customers as part of the terms of a purchase agreement. Organizations that offer credit to their customers frequently employ a credit manager.
Credit is denominated by a unit of account. Unlike money (by a strict definition), credit itself cannot act as a unit of account. However, many forms of credit can readily act as a medium of exchange. As such, various forms of credit are frequently referred to as money and are included in estimates of the money supply.
Credit is also traded in the market. The purest form is the credit default swap market, which is essentially a traded market in credit insurance. A credit default swap represents the price at which two parties exchange this risk — the protection "seller" takes the risk of default of the credit in return for a payment, commonly denoted in basis points (one basis point is 1/100 of a percent) of the notional amount to be referenced, while the protection "buyer" pays this premium and in the case of default of the underlying (a loan, bond or other receivable), delivers this receivable to the protection seller and receives from the seller the par amount (that is, is made whole).Wire transfer is a method of transferring money from one entity to another. A wire transfer can be made from one entity's bank account to the other entity's bank account, and by a transfer of cash at a cash officeAlthough the genesis of the idea dates as far back as the giro, the modern wire transfer was a product of the telegraph companies, which made it possible to wire a money order from one office to another. Later, it became possible to wire money between banks, which is essentially the same process as the giro. Therefore, the term giro is still used for it in many other European countries.
Bank wire transfers are often the most expedient method for transferring funds between bank accounts. A bank wire transfer is effected as follows:
The sending bank transmits a message, via a secure system (such as SWIFT or Fedwire), to the receiving bank, requesting that it effect payment according to the instructions given. The message also includes settlement instructions. The actual transfer is not instantaneous: funds may take several hours or even days to move from the sender's account to the receiver's account. Either the banks involved must hold a reciprocal account with each other, or the payment must be sent to a bank with such an account, a correspondent bank, for further benefit to the ultimate recipient. Bank transfer is the most common payment method in Europe[citation needed], with several million transactions processed each day. Debit cards are used extensively to pay in stores, while monthly bills are usually paid with a direct transfer (by cellular phone or Internet, or at the bank or an ATM). In 2002, the European Commission relegated the regulation of the fees that a bank may charge for payments in Euros between European Union member countries down to the domestic level,[1] resulting in very low or no fees for transfers within the Eurozone; wire transfers between this zone and external areas can be expensive.[citation needed]
In the United States, domestic wire transfers are governed by Federal Regulation J[2] and by Article 4A of the Uniform Commercial CodeBank-to-bank wire transfer is considered the safest international payment method. Each account holder must have a proven identity. Chargeback is unlikely, although wires can be recalled. Information contained in wires is transmitted securely through encrypted communications methods. The price of bank wire transfers varies greatly, depending on the bank and its location; in some countries, the fee associated with the service can be costly.
Wire transfers done through cash offices are essentially anonymous and are designed for transfer between persons who trust each other. It is unsafe to send money by wire to an unknown person to collect at a cash office: the receiver of the money may, after collecting it, simply disappear. This scam has been used often, especially in so-called Nigerian letters, also called advance fee fraud or 419 scams.
International transfers involving the United States are subject to monitoring by the Office of Foreign Assets Control (OFAC), which monitors information provided in the text of the wire to ascertain whether money is being transferred to terrorist organizations or countries or entities under sanction by the United States government. If a financial institution suspects that funds are being sent from or to one of these entities, it must block the transfer and freeze the fundsOne of the largest companies that offers wire transfer is Western Union, which allows individuals to transfer or receive money without an account with Western Union or any financial institution.[5] Concern and controversy about Western Union transfers have increased in recent years, because of the increased monitoring of money-laundering transactions, as well as concern about terrorist groups using the service, particularly in the wake of the September 11, 2001 attacks. Although Western Union keeps information about senders and receivers, some transactions can be done essentially anonymously, for the receiver is not always required to show identification