How does a PSP work?
The merchant signs a contract with the PSP, which underwrites the business, checks its licences and sets limits, fees and any reserve. The PSP provides an API or hosted page, connects to one or more acquirers and alternative payment method providers, collects the funds from approved payments, deducts its fees and settles the net amount to the merchant on an agreed schedule. Many PSPs also handle refunds, chargebacks and payouts.
Why does PSP choice matter for approval rate and cost?
PSPs differ in which acquirers they use, which merchant categories they accept, which countries they acquire in locally and how much they charge. A higher fee can still produce more net revenue. As an illustrative example on USD 1,000,000 of attempted payments: PSP A charges 3.5% and approves 70%, so USD 700,000 is approved and USD 24,500 paid in fees, leaving USD 675,500. PSP B charges 4.0% and approves 78%, so USD 780,000 is approved and USD 31,200 paid in fees, leaving USD 748,800.
What are the risks of relying on one PSP?
A single PSP is a single point of failure. An outage stops all payments, a policy change on a merchant’s category can end the relationship at short notice, and a new reserve requirement can lock up working capital. Negotiating position is also weaker when there is no alternative route for the traffic.
Where does Omno use it?
Omno connects to many PSPs through one API. PSP eligibility rules define which PSPs may take which traffic, routing rules and cascading choose between the eligible ones, and the routing-decision log records which PSP handled each attempt.