What Is a PISP?

PISP stands for Payment Initiation Service Provider. PISPs allow payments to be initiated directly from a customer’s bank account instead of using a credit or debit card.

Businesses using PISP services can use those of a branded third party provider, use a white label service, or even become a PISP themselves in some cases.

PISP and open banking solutions are increasingly popular, with previously complex manual banking tasks being carried out instantly and accurately using integrated PISP APIs.

Examples of PISP

PISPs are a new concept, introduced by the European Payment Services Directive 2. According to the FCA, there are now 64 Payment Institutes that are licenced with PISP permissions, including companies like Nuapay. Most products / brands, by the nature of their recent inception, will be unfamiliar to consumers.

What is PSD2?

PSD2, the second Payment Services Directive, is a new European regulation for electronic payment services. It is designed to increase banking security and innovation, to bring more competition into payment services. The innovations spawned by PSD2 also highlight the increasing popularity and importance of APIs in financial services.

What are the Business Benefits of Using a PISP?

Employing a PISP for your business is a simple and secure way to take payments from customers via bank transfer, either as an alternative to card payments, or a way of automating and streamlining existing bank transfers.  Equally, if you are an ISV, a PISP can help you to automate outbound payments for your clients, such as supplier payments.

PISPs offer a range of benefits to both the customer and the business receiving payments.

Streamlined PISP Payer Experience

With recent advancements in mobile payment technology, PISPs can help you deliver a streamlined experience for payers.  A typical payer experience is to authenticate a transaction on a mobile device, using biometric log-on like you would with your normal banking App.  This can be if customers are checking out on your mobile, or equally if they are checking out on web by using decoupled authentication methods.

By offering customers a payment initiation service, you are giving them a fast, simple and secure way to pay. This may help your business gain more customers, more transactions, and stand out from the competition when it comes to payment processes and user experience.

PISP Security

PISPs drastically reduce the likelihood of payment fraud as the bank transfers are only initiated after a payer has authenticated the transaction using Strong Customer Authentication (SCA).  Equally, with the PISP model, payers never pass their credentials to the merchant or payment gateway, but only enter them directly with their bank.  This reduces the risk to both consumers (fraud down the track) and merchants (from data breaches), helping to in-still trust in customers and potential new customers that their details are safe and secure when they make purchases.

PISP Cost Efficiency

Using a PISP means money is collected and set in real time, meaning you can see up to date payment finances 24/7.  As soon as the payer has completed the payment initiation journey, the bank sends the bank transfer to the merchant.  Our data suggests the vast majority of the PISP payments arrive in the merchant’s account in less than 10 seconds.

The added beauty of accepting payments via a PISP service is that, just like bank transfers, there is limited ability for payers to revoke payments or claim a chargeback.  This means that when a payment is made the money in the merchant’s account is cleared and available to the merchant to use immediately for their cash flow needs, without any need for acquirers or other payment providers to “hold back” funds.

PISPs typically offer a more competitive and transparent fee structure than traditional banking services. Card fees are often complex, with varied fee structures depending on the type of card, and additional charges in the event of fraud or chargebacks.  PISPs offer an attractive alternative, with lower processing fees for transactions, and elimination of all the additional costs of failed payments.

PISP Simplicity

Nuapay is at the heart of innovation with Open Banking payments, and combining its Open Banking products with its traditional Direct Debit services as well as our pay-out products.

For example, with Nuapay customers can sign a Direct Debit Instruction using our Open Banking or Payment Initiation Service.  This enables Direct Debits to be set up seamlessly on a mobile device for collection of subscription payments for any industry from telecoms and utility bill payment to fitness clubs monthly membership fees.

Nuapay offers businesses a way to make refund payments in an instant too.  These can be initiated as a reversal of the initial payment, sending a refund via bank transfer straight back to the original payer.  This service can be used to delight your customers with instant refunds, where they no longer need to worry about pending payments.

The simplicity and efficiency of the user experience means businesses using PISPs may stand out against the competition when it comes to payment services.

PISP Flexibility

If you are growing a business you need a payment solution that can grow with you.  Nuapay PISP can offer a level of flexibility which goes above and beyond that provided by more traditional banking methods. Our payment initiation capabilities are modular in format, meaning that as your priorities and business needs change, our services can be adapted to suit, regardless of the size of your business.

All Nuapay functionality can be accessed via the API, allowing full integration and payment automation of your services to customers, a major factor in delivering efficient processes.

Some PISP services such as Nuapay offer banking and payment legacy services, meaning you can move from traditional banking with minimal fuss, and immediately take advantage of the benefits offered by PISP solutions.

In summary, employing a PISP to take payment offers a range of benefits over more traditional payment methods, and make taking payment faster, more secure, and more cost efficient than ever before.

Speak to our experts about how PISP can help you offer secure, efficient payment solutions to your clients, for a low fee and complete peace of mind.

Nuapay is the industry’s leading provider of Account-2-Account payment solutions. Building upon the trust, scale, and experience of our parent company Sentenial – who securely process over €42bn every year as an outsourcing provider to many of the world’s leading banks – we work tirelessly to reinvent what’s possible from open banking and PISP payment solutions.

Today, we offer partners all around Europe the world a fully comprehensive, integrated payment solution that removes all traditional banking inefficiencies and unnecessary costs, saving you time, money and resources at every turn. This is banking as it should be.