Full Form of PSP

What is PSP?

A Payment Service Provider (PSP) is a third-party entity that enables merchants to accept and process online payments from customers. PSPs act as intermediaries between the merchant's bank and the customer's bank, handling transaction authorization, settlement, and often fraud detection. In India, PSPs have gained immense significance with the rapid adoption of digital payments following demonetisation and the rise of UPI. Companies like Paytm, PhonePay, Razorpay, and Google Pay function as PSPs, offering services such as payment gateway integration, recurring billing, and multi-currency support. The Reserve Bank of India (RBI) regulates PSPs under the Payment and Settlement Systems Act, 2007, requiring them to obtain authorisation and adhere to strict data security norms. PSPs are widely used by e-commerce platforms, bill payment sites, and small businesses to streamline online transactions. For students preparing for banking and regulatory exams like RBI Grade B, NABARD, and SEBI, understanding the role of PSPs in the digital payments ecosystem is essential, as questions frequently appear on payment system participants, regulatory framework, and interoperability guidelines. The growth of PSPs has also contributed to financial inclusion by enabling even small merchants to accept digital payments easily.

PSP का फुल फॉर्म

Example

The new RBI circular requires all Payment Service Providers (PSPs) to implement an additional factor of authentication for transactions above ₹5,000.

PSP — frequently asked questions

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