Q: What is a payment service provider?
A payment service provider refers to a partner that securely processes payments on your behalf but doesn’t take on any financial risk or handle the other complex tasks mentioned above. Assuming this kind of liability requires an immense amount of time and effort and makes it challenging for brands to keep up with ever-changing issues and regulations when selling globally.
Some partners act as the merchant on your behalf but not the seller, so while they have the relationship with financial institutions, your brand is still responsible for remitting local taxes and complying with country-specific laws. Furthermore, these providers may claim they offer local acquiring, but they require you to establish your own local entity in the country. It’s estimated that the time and cost of establishing a local entity can be over 2 years and up to $2M per market.