The modern financial system is constantly evolving and offers its clients more and more opportunities to pay for services and goods.
The Orthodox of the financial system, represented by traditional banks, tend to put forward a lot of requirements and conditions for their customers, which often negatively affects the timing and quality of payments and money transfers.
Based on this, a number of alternatives have appeared on the market, the main of which are payment systems. With the development of online commerce on the Internet, their presence in our life has become indispensable.
So what is a payment system and what is its fundamental difference from traditional financial institutions?
First of all, a payment system is a type of company, a legal entity that has a certain license to provide financial services. The main task of the payment system is the ability to programmatically ensure the passage of online payments over the Internet. If you or your company are planning to provide services all over the world, then opening an account in a payment system will be the perfect solution for you.
The main function of the payment system is financial intermediation in the execution of customer payments. In fact, it is a resource for the movement of funds that do not belong to the payment system itself.
An important advantage of payment systems is their speed of operation and seller-buyer interaction. Bank transfers can usually be carried out within a working day, and in some cases — 3-4 days or more. In turn, payment systems use modern technologies that enable them to conduct instant transactions.
The main types of payment systems
The division of payment systems into subspecies is quite arbitrary. Based on financial instruments, they can be divided into:
— functioning through the use of smart cards. A separate account is opened for each card, and the cardholder, in turn, can conduct transactions online (pay for purchases, transfer from account to account, etc.);
— virtual payment systems that work exclusively with electronic money. This type of payment is especially popular among users who work in the online field, as well as among customers of online stores working through accounts with national or foreign banks.
If we take the role of the subject of financial transactions as the separation criterion, then payment systems are divided into:
The simplest classification is the territorial division into national and international payment systems. Examples of international systems operating around the world are Visa and Mastercard. National payment systems are created within a single country to control and secure national payments.
EMI and PSP
The terms EMI and PSP are often used in the field of payment systems and in their essence are organizational forms of payment systems with their own functional capabilities.
EMI (Electronic Money Institution) is a licensed legal entity that has the right and ability to issue electronic money and make payments and transactions related to electronic money.
Payment Service Providers (PSP) are special licensed payment companies that are participants in the financial market and operate on the basis of the regulations on payment services and electronic money. These legal entities have a regulated right to make payments in accordance with their registration and license.
Unlike banking institutions, the process of opening an account in a payment system is faster, more profitable and easier than in a regular bank. Nikol Consulting Group’s lawyers have extensive experience in opening accounts in payment systems around the world. Our experts will help you choose the most optimal payment system based on your goals.
By contacting the specialists of the Nikol Consulting Group for help, you will receive quality services at optimal prices!