What is a payment provider?
You make sure your customers can pay online or at the checkout in your store. But who actually makes sure that money reaches you safely with card payments and online payments? That is the payment provider. In this article, you will learn what a payment provider does, why you shouldn't just partner with anyone, what it costs and how to choose the right one.
What is a payment provider?
A payment provider, also called a payment service provider (PSP), is a company that processes payments between your customer and your business. For example, your customer pays with iDEAL, a credit card or another method. The payment provider makes sure that money reaches you safely and quickly.
A payment provider is not the same as a payment method. iDEAL, Mastercard and PayPal, for example, are payment methods: ways your customer pays. The payment provider is the party that connects, processes and secures all those methods for you through one technical integration, one contract and one point of contact.
Which payment providers are there?
There are various payment providers in the Netherlands and Belgium, from small specialized players to broad providers such as Buckaroo. They differ in rates, supported payment methods, in-house acquiring (direct processing without an intermediary) and the level of personal support. For some, price matters most; for others, a Dutch helpdesk or a wide choice of payment methods is what counts.
Why do you need a certified payment provider?
Processing payments is not a casual service. It is a strictly regulated activity. A payment provider in the Netherlands that receives and forwards money from your customers needs a license as a payment institution and is supervised by De Nederlandsche Bank (DNB), the Dutch central bank.
This licensing requirement exists for good reason. It protects you and your customers against misuse, fraud and the risk of money getting lost between payment and payout. Want to check for yourself whether a party is actually registered? You can do so in the DNB public register of payment institutions.
Curious what a certified payment provider can do for your business?
How does a payment provider work?
In short: your customer pays, the payment provider processes and checks the transaction, and the money lands in your account (usually daily). In practice, this takes a few steps:
- Your customer chooses a payment method and completes the payment.
- The payment provider processes and secures the transaction, and checks whether the payment meets the right conditions.
- The amount, minus fees, is paid out to your business.
- You see everything clearly in one dashboard, regardless of which payment method your customer used.
What does a payment provider cost?
Most payment providers charge a combination of transaction fees (a fixed amount or percentage per payment) and sometimes a fixed monthly fee. There are also providers where you pay a percentage of your revenue to cover all your transaction fees. In many cases, these are not the most affordable options. Exactly how much you pay depends on the payment methods you offer and your transaction volume. You also need to factor in the cost of a payment terminal if you use one. These costs vary by device and by whether you rent, lease or buy it. You can find all Buckaroo rates on our pricing page.
How do you choose the right payment provider?
When choosing a payment provider, pay attention to the following:
- License and supervision. Check the DNB register before you sign a contract.
- Rates. Calculate the transaction fees based on your expected volume, not just the monthly fee.
- Payment methods. Choose a payment provider that offers the payment methods your customers actually use. Customers from other countries, for example, often pay with different methods than Dutch customers.
- Payout speed. How quickly does the money actually reach your account?
- Support. Do you get personal help when something goes wrong, from people who understand your language well?
Ready to get started?
Handle your payments with a certified Dutch payment provider. Create a free online account today and see for yourself how easy it is.
Frequently asked questions
What is the difference between a payment provider and a payment method?
A payment method (such as iDEAL or Mastercard) is the way your customer pays. A payment provider is the party that connects, processes and secures all those payment methods for you.
What does a payment provider cost on average?
Most payment providers charge transaction fees per payment, sometimes combined with a fixed monthly fee. The exact costs depend on your payment methods and transaction volume. Check out the Buckaroo rates.
How do I know if a payment provider has a license?
Every payment institution permitted to operate in the Netherlands is registered in the public register of De Nederlandsche Bank. There, you can check for yourself whether a party is actually under supervision.
Can I use multiple payment providers at the same time?
Yes, you can, although most merchants choose one payment provider to keep costs, contracts and dashboards manageable.
Is a payment provider the same as a bank?
No. A bank holds accounts and has a banking license; a payment provider focuses specifically on processing transactions between customer and merchant, often in cooperation with banks and card networks.
