What is PSP in crypto?
A payment service provider (PSP) in crypto is a company that helps businesses accept payments in digital assets. It works as a bridge between the sender and the receiver and routes the transaction, confirms it on-chain, and moves the funds to the merchant.
Crypto PSPs are used by merchants who want to receive digital currencies like XRP, ETH, or stablecoins.
In many cases, a PSP offers technical tools such as APIs or plugins. These tools help integrate crypto payments into online stores, apps, or PoS terminals.
What are the services PSPs can offer?
Crypto PSPs usually offer a range of services to support business payments:
- A crypto payment gateway connects a merchant’s checkout or point-of-sale system to blockchains. It generates payment details, confirms payment status on the blockchain, and routes funds to the correct wallet. Can include automatic conversion to other assets.
- A business wallet, which can be custodial or non-custodial, is used for storing and managing company funds. It often includes multi-signature access, approval limits, and activity tracking.
- OTC desks are designed to handle large crypto trades with direct settlement. They can help businesses convert significant amounts without affecting market prices.
- A hot wallet is an online wallet for daily transactions. It holds only the funds needed for active payments and is safeguarded using the PSP’s security protocols.
- Cold storage is the offline wallet for reserves and settlement balances not in use. It provides higher protection against online threats.
What are the functions of PSP?
A crypto payment service provider supports the full payment flow. Here’s the list of the functions:
- Accepts digital assets such as BTC, ETH, USDT, and others
- Verifies and confirms transactions using blockchain networks
- Converts crypto to fiat when required by the business
- Sends processed funds to the business wallet or account
- Offers technical tools such as APIs, invoicing modules, and reporting systems
Crypto PSPs make it possible for merchants to add crypto payments to their checkout process. They allow businesses to access a growing network of crypto-native users while maintaining compliance and operational reliability.
Summary
PSP stands for the payment service provider and connects merchants and customers for crypto payments.
- They support multiple currencies, including Bitcoin, Ethereum, XRP, and stablecoins.
- Main services of PSPs usually include payment gateways, wallets, OTC desks, hot wallets, and cold storage.
- They provide tools for integration, transaction tracking, and settlement.
- PSPs help businesses manage the full payment process with integrated tools and standardized workflows.
Disclaimer: Crypto payments involve financial risk and may be subject to regulatory restrictions in your jurisdiction. Please ensure compliance with applicable laws before using such services.