Using Multiple PSPs and Owning the Data: The Best of Both Worlds

Business plans are built around having a unique offer and exceptional products and services that create an enduring brand. The minutiae of payment gateways, PCI DSS compliance, and the burden of processing fees are deep in the weeds.

But as a merchant grows, the challenges of a single provider start to come into focus. Business continuity, undifferentiated fee schedules, and security challenges rapidly become topics of strategic and operational meetings, and most conversations end in the realization: we need to diversify processor relationships.

The catch is that a multi-payment service provider (PSP) strategy only works if the merchant, not the PSP, controls the stored card data.

When does a merchant start to outgrow a single processor? 

There are a number of moments when a merchant will realize their single PSP strategy has outlived its usefulness:

• The PSP shuts the account down: the PSP decides that the business doesn’t meet its risk profile, collects too many chargebacks, or sells products that are high-risk. When an account is closed, the PSP may choose to hold funds for an extended period, in case of subsequent refund requests.
• The PSP suffers an outage: no business wants to find itself unable to transact, and finding that customers can’t buy because the payment provider is unavailable comes as an abrupt brake on growth. Customers blame the merchant, not downstream providers for an outage.
• The merchant expands geographically: not every PSP can provide service everywhere, and before a merchant starts to do business in a new country it often finds it needs payment methods that aren’t available through the single partner, or that the PSP prefers not to do business in the market.
• Processing fees become an impediment to growth: while the full-service PSP fees are simple to understand and plan for, they are not by any stretch of the imagination inexpensive. Merchants discover that they could reduce their cost structure by dividing their transactions among different providers. Every penny saved on processing fees goes straight to the bottom line. No CFO has ever advocated for paying more in fees in favor of operational simplicity.
• Customer data management becomes problematic: the work to document and trace security procedures grows as a merchant expands. Relying on a single partner means trusting them with every aspect of customer data storage and protection. It also means letting that partner have control over any stored information, preventing the merchant from choosing to, for instance, redirect transactions elsewhere in the event of an outage.

Nobody would say that a full-service PSP is a bad choice when getting a business off the ground. But few significant operators would return to that setup once they’ve moved to a multi-PSP strategy, because they value too highly the flexibility, control, and, perhaps most importantly, cost management they get by working with multiple partners.

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What are the reasons a merchant chooses multiple PSPs? 

While few, if any, merchants make significant decisions based solely on a single business driver, the reality is that two rationales push them to move from a single to multiple PSPs:

• Business control & continuity: every business needs to know that it can always conduct business with willing customers, and that it has ownership over, and control of, its customer data. A single outage, or even a CDN brownout, can cost a business hours of transactions, at which point, ensuring there is a backup opportunity becomes critical.
• Revenue optimization: every business wants to optimize its financial model, and the reality is that using a single PSP eliminates the possibility of tuning the processing fee line item on the books. Getting better prices for, for instance, stablecoin transactions, debit cards over credit cards, or cross-border sales can have a material impact on the Profit and Loss statement at the end of the month.

As with most changes, the shift from single to multiple PSPs happens slowly, then all at once: companies will analyze and assess the options over time until they realize they have no rational option but to make the move.

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Already using multiple PSPs? Don’t miss this setup. 

Adding a second or third PSP doesn’t make a merchant multi-PSP on its own. If each provider stores its own copy of a customer’s card, the merchant has several separate payment relationships, each with its own lock-in.

Three gaps show up in most of these setups.

Are stored cards stuck with the PSP that collected them?

When a PSP vaults a card, it returns a token that works only with that PSP. A returning customer whose card was saved at one provider can be charged only through that provider. Routing and failover work for new cards, but not for the stored cards behind repeat purchases and subscription revenue.

During an outage, those customers can’t be rerouted at all.

Moving the cards to another provider means requesting an export or migration. It’s rarely quick (or a priority for a provider that’s about to lose the volume).

The fix is to vault each card once, in a vault the merchant controls, and send a token to whichever PSP should handle each transaction.

Are you paying for the same card more than once?

Account updater and network token services keep stored cards current when banks reissue them. Each PSP charges for these services separately, so a card stored at three providers can be updated, and billed, three times.

These fees often sit inside broader “value-added services” line items, so many payment teams can’t confidently say what they’re paying for each of them.

The copies also drift out of sync. A card refreshed at one PSP can still be expired at another, and that shows up as avoidable declines when a transaction gets routed there.

Centralizing lifecycle management in the vault means each card is updated once and every PSP receives the current version.

Does your PSP know you can leave?

Portable card data pays off even if a merchant never switches providers. At contract renewal, a PSP that holds all of a merchant’s stored cards knows the merchant’s options are limited, and it prices accordingly.

A merchant whose cards sit in an independent vault can credibly move volume elsewhere, which changes the negotiation even if most transactions stay where they are.

For merchants already running multiple PSPs, the useful question is whether their setup delivers the flexibility they’re paying for. If stored cards are still maintained by individual providers, the answer is probably no.

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How do you use multiple PSPs without expanding PCI scope? 

While a merchant may feel trapped and overcharged by a single PSP, they do at least have the confidence that there is one provider to work with on everything. Importantly, only one provider needs the security protocols in place to collect, store, and manage customer cardholder data.

Once the decision is made to move to a broader stable of PSP partners, merchants must come up with a plan for customer data management, which can be daunting.

Often, merchants ask how to reasonably build secure, PCI DSS-friendly payment infrastructure, while also protecting customer data. If there’s one hurdle to moving into a world of multiple PSPs, it’s finding the right path to managing the data.

The answer is often a programmable payment vault to collect the data, store it securely, and give the merchant a token to submit transactions to any PSP.

Much like with the full-service PSP, sensitive data stays out of your core payment systems, protecting you against hacking and data leaks. However, unlike a full-service PSP, you own the customer data, and can direct any transaction to any endpoint you prefer, even being able to reroute when a provider suffers an outage.

Once merchants see how quickly and robustly they can add a data vault into their systems the decision is easy: Anton Payments, for instance, completed in three days what they assumed would take at least 18 months.

In short order, merchants can get all that data into a secure vault, deliver transactions to their preferred PSPs, then get down to the business of finding the right payment partners to deliver smooth service, at prices they can manage and control over time.

With the vault in place, no relationship with a PSP is gated by the provider holding the customer data: the data belongs to the merchant, and negotiations are based on value, not lock-in.

If your saved cards are split across PSPs, routing and failover only cover part of your volume. Owning your card data starts with getting it out of your PSP. Learn how payment data portability works, from the PSP’s encrypted export to moving cards in waves while your current processor stays live as a fallback.

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