How to choose the right payments provider

Key takeaways

• A payments provider, or payment service provider, handles the technical and regulatory complexity of accepting, processing, and paying out funds, so you can focus on your product and customers.

• The right provider for your business depends on your geographic reach, pricing model, supported payment methods, integration complexity, and compliance needs.

• Airwallex supports 180+ countries, 160+ local payment methods, and 130+ currencies on a single platform, with interbank FX rates that can save up to 80% on conversion costs.

Every time a customer taps "pay" on your website, a lot is happening behind the scenes. Card details get encrypted. Fraud checks run. Banks talk to each other. And if everything goes smoothly, the money lands in your account. The company that makes all that work is your payments provider.

Choosing the right one isn't just a technical decision. It affects how much you pay in fees, how many customers make it through checkout, and whether you can scale internationally without getting buried in compliance headaches.

This guide explains what a payments provider does, how the payment process works, the different types you can choose from, and the key things to look at when you're comparing options.

What is a payments provider?

A payments provider, also called a payment service provider or PSP, is a company that handles the technical and regulatory steps needed to accept electronic payments for your business. Think of it as a translator between your customer's bank and yours. When someone pays on your site, the provider manages the conversation between card networks, banks, and fraud systems, so the money reaches your account without you having to build any of that yourself.

The practical benefit is simple. You don't need to become a payments expert or get your own licences in every market you sell to. Your provider handles authorisation, settlement, compliance, and often foreign exchange, so you can focus on your actual product.

Payments provider vs. payment gateway vs. payment processor

These terms often get used interchangeably, but they mean different parts of the payment flow. Knowing the difference helps you understand what you're buying.

Many modern providers, including Airwallex, are full-stack. That means they handle the whole flow from checkout to settlement. It makes your setup simpler and gives you one partner to work with instead of forcing you to stitch together multiple vendors.

How payment processing works

Before you compare providers, it helps to know what happens when a customer pays. Here's the typical flow:

• Customer initiates payment. They enter card details or choose a payment method like Apple Pay or iDEAL on your checkout page.

• Gateway encrypts the data. Sensitive information gets secured and sent to the payment network.

• Processor routes the request. The transaction goes to the card network, such as Visa or Mastercard, and then to the customer's bank for authorisation.

• Bank approves or declines. The issuing bank checks for sufficient funds, fraud signals, and other risk factors, then sends back a response.

• Settlement happens. If approved, funds move from the customer's bank through the network and eventually into your account, typically within one to three business days, depending on the provider and payment method.

Where your payments provider fits in

A full-stack provider sits across most or all of these steps. They handle the gateway, processing, fraud screening, compliance checks, and settlement. If you're selling internationally, they also manage currency conversion and local payment methods.

Here's a concrete example. A customer in Germany pays €50 on your UK site. Your provider shows the price in euros, processes the card authorisation, screens for fraud, converts the currency at whatever rate you've agreed, and settles the funds into your GBP account. From the customer's point of view, all of that happens in seconds. Behind the scenes, your provider is coordinating multiple systems and institutions.

Types of payments providers

Not all providers work the same way. If you understand the main categories, it's much easier to narrow down which type fits your business model.

• Full-stack PSPs: Handle everything end-to-end: gateway, processing, compliance, FX, and payouts. Best for businesses that want one partner for the whole payment flow.

• Payment gateways: Transmit transaction data only. You'll need a separate merchant account and processor, which adds complexity but gives you more control over each part.

• Payment orchestration platforms: Route transactions across multiple PSPs to optimise for cost, approval rates, or redundancy. Useful for large enterprises with high transaction volumes.

• Merchant of record providers: Act as the seller on your behalf, handling tax, compliance, and chargebacks. Common for SaaS and digital goods businesses selling globally.

Most growing businesses that sell internationally need a full-stack provider that handles payments, FX, and compliance in one place. The fewer vendors you have to manage, the less time you spend on integration and reconciliation.

Choosing by business model

The right provider type depends on how you operate:

• eCommerce businesses: Usually need a full-stack PSP with strong checkout experiences and local payment method support to maximise conversion.

• SaaS platforms: May want embedded payment capabilities or merchant of record services to handle global tax and compliance automatically.

• Marketplaces: Need split payouts and connected accounts to pay sellers whilst taking a platform fee.

• High international volume: Should focus on FX rates and multi-currency settlement. Airwallex, for example, lets you collect in one currency and pay out in another without unnecessary conversions.

What to look for in a payments provider

Once you know what type of provider you need, the next step is comparing specific options. The criteria below cover the things that matter most, from geographic reach to integration complexity. For each one, we've included the key questions to ask any provider on your shortlist.

Geographic coverage and local payment methods

If you're selling internationally, your provider's geographic footprint has a direct impact on your revenue. Can they process payments in the markets where your customers are? Do they support local currencies and payment methods?

This matters more than you might think. A customer in the Netherlands is much more likely to finish a purchase if they can pay with iDEAL instead of typing in card details. In Brazil, Pix dominates. In China, it's Alipay and WeChat Pay. If your provider doesn't support these methods, you're leaving money on the table.

Airwallex supports payments from 180+ countries, 160+ local payment methods, and 130+ currencies, so you can meet customers where they are, regardless of geography.

Questions to ask:

• Which markets do you support, and where can you process local payments?

• What local payment methods are available in my key markets?

• Can customers see pricing in their own currency at checkout?

Pricing and fee transparency

Payment processing costs add up quickly, especially at scale. Most providers charge a per-transaction fee, either a flat rate, such as 2.9% + £0.20, or interchange-plus pricing, which is the actual card network cost plus a fixed markup. Interchange-plus is usually cheaper at higher volumes, but flat-rate pricing is simpler to predict.

The hidden cost to watch is FX. Traditional providers often add a 1–3% markup to the exchange rate on top of the mid-market rate. On £100,000 in monthly cross-border transaction volume, that's £1,000–£3,000 in fees you might not even notice.

Airwallex uses interbank FX rates. Those are the same rates banks use when trading with each other, and they can save up to 80% compared to typical provider markups. We're transparent about what you're paying and why.

Questions to ask:

• What's your FX markup on cross-border transactions?

• Do you offer interchange-plus pricing, and at what volume does it make sense?

• Are there additional fees for payouts, chargebacks, or refunds?

Compliance, licensing, and fund protection

Your provider needs the right licences to move money legally in your target markets. Without them, you'd have to register local entities yourself, which is an expensive and time-consuming process.

Fund protection matters too. How does the provider protect your money between collection and payout? In the UK, Airwallex is licensed by the FCA as an Electronic Money Institution and safeguards customer funds in line with regulatory requirements. Globally, we hold 60+ licences across the markets we operate in.

KYC (Know Your Customer) and AML (Anti-Money Laundering) checks are also part of the picture. Your provider handles these during onboarding, both for you and, if you're a platform, for your customers. A smooth KYC process means less friction and higher conversion.

Questions to ask:

• Do you hold licences in my target markets?

• How are customer funds protected?

• What does your KYC process look like, and how long does onboarding typically take?

Integration and developer experience

Building a payment system from scratch takes months and a dedicated team. The right provider handles the hard parts so your developers can stay focused on your product.

Integration options usually fall into three categories:

• No-code: Pre-built plugins for platforms like Shopify, WooCommerce, and Magento. Fastest to set up, with the least customisation.

• Low-code: Drop-in components and hosted payment pages that you can embed with minimal development work.

• Full API: Complete control over the payment experience, from checkout design to cross-border payment flows.

Airwallex offers all three, plus custom embedded finance solutions for platforms that want to offer payments, cards, or accounts to their own customers. Our programmatic payouts save time on supplier and contractor payments, whilst multi-currency cards give your team spending flexibility without the FX headaches. For simpler use cases, Payment Links let you collect payments by email or message without any integration at all.

Questions to ask:

• What integration options do you offer, and what's the typical timeline for each?

• Do you have a sandbox environment for testing?

• What does your API documentation look like, and what support is available during implementation?

Security and data protection

Security isn't optional. It's table stakes. At minimum, your provider should be PCI DSS certified. This standard has four levels based on transaction volume, with Level 1 being the highest tier for providers processing millions of transactions annually.¹

Beyond PCI, look for SOC 1 and SOC 2 compliance, which cover internal controls and data security, regular penetration testing, and clear policies on data storage and uptime guarantees.

Airwallex is PCI DSS Level 1 certified and SOC 1 and SOC 2 compliant. We carry out ongoing security testing and maintain high uptime across our global infrastructure.

Questions to ask:

• What's your PCI DSS certification level?

• Do you have SOC 1 and SOC 2 compliance?

• What's your guaranteed uptime?

Payout speed and settlement

How quickly do funds reach your account after a transaction? There's often a gap between when a payment appears in your balance and when the money is truly available to use.

Settlement speed depends heavily on the payment rails your provider uses. SWIFT transfers, the traditional method for international payments, can take two to three business days and cost £15–30 in fees. Local payment rails are faster and cheaper, and they often settle same-day or even instantly.

Airwallex routes over 90% of transfers through local rails. Around 95% of our transfers arrive within a few hours or the same day, and roughly 52% are instant. That's a meaningful difference for cash flow.

Questions to ask:

• How long does it take for funds to be available in my account after a transaction?

• Do you use local payment rails, and in which markets?

• What are the fees for payouts to different regions?

Multi-currency treasury and reconciliation

If you're operating internationally, you're probably dealing with multiple currencies. The question is whether your provider makes that easier or harder.

The ideal setup lets you hold balances in multiple currencies and pay out in the currency you need, without converting back and forth unnecessarily. This is called like-for-like settlement. If you collect euros from European customers, you can hold those euros and pay European suppliers directly, skipping the conversion to GBP and back again.

Our Global Accounts let you hold, receive, and pay out in 20+ currencies from a single platform. Combined with our reporting and reconciliation tools, you get a clear view of your money across markets without having to juggle multiple banking relationships.

Questions to ask:

• Can I hold balances in multiple currencies?

• Do you support like-for-like settlement to avoid unnecessary FX conversions?

• What reporting and reconciliation tools are available?

How to compare payments providers

Once you've gathered information from potential providers, you need a way to compare them systematically. The table below sums up the key criteria, what good looks like, and the warning signs to watch for.

The right provider depends on your specific business model, geography, and growth stage. A startup selling mainly in the UK has different needs from a marketplace with sellers across Asia and Europe. Use this framework to weight the criteria that matter most for your situation.

Red flags to watch for

As you compare providers, watch for these warning signs:

• Opaque FX markups: If a provider won't clearly state their exchange rate margin, assume it's high.

• Missing licences: Operating without proper licensing in your target markets creates legal and operational risk.

• No sandbox environment: You should be able to test integrations before going live. Providers that skip this step often have other gaps in developer experience.

• Slow or outsourced support: When something breaks, you need quick access to people who can fix it.

• Lock-in contracts: Long-term commitments with steep exit fees limit your flexibility as your needs change.

Why businesses choose Airwallex as their payments provider

If you're looking for a payments provider that handles international payments, FX, and compliance in one place, Airwallex is built for exactly that. We work with businesses of all sizes, from startups moving into new markets to enterprises managing complex global treasury operations.

Here's what we offer:

• Global reach: Accept payments from 180+ countries, with 160+ local payment methods and 130+ currencies supported.

• Competitive FX: Interbank exchange rates that can save up to 80% compared to typical provider markups.

• Fast settlement: Around 95% of transfers arrive within hours or the same day, with over 90% routed through local rails.

• Flexible integration: From no-code plugins to full API access, plus 350+ partner integrations with tools you already use.

• One platform: Payments, treasury, cards, and spend management in a single place, with no more juggling multiple providers.

See how Airwallex can work for your business. Create a free account or talk to our team.

Frequently asked questions

What is a payments provider?

A payments provider, also called a payment service provider or PSP, is a company that handles the technical and regulatory steps needed to accept and process electronic payments for your business. That includes card processing, fraud checks, compliance, and settlement, so you don't have to build or manage that setup yourself.

What's the difference between a payment gateway and a payments provider?

A payment gateway is one part of the payment process. It encrypts and transmits transaction data between your site and the payment network. A payments provider usually includes a gateway plus processing, compliance, FX conversion, and payouts, all bundled into one service.

How much does a payments provider cost?

Costs vary by provider and pricing model, but most charge a per-transaction fee, usually a percentage plus a fixed amount, along with possible fees for FX conversion, payouts, and chargebacks. Flat-rate pricing is simpler to predict, whilst interchange-plus pricing is often cheaper at higher volumes. Some providers also add FX markups of 1–3% on cross-border transactions, so it's worth asking about rates upfront.

How do I set up a payments provider for my business?

Most modern payments providers offer several integration options, from no-code plugins for platforms like Shopify to full API integrations for custom builds. Setup timelines range from a few hours for pre-built plugins to a few weeks for more complex API integrations. Providers like Airwallex offer sandbox environments so you can test everything before going live.

Sources and references

• https://www.pcisecuritystandards.org/