Also called: PISP
What a PISP is
A Payment Initiation Service Provider starts a payment from an account held at a bank or other payment provider, at the account holder's request and with their consent. The PISP sends the payment instruction. The bank holding the account executes the transfer.
At online checkout, a customer selects a bank payment, chooses their bank, authenticates with the bank and approves the specific payment. The PISP passes the instruction to the bank and returns a payment confirmation to the business. The customer pays from a bank account rather than entering card details.
A PISP initiates a bank payment, but the provider label does not tell you the fee or whether the payment has completed.
How a PISP payment works
A PISP connects to banks through payment APIs, either directly or through an intermediary that connects to multiple banks. This lets a business use one integration to reach participating banks instead of building a separate connection to each one.
The customer approves the payment through their bank's online or mobile banking experience, often using Strong Customer Authentication in markets where those rules apply. Approval is the customer's instruction to the bank, not a card authorization. The bank then transfers the funds through its available payment rail.
What a PISP means for your costs
A bank-account payment does not carry card interchange or card-network assessment fees for that transaction. The payment provider can still charge your business for the service. The PISP label does not establish the fee, who collects it or whether the total cost is lower than your card rate.
The available PISP information does not provide a standard US fee schedule or a specific statement descriptor. Compare the provider's quoted transaction charges and any fixed or monthly fees with your card costs. For example, a lower per-payment charge does not guarantee lower total costs if account fees or payment failures add expense.
How PISPs relate to open banking
Open banking is the broader approach of letting approved services connect with financial accounts through APIs. A PISP is a specific service provider within that model: it initiates payments. An account information provider, by contrast, reads account data for uses such as balance checks and reconciliation, but does not initiate a payment.
The term PISP is closely associated with Europe's PSD2 rules. For a US business, the label alone does not establish which banks a service supports, what rules apply to its US payment flow or whether the provider is authorized for that market. Confirm the supported banks, payment confirmation process and charges before adding it at checkout.
What you can actually change
You cannot set the customer's bank's processing steps, but you can decide whether a bank-payment option fits your checkout and cash-flow needs. Focus on the provider's actual bank coverage, charges and confirmation process.
- Ask which US banks and account types customers can use, and test the payment flow from selection through confirmation.
- Compare the full provider charge per successful payment with your card-processing cost, including monthly or fixed fees.
- Confirm when a payment is treated as completed, how you receive confirmation and how failed or returned payments are reported.
- Test bank coverage. Run a checkout test with the banks and account types your customers use before making bank payment a prominent option.
- Compare total charges. Include transaction, monthly and fixed provider charges when comparing bank payments with card payments.
- Verify payment status. Document the confirmation your team needs before releasing an order or recording an invoice as paid.
Frequently asked questions
What does a PISP do?
A PISP sends a payment instruction from a customer's bank account after the customer gives consent and approves the payment. The bank that holds the account executes the transfer, while the PISP connects the payment request to the bank.
Is a PISP the same as open banking?
No. Open banking is the broader approach of connecting financial accounts through APIs. A PISP is a provider that uses a connection to initiate a payment. Other open banking services read account data without initiating payments.
Does using a PISP lower payment-processing costs?
A bank-account payment does not incur card interchange or card-network assessment fees, but the payment provider can still charge your business. There is no standard PISP fee schedule in the information available here, so compare the provider's full charges with your card costs.