Payment Service Provider (PSP) bank

Mon, 11 May 2026 00:00:00 +0000

In the Unified Payments Interface (UPI) scheme operated by the National Payments Corporation of India (NPCI), a Payment Service Provider bank (commonly abbreviated PSP bank or simply PSP) is the licensed bank that authenticates a UPI payer, holds the account-linking record for the payer’s Virtual Payment Address (VPA), routes the payer’s transaction instructions to the NPCI switch, and bears regulatory liability for the payer-side of each transaction.

The PSP bank is the entity through which a payer’s bank account is registered on UPI. In the four-party model that underlies every UPI transaction, the PSP bank sits between the payer and the NPCI switch: it performs the cryptographic PIN verification, applies fraud controls, and submits a debit instruction to the payer’s actual account-holding bank (which may or may not be the same entity as the PSP bank).

Payment Service Provider on WebNotes

Payment Service Provider (PSP) bank