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A payment service provider (PSP) sits between a merchant and their customers, moves money, and handles the complexity of getting a transaction from A to B. It seems simple enough on the surface.
What nobody talks about is what it actually takes to keep one running.
James Fry has spent over 10 years at Worldpay, now part of Global Payments, a combined business processing $3.7 trillion in payment volume annually across more than 175 countries. In Part 1 of our conversation, he explored how merchant expectations of payments have fundamentally changed. Here, he goes further, pulling back the curtain on what it really takes to build and run payments infrastructure at global scale.
What a PSP really is
The term "payment service provider" gets used loosely. Ask James and he'll take you back to where it all started.
"I, as a merchant, have a consumer who needs to take a transaction from their card and they need to get a message to their issuer. How do I get that message to the issuer?" That was the original problem PSPs solved. But as James sees it, that definition hasn't held up.
Today, a PSP is expected to support multiple payment methods, fraud tools, authentication, routing logic, tokenization, FX, and payouts, while shielding merchants from the constant stream of changes that come down from networks every year.
Worldpay illustrates how far that evolution has gone. "If you really look at Worldpay, it handles acceptance of payments, then optimization of your payments, whether that's fraud or authentication. You've also got value-add services like payouts and FX, which truly turn a cost center into a profit center."
Most people would call Worldpay an acquirer. While James thinks that's fair, it's a lot more than that.
The cost of keeping the lights on
Most merchants never see what it takes to keep a PSP compliant and operational. James is direct about the scale of it.
"You can have hundreds of changes on an annual basis," he says, referring to the updates pushed down every year by card networks alone.
New fields, new formats, pricing updates, and token mandates are just a few of those he mentions. And that's before factoring in alternative payment method providers updating their integration requirements, and regulators introducing new compliance obligations around data localization.
In product and engineering teams, James says there’s a name for this work. "We call it KTLO, or keep the lights on. What are the things you have to do to continue doing what you do?"
It's non-negotiable, largely invisible to merchants, and it competes directly with everything else a PSP is trying to build. Development capacity is always split between compliance, mandatory external changes, and the discretionary work merchants actually ask for. It's work that never makes it onto a press release, but without it, nothing else functions.
Why no single PSP can serve all of a merchant's needs
The payment stack that works at startup scale looks nothing like what's needed when you're processing billions. Reliability at enterprise scale means redundancy across acquirers, market-specific providers, and the flexibility to route traffic based on performance, cost, and geography.
James sees this constantly with Worldpay's largest customers. Most enterprises run at least two acquirers in their core markets. Where a global provider can’t reach, a local player fills the gap.
What's striking is how openly James acknowledges this reality, even from where he sits.
"There has to be a level of agnosticism, even when you come to a large incumbent player that's an acquirer."
For Worldpay, that means building infrastructure around merchant choice rather than provider preference. "We are open to being flexible around that because that's ultimately what our customers need."
Where does this leave merchants
Building and running payments infrastructure is harder than it looks from the outside. The providers who understand this have spent years building systems flexible enough to absorb that complexity on their merchants' behalf. The businesses scaling effectively are the ones who've recognized that payments is not something to navigate alone.
We covered all of this and more in the latest episode of Payments Unfiltered. Listen to the full conversation on YouTube, Spotify, and Apple Podcasts.
