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What is Payment-as-a-Service, and how is it different from Platform-as-a-Service?

Payment as a Service (PaaS) is a model of payment processing that allows businesses to outsource their payment processing needs to a third-party provider. PaaS providers offer a range of payment processing services, including credit card and online payment processing, fraud detection and prevention, and payment gateway integration.

Platform as a Service (PaaS) is a cloud computing model that allows businesses to develop, run, and manage applications and services without the need to maintain the underlying infrastructure. PaaS providers offer a range of tools and services, including development environments, database management, and application deployment, to help businesses build and manage their applications.

One key difference between PaaS and Payment as a Service is the focus of each model. PaaS is focused on providing a platform for businesses to build and deploy their applications, while Payment as a Service is focused on providing payment processing services to businesses. Payment as a Service is often used in conjunction with PaaS, as many businesses use PaaS platforms to build and deploy their e-commerce or online payment systems, and use Payment as a Service providers to handle the actual payment processing.

Payment as a Service providers offer a range of payment processing services to businesses. Some examples of the services provided by Payment as a Service providers in the US include:

  • Credit card and online payment processing: Payment as a Service providers can handle the processing of credit card and online payments for businesses. This includes securely transmitting payment information from the customer to the payment processor and issuing a receipt to the customer.
  • Fraud detection and prevention: Payment as a Service providers often have advanced fraud detection and prevention systems in place to help protect businesses from fraudulent activity. This can include monitoring for suspicious activity, verifying the identity of customers, and flagging potentially fraudulent transactions.
  • Payment gateway integration: Payment as a Service providers can help businesses integrate their payment systems with a payment gateway, which allows them to accept payments online. This can include integrating with popular payment gateways like PayPal and Stripe.
  • Recurring billing: Some Payment as a Service providers offer recurring billing services, which allow businesses to automatically charge customers on a regular basis (e.g., monthly subscriptions).
  • Invoice generation and payment: Payment as a Service providers can also handle the generation and payment of invoices for businesses. This can include sending invoices to customers, tracking payment status, and issuing reminders for overdue payments.

Some examples of Payment as a Service providers in the US include PayPal, Stripe, and Square. These companies offer a range of payment processing services to businesses, including the ones listed above.

  • Braintree: Braintree is a Payment as a Service provider that offers credit card and online payment processing, as well as recurring billing and payment gateway integration.
  • Adyen: Adyen is a Payment as a Service provider that offers a range of payment processing services, including credit card and online payment processing, fraud detection and prevention, and payment gateway integration. They also offer invoice generation and payment services.
  • Authorize.Net: Authorize.Net is a Payment as a Service provider that offers credit card and online payment processing, as well as recurring billing and payment gateway integration. They also offer fraud detection and prevention services.

These are just a few examples of Payment as a Service providers in the US. There are many other companies that offer similar services, and the specific services offered can vary from provider to provider.

This page was last updated on January 2, 2023.