The managing director of PSI Pay, Phil Davies, recently gave a personal perspective on the differences between American and European payment models. Since the dawn of time when bartering was replaced by the exchange of goods for currency wallets or purses have been used. This was because they offered a convenient method of carrying the currency that you needed to use in exchange for goods or services. As we entered the digital age, the wallet is now transforming from a physical object to more of an electronic concept. While the methods are different, the result is the same.
Phil Davies has described the difference between the American model and the European model of electronic wallets in regards to how his company PSI Pay functions within the financial technology marketplace. In the American model, it is based primarily on the fact that someone wishes to buy goods over the internet. In the American, business involves the trade of one class of goods for the same class of good. There are no elements of stored value. Sales are usually entirely based payment cards which lends to the possibility of chargebacks. In the model used in America when a customer goes to a merchant and decides to pay they are typically presented with various payment options. When one chooses the E-Wallet option it is generally linked to a card. This allows the easy specification of the receiver of funds and the transaction is in coded in an appropriate way, and the funds are then passed through to the end of the sale.
PSI Pay the financial technology company which is the leading payment processor in Europe has a different method of payment processing which Phil Davies has deemed the European model. In this model, there is catering to the various payment cultures across Europe in which only one of the options may be cards. One significant difference in this model is the incorporation of a stored value element which includes a multicurrency capability typically. In this model, the electronic wallet works almost identically to the way a bank account works. The critical difference is that the electronic wallets are not able to offer credit, so an overdraft cannot occur. This also disallows interest to accrue on account balances. While banks are typically guaranteed under European Union deposit protection laws up to a certain amount, the money which is in electronic wallets are safeguarded with no financial limits. With these wallets, funds must be deposited beforehand in order for a customer to conduct any type of transaction. Phil Davies hopes to have his company PSI Pay fit the second model so that they are able to offer a digital wallet with full transparency and accuracy.
Contact PSI Pay: www.companiesintheuk.co.uk/ltd/psi-pay