A payment initiation service provider (PISP) flow is the end-to-end process where a licensed third-party provider initiates account-to-account payments directly from a customer's bank account through open banking APIs, bypassing traditional payment cards.
How It Works in Practice
- 1Authenticate the customer through strong customer authentication (SCA) using biometrics or two-factor methods
- 2Redirect the customer to their bank's secure authentication interface via open banking APIs
- 3Obtain explicit consent from the customer to initiate the specific payment amount and merchant details
- 4Transmit payment instructions directly to the customer's bank through PSD2-compliant API channels
- 5Route transaction status updates back to the merchant's payment system via webhook callbacks
Common Pitfalls
PSD2 requires explicit consent for each transaction - pre-authorized recurring payments need separate AISP licensing
Refund processing requires separate bank rails since PISP flows are push-only payment instructions
Key Metrics
| Metric | Formula |
|---|---|
| Authentication Success Rate | Successful SCA completions / Total authentication attempts |
| Payment Completion Time | Time from consent to bank confirmation receipt |
| Bank API Uptime | Successful API calls / Total API calls in 24-hour period |
Related Terms
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