Third-Party Provider

A third-party provider, in the context of financial services and technology, refers to an entity that offers services or solutions that are integrated with another company’s platform but are not directly part of that primary company. Here’s a more detailed breakdown:

1. Outside the Primary Business: A third-party provider is not the bank, financial institution, or main service provider that the customer originally engages with. Instead, they offer supplemental services or products that can be used in conjunction with the primary service.
2. Integration: These providers’ services can be integrated into the existing platforms of banks or businesses, offering additional features or capabilities. For example, an e-commerce website may integrate a third-party payment gateway to process credit card payments.
3. Independent Services: Third-party providers are often specialized in a specific area, such as payments processing, anti-fraud services, customer relationship management (CRM), data analytics, etc.
4. Regulatory Aspect: In the financial industry, third-party providers must often adhere to various regulations, such as PSD2 in the European Union, which has opened up the financial ecosystem to such entities through Open Banking, allowing them to access bank customers’ financial data (with their consent) to provide a broader range of services.