What Is a Technology Service Provider (TSP), and Why Does It Matter?

Peneu Editorial Team · 9 February 2026 · Updated 26 September 2026 · 6 min read

Cover illustration explaining technology service providers in payments

A payment passes through more companies than most people realise. Besides the customer's bank, the merchant's provider and the payment system itself, there are often technology companies in between: building the checkout, running the switch, connecting a biller, or generating the reports. In Indian payments these are commonly called technology service providers, or TSPs.

The defining feature of a TSP is what it doesn't do: it provides technology, but the regulated service (holding money, settling it, issuing an instrument) is provided by a bank or an authorised entity.

What a TSP does, and doesn't

The line is clearest in the rules for particular payment systems. RBI's directions for the Bharat Bill Payment System, for example, describe technology service providers that are certified by the system's operator to provide technology to billers and operating units, with no funds flowing through them.

TSP compared with regulated payment entities
	Technology service provider	Bank or payment aggregator
Provides	Software, infrastructure, integration, operations support	The regulated payment service
Holds customer money	No	Yes, under its regulator's rules
Regulated as	Overseen through its clients' obligations and contracts	Licensed or authorised by RBI
Accountable to the customer for the service	Through the regulated entity	Directly

How TSPs are overseen

A TSP usually isn't licensed as a payment system itself, but it isn't unsupervised either. Banks and payment aggregators remain responsible for services they outsource, and pass obligations down to their technology providers by contract. RBI's 2025 Master Direction on payment aggregators, for example, expects an outsourcing agreement to include a right-to-audit clause so that the aggregator, its appointed agencies and regulators can conduct security audits, or, alternatively, for third parties to submit annual independent security audit reports.

Rules for specific systems add their own requirements, such as certification by the system operator. The effect is that a serious TSP is audited, contracted and monitored by the regulated entities it serves.

Why it matters to a merchant

If you use a TSP, directly or through your provider, you're relying on its systems to be available, secure and correct, while your money is held elsewhere. That changes the questions you ask.

Which regulated entity actually holds and settles my money, and what's its authorisation?
Does any money pass through the TSP's own accounts? (For most TSP roles, it shouldn't.)
Who do I contact about a failed or disputed payment: the TSP or the regulated entity?
What audits or certifications can the TSP evidence, and for which services?
Where is payment data stored and processed? RBI requires payment system data to be stored in India.

Where an orchestration platform fits

A payment orchestration platform is a kind of technology layer: it sits in front of several payment providers and routes payments between them. The providers behind it are the regulated entities. When you evaluate one, including Peneu, the same questions apply, especially who contracts with the providers and where money sits; for Peneu those are set out during onboarding.