PSP: How to Meet Your New Challenges?

Securing your activity, gaining credibility, and meeting regulatory requirements: the insurer’s role in addressing the new challenges faced by payment service providers.

The payment service provider (PSP) sector is booming, driven by digitalization and financial innovation. However, this relatively recent activity remains highly exposed to multiple and complex risks. PSPs handle financial flows and sensitive personal data daily while carrying out regulated operations, as defined by PSD2 or GDPR.

A single error—whether a delayed payment, incorrect execution of a transaction, or failure to comply with a regulatory obligation—can lead to heavy financial consequences for both the company and its executives, as well as damage the company’s reputation.

“Given these challenges, Professional Liability insurance (PI) and Directors & Officers liability insurance (D&O) are not optional but essential, as the ultimate responsibility lies with the PSP’s management. These protections help address operational risks and the increasing demands of regulators while reassuring your clients and partners,” explains Amel Aouachria, Financial Risks Underwriter – Financial Institutions at Liberty Specialty Markets (LSM).

Aware of the specificities of the PSP sector and as an insurer of financial institutions for over 20 years, LSM has designed tailored insurance solutions that cover both the risks inherent to these activities and the regulatory requirements imposed, notably by the French Prudential Supervision and Resolution Authority (ACPR).

PI coverage protects against damages caused to third parties—whether due to errors, negligence, or professional faults—as well as legal defense costs in the event of disputes or investigations. Complementing this, D&O insurance safeguards PSP executives against claims related to their management.

These customized coverages take into account the diversity of providers—ranging from start-ups and fast-growing fintechs to licensed payment institutions—and adapt to the nature of the services offered: payment initiation, acquiring, issuing payment instruments, and more.

Subscribing to PI and D&O insurance with LSM is far more than just financial coverage; it also strengthens your credibility with banking partners, regulators, and investors, reflecting seriousness and professionalism—two key factors for earning and maintaining trust in a competitive and regulated environment. Moreover, as claims can arise at any time, sometimes even without proven fault, anticipation is crucial.

LSM supports you at every step with expert knowledge and tailored solutions, allowing you to focus confidently on developing your business.