What is a Payment Settlement Entity with respect to Form 1099-K?

Last modified 6/23/2020 9:18:05 AM EST

A Payment Settlement Entity (PSE) in  Form 1099-K  refers to an entity that makes payment in settlement of a payment card transaction (credit card, debit card, or other payment card) or third-party network transaction.

There are two types of PSEs:

1. Merchant Acquiring Entity: An organization that has a contractual obligation to make payment to participating payees in the settlement of payment card transactions.
2. Third-Party Settlement Organization: An organization that has the contractual obligation to make payment to participating payees of third-party network transactions.