What is required for a successful fund transfer between two payment service providers (PSPs)?

In the context of fund transfers between payment service providers (PSPs), adequate liquidity in the accounts is essential for a smooth transaction. Liquidity refers to the availability of sufficient funds in the accounts held by the PSPs involved in the transfer. If one or both PSPs do not have enough liquid assets to complete the transfer, the transaction will not be successful. This is critical because it ensures that the sending PSP can deduct the required amount from its account while the receiving PSP can credit that amount to the recipient's account seamlessly.

Having a shared banking app, authorization from the government, or a contract with the payment network, while they can influence and facilitate the processing of transactions, do not directly ensure that the actual funds required for a transfer are available. Without adequate liquidity, even if all other conditions are met, the transfer would fail because the necessary funds are simply not present to complete the operation.