Credential Store Provider encapsulates logic required to retrieve credential from specific type of store. There are few providers available out of box, and you can define custom implementations using either Java class or Groovy script. Provider will define properties necessary to connect to credential store as well inputs necessary for each credential.
Here are out of box credential store providers. You can view this screen by clicking on Providers button on Credentials page (Administration - Security - Credentials)
Local credential store retrieves credentials from FlexDeploy database, credentials are encrypted in FlexDeploy database. You can view details on other credential store providers on Credential Store page. Credential Store Providers screen allows you to view details on out of box providers as well, but you are not allowed to change out of box credential store providers. You can create additional credential store providers as necessary.
What is involved in defining credential store provider?