CATEGORY - PAYMENTS

What is a Payment Aggregator? How It Works, Types & Features

Payments - 8 Nov, 2024

Table of Contents

Secure online payments are key for businesses today. Payment aggregators act like mid-partners, simplifying online transactions for both companies (smooth checkout) and customers (secure data handling). This builds trust, which is vital for customer relationships in the digital age.

What are Payment Aggregators?

Payment aggregators are like financial liaisons for online businesses. They simplify accepting payments by handling everything in one platform. This allows businesses to accept a variety of options from customers, including

Debit cards
Credit cards
Cardless EMIs
UPI (Unified Payments Interface)
Bank transfers
BNPL
E-wallets
E-mandates

Payment aggregators simplify payouts for your entire network, streamlining payments to vendors, SMEs, freelancers, and other business partners alongside customers.

How Do Payment Aggregators Work?

Payment aggregators simplify online payments for businesses. They handle everything, so businesses don’t need to have multiple accounts with different banks. Here’s the step to follows

Faster Integration: No complex integration headache. Sign up with a payment aggregator, create a merchant account, and you’re ready to accept payments!
Wider Customer Reach: It creates opportunities for customers to make payments in different ways (by credit card, Debit card, BNPL, EMIs, internet banking, eWallet, or UPI). This caters to various customer preferences and increases your chances of a sale.
Seamless Security: Leave the secure processing to the experts. The aggregator handles everything from encrypting customer information to transferring funds securely, giving you peace of mind.

Why Merchants Require Payment Aggregators

Imagine juggling individual connections with every bank and payment provider to accept credit cards, UPI, mobile wallets… Sounds like a nightmare! Payment aggregators simplify this by acting as a middleman. They’ve already done the process, connecting with various financial institutions. While some additional setup might be needed, it’s a timesaver compared to going it alone. This frees you to focus on your business and your customers.

Why Not Multiple Aggregators for One Aggregator?

While convenient, some businesses might choose to work with multiple payment processors (not aggregators) for benefits like:

Reduced Reliance: Avoids the risk by not depending on a single provider.
Wider Coverage: Help businesses accept more payment methods.
Better Deals: Offers more competitive fees, coupons, or features.

Managing Multiple Payment Processors

However, dealing with multiple payment processors can be complex. Here businesses manage separate integrations and routing of payments. This is a challenge that payment gateways face, but not payment orchestrators who can help with.

Payment Gateway vs. Payment Orchestrator

Here’s the key distinction:

Payment Gateway: A Payment Gateway allows and simplifies payments from customers. It does so by providing a secure interface through which customers may enter, making transactions possible in such a way that there would not otherwise have been any room for them.
Payment Orchestrator - The payment orchestra simplifies difficult settlements for large corporations through accelerated processes, increased performance and reduced errors.
1. Centralised Platform: Manage all your payment connections in one place.
2. Scalability: Easily add new payment methods or providers as needed.
3. Unified Dashboard: Track and analyse all your payments from a single view.
4. Compliance Ensured: Helps ensure you meet all regulatory requirements.

Essential Features of Online Payment Aggregators

Payment aggregators simplify online transactions for both you and your customers. Here’s what to look for:

Global Reach: Accept payments in multiple currencies to tap new markets and expand your customer base.
Secure Payments: Protect your business with advanced security features that sniff out suspicious activity.
Faster Checkout: Seamless integration into shop systems makes shopping fun for consumers.
Data Insights: Gain real-time insights into sales, track key metrics, and make data-driven decisions.
24/7 Support: Reliable customer support tackles any issues, and a clear dispute resolution process keeps everyone calm.

Benefits of Using a Payment Aggregator

Payment aggregators offer businesses a powerful way to simplify and improve their online transactions. Here’s how:

Instant Setup: Forget multiple bank connections. This means quick entry into foreign markets in many countries at once.
More Payment Choices: Offer your clients their preferred forms of payment via just one system. It offers payments through various channels such as online bank transfer, wallet payment services (such as Phonepe or Google Pay), credit cards or debit cards.
Cost Savings: Negotiating rates with banks can be a hassle. As mediators in all financial dealings they have been able to negotiate favourable terms for themselves with the various banking institutions on account of their enormous turnover.
Enhanced Security: Focus on your business, not security worries. Payment aggregators prioritise data protection with features like tokenisation and fraud prevention.
Reduced Tech Hassle: Building a secure checkout page is complex. Payment aggregators handle that, freeing you to concentrate on what you do best.

Businesses Benefit from Payment Aggregators?

Business Type	Benefit of Payment Aggregators
Small and Medium-sized Enterprises (SMEs)	Simple integration, lower costs, and reduced burden compared to complex merchant accounts.
Startups	Expedited setup for accepting payments, allowing them to focus on growth.
E-commerce Platforms	Consolidated platform for integrating various payment methods, enhancing customer experience.
Subscription-based Services	Streamlined recurring billing and potential integration with membership management software.
Marketplaces	Centralised platform for secure transactions and simplified payout management for multiple vendors.

Payment Aggregator vs. Payment Gateway: Key Differences

Feature	Payment Gateway	Payment Aggregator
Primary Focus	Secure transfer of payment information	Comprehensive payment solution
Function	Connects store to acquiring bank	Manages entire payment flow
Bank Relationship	Provides connection to acquiring bank	Holds merchant accounts with acquirers
Benefits for Businesses	Simpler integration, potentially lower fees for high-volume transactions	Faster onboarding, wider range of payment options, easier management

Conclusion

By using a payment aggregator, you can easily accept various payments. If you have a high transaction volume or complex payment needs, consider a payment gateway to manage connections with multiple processors. In rare cases, a payment orchestrator might be necessary for highly complex payment routing scenarios.

FAQ's

What is a payment aggregator?

A payment aggregator is a third-party service that allows businesses to accept various payment methods—including credit and debit cards, UPI, net banking, and digital wallets—through a single platform. By acting as intermediaries between businesses and multiple payment processors, they streamline the payment acceptance process, making it seamless and efficient.

Are payment aggregators secure?

Yes, reputable organisations pay particular attention in their dealings with personal data from bank cards for fear of falling prey themselves to fraud. However, it’s always wise to choose a well-established provider.

What is the difference between a payment aggregator and a payment gateway?

Payment aggregators handle the entire transaction flow, including collecting funds. Payment gateways simply process the payment information. Think of an aggregator as a one-stop shop, while a gateway is a specialised service.