What is a Payment Aggregator & is It the Right Approach for Your Business?

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One of the clunkiest operations in commerce is finance. It comes with miles of paperwork and convoluted processes that can stall a company straight out of business. Digital payment service providers are now handling online payments and streamlining credit card processing. A business can whittle down the number of bank accounts they need to transact.

By the year 2040, it is estimated that 95% of all global purchases will be done through e-commerce. If you haven’t worked out the easiest way to accept a customer’s money by now, get started with a trusted payment processor. 

What is a Payment Aggregator?

A payment aggregator (or payment service provider) is a third-party that manages and processes merchants’ online transactions with consumers, allowing merchants to be more hands-off in their payment process. A payment aggregator allows merchants to accept a diverse range of payment options without the upfront work, whether payment is by credit card, debit card, e-wallet, or bank transfer. 

This is an easy and cheap way of accepting payments that can help a small business get off the ground quicker. There is no waiting days or months to start transacting. One of the sole purposes of a payment aggregator is to provide a streamlined payment solution that’s a shortcut from traditional payment methods. 

The aggregator is what facilitates payment from the consumer via credit cards, bank transfers, or stored value accounts. Each brand differs in the payment aggregation approach, services delivered, and processing fees associated with transacting. It’s up to the merchant to do their research before committing to any payment aggregator. Not to mention they ask for financial data, so it’s better to be on the safe side and do a thorough investigation. 

Aggregation is a payment facilitator that differs from the traditional model. This is why smaller businesses benefit the most from these payment providers. The master merchant account represents tons of sub-merchant accounts. The traditional method only dispurses one merchant account to each merchant. A startup company can be overloaded with higher fees, transaction volumes, and chargebacks going the old route.

Benefits of a Payment Aggregator

Like any form of technology, a payment aggregator has advantages and disadvantages for the acquirer. 



The payment aggregator model is a cost-effective and efficient approach for a large volume of smaller transactions. This is why they work well for a marketplace. It provides a boost for e-wallet and credit or debit card processing with minimal fees or fixed costs. 

Application Process

It’s a lot simpler than opening your own merchant account. It offers a quick entry into the world of small business. There is no need to formally submit documents or sit down with a bank. A business can start processing credit card payments almost immediately. 

Instant Access

A payment aggregator is quick and easy to set up. All it takes is signing up to process an eCommerce payment. It creates opportunities for additional talent to enter the market and it gives consumers more options to buy.


Account Holds

payment gateway that allows for instant processing means a higher risk for chargebacks. Aggregators can be slightly paranoid about account holds. Even the smallest hint of irregular activity can lock your account. This extreme caution could keep a business from making a sale if the timing is wrong.

Delayed Funds

It’s ultimately up to the aggregator how long they keep your funds. They have their own monthly fees to pay so if they need to float your money, they will. Most merchants are paid within 1-3 business days from the transaction, but it’s not something set in stone. They can choose to release funds in a timely manner or some can hold your money up to 30 days. This is not a common practice, however, because most don’t want to lose customers. 

Lower Limits

Aggregators are usually charged based on gross processing volume. That means they pass on limits to merchants. If you use this method, your processing limits will be lower than going with a separate merchant account. 

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How Does a Payment Aggregator Work?

Due to fraud with the straight aggregator model, the sub-merchant aggregator is a preferred way to organize processing. Aggregators are a lot different than most other alternative payment providers. Still, each brand has a creative way of getting the same job done.

Some payment aggregators will store a company’s money much like a bank account. At any time an item can be purchased or sold and it deducts/adds like a general ledger. A lot of these platforms also have plastic cards they issue that can be used as a credit/debit card. You can even pop it into an ATM. The only difference between this form of finance and a bank account is that an aggregator will never pay you interest. There are also various fees associated with transacting activity. 

Other payment aggregators will safely store a company’s credit card or bank data to facilitate online purchasing. Amazon charges higher fees than most aggregators, but the brand is more of a marketplace. Businesses can further save on marketing and web development costs by going through a platform like Amazon. 

Who can Benefit From Payment Aggregator?

Any online business can benefit from financial aggregation. A few industries that are frequently using this form of payment processing include:

  • Software
  • Service
  • B2B
  • B2C
  • Agency
  • And more…

This model allows software providers to function as a payment service provider too. All that is required it payment processor integration.

What are the Risks Associated with Payment Aggregation?

There is always an inherent risk with doing anything financial on the internet. Hackers are out there and no system is perfect. A business should always know this before putting information online. No aggregator can 100% guarantee safety.

In these situations, the payment aggregator generally gets the preferred processing rate from the underlying bank or payment processor. This means they assume the risk involved and have financial liability for the entire portfolio. Consequently, they are responsible for any chargeback or transaction fraud associated with a sub-merchant.

That’s good news. Especially for small business owners. It’s an added layer of financial protection that lets you sell to your heart’s content with sound peace of mind.

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