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Payment Aggregator is also known as Merchant Aggregator. Payment Aggregators are service providers through which e-commerce merchants can process their payment transactions. Aggregators allow merchants to accept credit card and bank transfers without having to set up a merchant account with a bank or card association.
Payment aggregators offer a quick entry into the world of small business. Without the need to formally submit a number of documents or applications, your startup business can get started processing credit cards near instantly.
The payment aggregator model tends to provide a boost for credit card & wallet payment processing, with minimal start-up fees or fixed costs. In substitute of start-up fees or fixed rates, variable merchant fee is added on to each successful transaction.
Payment gateway in India can be done within 3-7 working days. It’s easy to integrate on the website. Time is money and the faster you start processing, the faster profit starts rolling in.
It’s easy to apply and even easier to set up. After signing up, you can immediately start processing e-commerce payments or just pop the mobile swipe on your cell phone and you’re ready to take payments on the go. Disadvantages of Payment Aggregators
Payment aggregators allowing instant credit card processing, aggregators are at higher risk of a later chargeback. In order to counter the risk, they exercise extreme caution when irregular activity is found and the merchant or cardholder is suspected. This means that they won’t be shy about freezing accounts without notice.
To allow a high number of merchants to process instantly and easily, aggregators increase their own risk. In turn, the higher risk correlates with higher fees.
Aggregators have their own fees; they are charged based on gross processing volume, which means that your processing limits are lower than they would be with a merchant account.
Aggregators have control over when they disperse your money. They usually hold the funds for 24-48 hours before depositing, but holds could potentially be longer.
Key considerations when implementing or buying this functionality include:
Payment aggregator can be implemented in one of the two ways.
Due to the increased possibility of fraud with the straight aggregator model, the sub-merchant aggregator is a preferred way to organize processing.
One of the categories of merchant services industry players, frequently using payment aggregator, includes software and service companies, customers of which need to accept payments from their respective customers. Payment aggregator model allows software providers to function as payment service providers using either payment processor integration.
In these types of arrangements the payment aggregator usually gets the preferred processing rate from the underlying payment processor or bank. In return, it, generally, assumes the risk (a financial liability) for its entire portfolio. Consequently, aggregator becomes responsible for any transaction fraud or chargeback associated with its sub-merchants.
An aggregator is preferred for a smaller business. While it is the goal of any business to grow better, it’s not necessarily every merchant’s goal to grow bigger, so aggregators are optimal for businesses that are content on staying micro. However, for those businesses that want to expand, processing needs will outgrow an aggregator.
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