Should You Accept Payments through an Aggregator?

What are the pros and cons of working with a payment aggregator? Should you use this approach in your business?

Friday, December 3rd, 2021

Payment aggregators: what are they, and how do they work? Should your business sign up with one? Here we’ll explore both to help you decide if a payment aggregator is a proper approach for your business.

What is a Payment Aggregator?

A Payment Aggregator is a company that organizes and manages online payments for several different retailers. For example, a company may provide payment services for hundreds of online retailers. Instead of setting up a payment gateway for each retailer, the Payment Aggregator allows you to connect your shopping cart to their service.

The aggregator collects all payments together until the end of the day, which helps merchants avoid holding large amounts of cash at their place of business. After all of the payments are collected, the aggregator sends them off to the appropriate issuing banks, who then settle up with each other.

The Pros of a Payment Aggregator

A payment aggregator offers multiple benefits to a business. Some of them include:

  1. You reduce the workload on your current merchant account by taking responsibility for fewer transactions.
  2. You have a consistent way to accept payments from multiple sources.
  3. All your sales data is in one place for easy analysis and tracking purposes.
  4. You can more readily accept international payments as you expand your business globally.
  5. Get access to multiple payment options. A payment aggregator will allow you to accept payments through different means such as PayPal and credit card processing.

A payment aggregator is particularly handy for online merchants who don’t want to install and maintain complex processing software and hardware. 

Potential Cons of a Payment Aggregator

While this approach offers multiple benefits to a business, there are a few potential cons:

  1. No support for recurring billing. Many e-commerce businesses rely on subscription models that require monthly billing cycles. Payment aggregators don’t have the capacity to handle this function.
  2. Lack of control over transaction fees. Payment aggregators have different rates for different gateways and payment methods. This can result in higher processing fees than other options.
  3. Limited Payment Types. Some payment aggregators allow you to accept all forms of payments (PayPal, credit card, check), while others may limit your options. For example, you might only be able to accept PayPal payments through some systems and checks through others.

Final Words

For small businesses that accept card payments, the idea of working with an aggregator makes sense for a number of reasons. It can bring costs down, offer easier access to different payment providers, and help minimize the risks associated with card processing online. As long as you are willing to plan ahead and partner with the right aggregator, accepting card payments can become a much smoother process for your business.

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