What Is A Payment Aggregator?

To make online payment processing seamless, businesses often collaborate with third-party providers. These providers also manage the entire payment ecosystem of businesses. One such provider is known as a payment aggregator. Payment aggregators are meant to optimise the payment process helping businesses to work with complex electronic transactions in a unified setup. Including online money transfers and credit card payments. Businesses must understand that payment aggregators don’t offer comprehensive solutions for every aspect of online payments, so before working with one, know what they offer and what they don’t. Neofinity, Paytm, Google Pay and Amazon Pay are payment aggregator examples. 

With our Neofinity products, customers and businesses can experience mobile-fast banking offering utmost security and finesse. 

Now, let’s understand What is Payment Aggregator in detail. 

What is a Payment Aggregator?

Payment aggregators have several names. Some refer to it as payment facilitators while others call it payment service providers. A payment aggregator is a fintech firm that helps with the collection of electronic payments from businesses. 

Key Features of Online Payment Aggregators

The following are the key features of online payment aggregators:

Different Payment Options

When one mode of payment doesn’t work, we look for other options. But, if the options were limited, it would create problems in the customer’s transaction experience. When a business connects with a payment aggregator, they are making different payment options accessible to customers, including Netbanking, debit cards, credit cards, UPIs, e-mandates, bank transfers, e-wallets and more. 

Secure Payment Transactions

Severe consequences can take place if payment-related information goes out to the wrong people. To ensure the security of payment data, businesses integrate payment aggregators of the highest safety infrastructure. Furthermore, payment aggregators don’t store any sensitive payment data, thus ensuring secure transactions. 

Easy Checkout

To ensure customers complete their payment processes, businesses must integrate payment systems which have simplified checkout pages. However, different payment modes, authentication techniques, rules, and regulations make this a difficult undertaking. Payment aggregators thus offer customers an easy checkout experience to make speedy transactions. 

Fast Settlements

Businesses must integrate payment service providers that allow fast payment processing. One thing that annoys customers the most is payment delays. This can be a cause for cash flow crunches and businesses can end up losing customers. To address this problem, payment aggregators ensure rapid fee settlements even during banking holidays, weekends and non-banking hours. 

Customer Support

If any customer faces a roadblock while making online transactions, payment aggregators dedicate their customer support teams to handle such situations. The customer support team can help end users with checking payment status or transaction history. They can also offer assistance to businesses with filing a report against fraudulent transactions or guide merchants on how to generate API keys. 

How Do Payment Aggregators Work?

Payment aggregators act as a bridge between customers, businesses and financial institutions to process online payments via various payment methods on the same website or app. Here’s how payment aggregators work:

• Businesses need to open a merchant account with a payment aggregator before transactions. The aggregator has a nodal account with the bank where all customers’ online payments are processed. 
• Customers while making payments, select a mode and input all transaction details. The payment aggregator then tokenises this payment and also ensures fraud detection on this page. 
• After analysing that the transaction is clean, the aggregator sends the payment to the bank with the nodal account. Then, via a payment processor, the bank sends customer information to the card company. 
• This time the card company carries out a fraud check on the customer’s previous spending behaviour. Once the check is done, the information is sent to the bank where the customer is holding an account. 
• After the customer’s bank gets all the information, the bank checks whether the individual has enough funds to make the payment or whether their details are okay. 
• The transaction status (approved or denied) is sent through the same channel from which the transaction data arrived. 
• When the payment gets approved, the bank of the payment aggregator will request funds from the customer’s bank. The funds are stored in the nodal account, as mentioned before.
• Finally, the payment aggregator will settle all payments that it receives from your business. 

Types of Payment Aggregators in India

There are two types of payment aggregators in India:

Bank Payment Aggregators

Usually, large businesses integrate bank payment aggregators in their system which have a more traditional approach. Though bank payment aggregators offer a wide range of services, they are costly to install in companies. For new firms or small companies, the large expense of bank payment aggregators can be an issue as they require advanced methods to set up. 

Third-Party Aggregators

Third-party aggregators provide greater adaptability and innovative methods to meet the payment needs of both businesses and merchants. These aggregators offer an array of payment alternatives and are inexpensive and user-friendly. Third-party aggregators offer an optimised payment system to customers, thus being a favoured option for businesses. 

Difference Between Payment Aggregator And Payment Gateway

In the digital payment ecosystem, both payment aggregators and payment gateways are essential. However, they come with some points of difference. Let’s check out the difference between payment aggregator and payment gateway:

Merchant Accounts

Between payment gateway vs payment aggregator, the first one doesn’t offer any merchant account. Hence merchants need to use their existing accounts for transactions. However, the latter offers a sub-merchant account so that they don’t have to create individual accounts with different banks. 

Function

Payment aggregators act as middlemen between merchants and acquirers, thus giving merchants access to make payments through numerous channels via a unified interface. Payment gateways initiate authentication and process payment transactions between customers and merchants. 

Services

Payment aggregators other than offering seamless payment transactions provide services like analytics, fraud detection and reporting. Payment gateways offer services like recurring payments and tokenization. 

Conclusion

For seamless transactions that offer multiple payment methods, businesses utilise payment aggregators. If you want to create a smooth online payment experience for your customers, you can integrate Neofinity products into your payment systems. Powered by RBI, our products simplifies the payment process with a swipe or tap. 

FAQs on payment aggregator

1. What is a paid aggregator?

Paid aggregator or payment aggregator is a third-party service provider that allows customers to make payments and businesses to accept them, digitally. 

2. Is Paytm a payment aggregator?

Yes, Paytm is one of the well-known payment aggregators that allow businesses to accept payments from customers through UPIs, debit/credit cards and bank transfers. 

3. Who is the 1st payment aggregator in India?

The Reserve Bank of India introduced the framework of payment aggregators.