Everything You Need to Know About Payment Aggregators

Everything You Need to Know About Payment Aggregators
Anoosh Kotak24 February 2024

An entrepreneur is a jack of all trades who must ensure that every aspect of the business runs smoothly, such as accepting online payments from customers without hassle. 

Enter payment aggregators – the game-changers in simplifying the complexities of payment processing.

What Are Payment Aggregators? 

Payment aggregators are payment companies that work as third-party service providers to other companies to ensure their customers can pay online to buy products or services. 

A payment aggregator example is when you visit an e-commerce platform and pay online without leaving the app. You can pay for the cart items because an online payment aggregator provides payment services to the e-commerce platform. 

What Payment Aggregators Do?

Payment aggregators in India work as intermediaries between merchants (businesses), their customers, and the financial institutions customers use to complete online payments. 

What Payment Aggregators Do?

As it is challenging for a business to partner with every Indian bank and NBFC, they onboard the services of a payment aggregator that serves as a middleman between the businesses, banks, and financial institutions. 

Payment aggregators offer numerous payment services to businesses, including debit cards, UPI, credit cards, no-cost EMIs, e-wallets, net banking, bank transfers, and e-mandates. Furthermore, they allow companies to internally pay various stakeholders, such as employees, suppliers, vendors, partners, and other authorities, for compliance. 

With an online payment aggregator, here is how a payment gets processed.

how a payment gets processed
  • Onboarding
    Merchants get on board by opening a merchant account with the payment aggregator. 
  • Payment Initiation
    Customers initiate a payment by visiting the payment window, choosing a payment method, and providing payment details. 
  • Transaction Processing
    After payment initiation, the payment aggregator sends the transaction information to the customer’s bank. The bank communicates the information with the card company through a payment processor. 
  • Payment Processing
    The card company does a fraud check and returns the transaction verification information to the customer’s bank. The bank verifies the funds and debits the amount to be sent to the payment aggregator’s bank, completing the transaction.  
  • Payment Settlement
    The payment aggregator stores all the payments on behalf of the business and settles the payment in a lump sum, sending it to the business immediately or after a predefined period. 
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Choosing the Right Payment Aggregator

Here are some essential factors to consider before choosing a payment aggregator RBI for your business.

Choosing the Right Payment Aggregator
  • Supported Payment Methods
    Ensure that the payment aggregator supports the payment methods relevant to your business and target market. It may include credit cards, debit cards, digital wallets (e.g., PayPal, Paytm), bank transfers, and alternative payment methods popular in your region.
  • Transaction Fees and Pricing Structure
    Look for affordable and transparent pricing of payment aggregators with no hidden fees, and consider factors such as transaction volume, processing volume, and any additional fees for premium features or services.
  • Security and Compliance Features
    Select payment aggregators that prioritise security and compliance with industry standards. Look for features like tokenisation, encryption, fraud detection, etc. 
  • Integration Ease with Existing Platforms
    Assess the ease of integration with your existing e-commerce platforms, shopping carts, and Content Management Systems (CMS), with APIs, plugins, and other features. 
  • Customer Support and Reputation
    Research the reputation and reliability of the payment aggregator based on its payment success rate, reviews, testimonials, and resolution of issues. 

Benefits and Drawbacks of Using A Payment Aggregator 

Using a payment aggregator offers several benefits for businesses. 

Benefits and Drawbacks of Using A Payment Aggregator
  • Streamlined payment processing
  • Simplified onboarding
  • Access to a wide range of payment methods 
  • Enhanced checkout experience for customers 
  • Increased conversion rates 
  • Higher customer satisfaction 

Payment aggregators also provide convenient reporting and analytics tools, enabling businesses to track transaction data, monitor sales performance, and make data-driven decisions to optimise payment strategies.

However, there may be some drawbacks. 

Drawbacks of Using A Payment Aggregator
  • Potential limitations on customisation and branding
  • Higher transaction fees compared to traditional merchant accounts 
  • Impacted profit margins, especially for high-volume businesses. 


Payment aggregators offer businesses a convenient and efficient solution for processing online payments, streamlining operations, and enhancing the customer experience. However, analyse their benefits and drawbacks and compare them based on business-relevant factors to choose the best one for your business.

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Frequently asked questions

Q1. What are the fees associated with using a payment aggregator?

Ans: Payment aggregators charge nominal fees ranging between 2%-3% per transaction.

Q2. What are the limitations of using a payment aggregator?

About the author
Anoosh Kotak
“The 0 to 1 journey filled with interesting problem solving & learning experiences.”Sports, Travel & Binge-watching