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Everything You Need to Know About Payment Aggregators

Everything You Need to Know About Payment Aggregators
anoosh-kotak
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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