What is a payment aggregator?

Payment aggregators in India have grown in popularity in recent years. Accepting payments online is critical to the viability of your business operations. Not being able to make online payments in a cashless, e-commerce-driven economy may frustrate clients and cause you to lose business. If you want your customers to be able to use their credit cards to purchase goods and services, you must deploy the right payment acceptance and processing solutions. Ideally, this is where you will encounter payment service providers (PSPs), payment gateways, and acquiring banks. Furthermore, depending on your organization’s circumstances, this is where things might become unclear or too expensive. Not all businesses can open a merchant account due to the lengthy application and approval processes, as well as the high danger of online fraud. A payment aggregator’s business model can help to simplify the situation.

What is a Payment Aggregator?

A payment aggregator, also known as a merchant aggregator, is a third-party service provider that enables companies to accept payments from customers by integrating payment functionality into their websites or mobile applications. A payment aggregator acts as a bridge between acquirers and merchants. Once this is done, you will be able to access a “sub-merchant account”. After that, the payment aggregator will work on your behalf to collect payments from customers. Following a specific period, the money will be transferred to you in instalments. This stage of the process is called settlement. Under the Companies Act of 1956 (as amended in 2013), a payment consolidator can become a legally recognized entity in India. It is now possible for them to be both a non-banking organization and a bank. Since a payment aggregator is responsible for handling money, a license from the Reserve Bank of India is necessary. Although, the permission of the RBI is only necessary for payment aggregators that are not banks.

Payment Aggregator Example

A payment aggregator is a platform that lets you accept many different types of payments in one place. Let’s simplify the situation by using an analogy. Let us assume you own a footwear store. You’ve been considering expanding beyond India for some time. So, you choose to construct stores in London and China. However, footwear production requires factories, raw materials, chemical dyes, and a great deal more. While other tasks are achievable, it is almost impossible to construct factories in every region of the globe. Therefore, you decide to outsource and rent footwear manufacturing. Now, you can concentrate on producing high-quality footwear without worrying about financing for new factories around the world. This is the end of the line. Your business is linked to the apparel industry. The outsourced manufacturing facility is the third-party payment consolidator.

Let’s use the example of a payment aggregator to put this into context.

Assume you are a merchant seeking to provide your customers with net banking payment choices. Performing due diligence and integrating data would take a long time. A substantial investment would also be necessary. This would be similar to building a factory. A payment aggregator comes into play at this point. A payment aggregator can provide you with multiple payment choices, such as cards, net banking, UPI, wallets, EMI, Pay Later, etc., all under one roof. Simply stated, (outsourcing the factory = using a reliable payment consolidator)

Payment Aggregators in India

Payment aggregators in India can be divided into two categories. It could be a private platform or a payment aggregator that banks offer. Payment aggregators are given by banks and private (third-party) payment aggregators. Payment aggregator services were previously solely offered through banks before the early years of the twenty-first century. For their part, the vast majority of businesses were looking for more cutting-edge payment methods. Third-party payment aggregators stepped in to fill the gap, bringing new ideas to the market and shaking things up. A separate RBI licence is required for non-bank payment aggregators. SabPaisa’s Payment collection suite streamlines payments collection, payouts, and exhaustive APIs to simplify payments-related complexities of business houses, hospitals, government bodies, SAAS & E-Commerce companies, schools, colleges, & universities, councils etc. Read More: All You Need to Know About Payment Aggregators in India What is In-Principle Authorisation by RBI and It’s Requirements

There's a good probability that you're attempting to decide how to build up a system for both your online and offline transactions. You will be considering it if you're in the phase of starting a firm. I was also confused about this concept when I wanted to start my business. But later, I got to know about this concept. So I am here to guide you about the payment aggregator in India.

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What is a payment aggregator meaning?

A service provider is known as a payment aggregator, sometimes known as a merchant aggregator. It collects and offers several payment acceptance solutions to merchants. There’s one significant distinction between a gateway and an aggregator. It is that as opposed to a portal, which is used for e-commerce apps and websites. An aggregator transmits both offline and online transaction points.

Each activity, such as the processing of cash and checks as well as digital payment methods across all online (site, application) or offline connections. It is facilitated by a financial aggregator (at the billing counter, in-store and remote SMS-based payments). It allows businesses to take all forms of payment without opening individual accounts. It can be with banks, payment services, or credit card issuers. Now you know what is a payment aggregator.

How does an aggregator of payments operate?

The terms payment gateway and aggregator are frequently used together and have different meanings. The payment aggregator mechanism is actually designed specifically to handle internet payments. A payment gateway by itself is not sufficient to handle payments, according to another popular misconception. A digital payment gateway just manages the transaction's technical aspects.

Payment gateways collaborate with the banks that operate behind the operations typically to establish merchant accounts. The authorization procedure and fund transfer process must be coordinated by the actual bank. It is frequently difficult when there are multiple merchants requesting for these units to receive online payment.

What is the list of payment aggregators in India?

The following is the list of the payments aggregators in India:

• PayUBiz India Payment Gateway

• CCAvenue Payment Gateway

• Citrus Pay Payment Gateway

• Bill Desk

• Razorpay

You are now aware of the payment aggregator in India.

Read More: List of account aggregators in India What is an aggregator in banking? What is prepaid payment instruments? What is VPA in online payment?