Working Criteria and Types of Payment Aggregator in India?

Working Criteria and Types of Payment Aggregator in India?

To allow your customers to use their credit cards to purchase products and services, you will need to provide the necessary solutions to process payments. These are the areas where you will most likely cross paths with payment service providers (PSPs), payments gateways and acquiring banks.

This is where things can become complicated and sometimes even prohibitively costly, depending on your business situation. Due to the lengthy approval and application process and high risk of cyber fraud, not all businesses can hook up their operations with merchant accounts. This is where the payment aggregator model can be helpful.

Continue reading to learn more about the role of payment aggregators and whether your business might need one.

Did You Know?

Aggregators work like a service supplier, which removes the issuers’ work in making mortgage-backed protection. Also, when mortgage originators in the process of protection become aggregators, they generate special purpose vehicles (SPVs) for completing and facilitating the transaction.

 

What Is a Payment Aggregator or Merchant Aggregator?

Payment Aggregators are the inclusion that makes it the most comprehensive of Payment Gateways. It provides services that allow online merchants to manage payments. They enable merchants to take all bank transfers without opening an account for the merchant who is connected to the bank. 

One of the main differences between a Payment Aggregator and a Payment Gateway can be that it is typically used for online transactions. At the same time, the former digitises offline/offline payment points.

The payment method allows users to transactions that include the recording of cheques, cash, online payment options and offline touchpoints (anywhere in-store, in-field and remote SMS-based transactions). Additionally, it permits merchants to accept any type of payment options without having to set up separate accounts with banks or with each credit card business or payment services provider.

 

Also Read: What are the Payment Gateway Charges in India?

Payment Aggregator Example

Suppose you won a rug shop in India and plan to expand your business to Canada and Mexico. Setting plants in these countries will need space, employees, a lot of raw materials, transportation facilities, etc. 

So, the shortcut for you will be to hire rug factories for rent. The outsourced factory will be the third party payment aggregator. You'll certainly need to send and receive payments, and in those countries, your representatives (who run your shop) need to offer the customers online payment services.

In such cases, payment aggregators prove to be handy, as they offer numerous payment options like UPI, wallets, EMI, Pay Later, cards, net banking, etc., under one roof.

How Do Payment Aggregators in India Work?

Now that you know the payment aggregator's meaning, let’s understand how it works. A PA gives you a merchant account, your customer heads to the checkout, and your card company runs a fraud check. If you have a small business, payment aggregators are an excellent choice. 

If your business is growing, merchant accounts may be a better choice. In most cases, payments are settled within a few days. However, if you have a high volume of transactions, you may want to consider getting a merchant account. Here's the process:

  1. The customer initiates the payment transaction simply by clicking on "Buy Now" or the equivalent button on the site.
  2. The customer is taken to an E-commerce platform where they will be able to make a payment.
  3. The payment gateway redirects the customer directly to a secure page that authorises the transaction.
  4. After the payment gateway has approved the transaction, banks check the customer's account to determine if the transaction was successful.
  5. The payment gateway sends the message to the customer (successful transaction, transaction error).
  6. If the transaction is successful, the bank will settle the payment with the payment portal.
  7. The payment gateway will then settle the payment with the merchant. This notifies the customer that the transaction was successful and that the payment process has ended.

Payment Aggregator Provides Merchant Account

Merchant accounts can be extremely costly, but they're not the only way to accept credit card payments. Many e-commerce companies are dependent on their payment aggregator, but they have strict processing volume limits. Payment aggregators in India are flexible, and some can even grow with your business and offer higher processing limits.

Payment aggregators work by channelling your payments through a master account. This gives you a single interface to process payments and manage your payments. A payment aggregator will help you save money while enabling your business to accept payments on the fly.

These services allow you to accept credit cards from any source without the hassle of establishing a separate merchant account.

Customer Heads to Checkout

If you've been pondering how to implement a one-click checkout solution for your store, it's probably not a surprise that you've heard about payment aggregators. The technology allows you to accept payments without redirecting your customers and makes the checkout process hassle-free. 

The customer selects a product to purchase and then goes to checkout. The customer enters their payment details on the page page. Customers can choose to pay via cards, net banking, or UPI. They also have the option of EMI and wallets. These payment details are encrypted or tokenised by the payment gateway.

PA's Acquirer Receives Transaction Information

PA's are third-party processing platforms that bridge the gap between merchants and acquirers. These platforms typically provide a sub-merchant account and receive payments for merchants in batches. The aggregator transfers these funds to merchants after a while.

A merchant must first register with the PA's Acquirer to accept a Payment Method. Once an account is set up, a merchant must confirm that the cardholder is of legal age, has a valid address and is employed by a company. Once a merchant has been approved, the PA will transfer the transaction information to the merchant's account. The Acquirer may also provide payment processing services for the merchant's website.

Card Company Runs Fraud Check

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