Difference Between Payment Aggregator And Payment Gateway

Payment Aggregators and Payment Gateways are different methods that empower digital payment and enhance online businesses. Understand the differences between these two to choose your suitable payment methods and minimize the operating costs.

Let’s come across key distinctions between the two terms - from their functions, purposes of use, onboarding processes, and fee features, to find out the right solution for your needs.

What is a payment aggregator and a payment gateway?

Payment aggregators and payment gateways help simplify and fasten the payment process of online businesses. Each type of business will need different suitable methods to maximize its profit and enhance its customer experience. While one of them is an organization that facilitates payments, the other one is only a powerful piece of software that integrates into a website or payment portal.

Understanding the differences between payment aggregator and payment gateway is critical in minimizing operating costs.

Payment gateway: Key functions and examples

A payment gateway is a technology service that facilitates secure digital transactions, especially in online and card-based payments. It offers comprehensive and customizable solutions that allow mid to mid-businesses of all scales to integrate payment processing seamlessly into their websites. There are 4 different types of payment gateways and each type has its advantages and disadvantages that make it suitable for different types of businesses’ demands.

Key functions of a payment gateway include securely transmitting payment data, routing payment authorization requests, ensuring secure communication with financial institutions, implementing security measures to protect cardholder data, and helping merchants comply with industry standards like the PCI DSS.

The method is most beneficial for businesses that require a degree of customization, and advanced features like recurring billing, such as e-commerce retailers, food delivery services, subscription services, small and medium businesses, educational institutions, etc.

Payment aggregator: Key functions and examples

A payment aggregator, or Payment Service Provider (PSP), is a service that simplifies payment processing for small to medium-sized businesses. It enables multiple merchants to accept payments through a single, shared merchant account, streamlining the onboarding process. They handle payment processing, including secure data transmission, authorization, and fund transfer. Some also offer basic risk management services to mitigate fraud.

Payment aggregators are widely used by businesses seeking a convenient and cost-effective way to accept payments, making them especially popular in the e-commerce industry. Real-world examples of businesses using payment aggregators can be named e-commerce platforms, online marketplaces, mobile apps, subscription-box services, etc.

Payment aggregators are widely used by businesses seeking a convenient and cost-effective way to accept payments

Difference between payment aggregator and payment gateway

The purpose of differentiating between a payment aggregator and a payment gateway

Differentiating between a payment aggregator and a payment gateway is essential for they serve distinct roles and have different implications for businesses. Understanding the differences helps businesses choose the right payment solution for their specific needs. The purpose of differentiating the two methods varies, including:

• Payment Processing Model: Payment aggregators typically bundle multiple merchants under a single merchant account, simplifying onboarding but potentially sharing risk and causing delays in fund settlement. Payment gateways, on the other hand, facilitate direct, individual merchant accounts, providing more control and faster fund settlement.
• Risk Management: Payment gateways offer better risk management as each merchant has an account. In contrast, payment aggregators may impose restrictions on high-risk businesses due to shared liability, making it challenging for such businesses.
• Payment Data Handling: Payment gateways often provide more control over payment data, allowing businesses to manage and store customer information. Payment aggregators handle payment data on behalf of multiple merchants, potentially raising security and compliance concerns.
• Funding and Settlement: Payment aggregators may bundle funds from multiple merchants and distribute them at set intervals. Payment gateways enable individual settlement, providing quicker access to funds and better cash flow management.
• Customer Experience: Payment gateways allow businesses to offer a consistent, branded customer experience. Aggregators may provide a standardized checkout process shared across multiple businesses.

In summary, distinguishing between payment aggregators and payment gateways is crucial to aligning your payment processing solution with your business needs, risk tolerance, and growth objectives. Businesses should carefully assess the features and requirements that matter most to them to make an informed choice between these two payment solutions.

Understanding the differences helps businesses choose the right payment solution for their specific needs.

Differences between payment aggregator and payment gateway

Payment aggregators and payment gateways are two distinct components of the online payment processing ecosystem, each with unique functions and roles.

Feature	Payment Aggregator	Payment Gateway
Aggregates Multiple Merchants	Yes	No
Simplified Onboarding	Yes (Faster, Less Rigorous)	No
Shared Liability	Yes (Merchants Share Account)	No (Individual Accounts)
Payment Page Redirection	Yes (Often Redirects Customers)	No (Customizable Checkout)
Funding and Settlement	Yes (Bundled Funds, Set Intervals)	No (Individual Settlement)
Risk Management	Limited Control	Robust Risk Management
Customized Checkout	Limited Customization	Highly Customizable
Payment Data Handling	Limited Control	Full Control
Compliance and Security	Basic Compliance Support	Comprehensive Compliance
Scalability	Limited Scalability	Highly Scalable
Pricing Complexity	Simplified Pricing	Variable and Complex

This table provides a clear overview of the differences between payment aggregators and payment gateways in various aspects.

If you already know about the differences between 2D and 3D payment gateways, you will see the table above is a more detailed comparison that helps you to understand more thoroughly the differences between these types of payment processing methods.

Payment gateways and payment aggregators differ significantly in key aspects. Gateways provide individual merchant accounts, offering more control, branding, and customization options, making them ideal for businesses looking to maintain a distinct and branded checkout experience. They enable individualized risk management, making them suitable for those with specific fraud prevention needs.

In contrast, payment aggregators group multiple businesses under a shared account, simplifying onboarding but offering less customization and control. They share risks among merchants in the same account, which can affect others.

It's essential to choose the right payment processing solution based on your business's size, growth plans, customization needs, and risk tolerance to ensure a positive customer experience and financial protection.

PayCEC: Empowering Global Commerce with Secure and Instant Payment Solutions

PayCEC is an international payment gateway solution that offers merchants customization and control over the payment process.

In the ever-evolving landscape of global commerce, a reliable and versatile payment gateway is the lifeblood of businesses seeking to thrive in the digital era. PayCEC stands as a beacon of excellence in this realm, offering an unparalleled platform that not only enables seamless and secure transactions but also ensures instant access to markets worldwide. With a steadfast commitment to innovation and customer-centric solutions, PayCEC has earned its reputation as a premier payment gateway, indispensable for businesses of all sizes.

To merchant partners, PayCEC has benefits dedicated only to merchants with the following four categories, including Accepting payment online with hassle-free efforts; Automating your own business with various features for operating, managing, and branding; Being trendy and innovative with new technologies; Integrating plugins with no experience required on WooCommerce by WordPress, OpenCart, and WHMCS.

In the digital age, choosing the right payment gateway is a make-or-break decision for businesses. PayCEC's commitment to security, efficiency, and adaptability ensures a seamless and trustworthy experience. Partner with PayCEC to connect your business to customers worldwide, taking full advantage of its secure and instant global payment solutions.