In today’s fast-paced digital economy, businesses need more than just a bank account to manage payments. From accepting UPI to cards and EMI payments, the process requires speed, security, and flexibility. That’s where Payment Aggregators come in. But what is a Payment Aggregator, really and why are they so important?
Understanding Payment Aggregators in Simple Terms
A Payment Aggregator (PA) is a licensed service provider that helps merchants accept payments from multiple channels—like credit cards, debit cards, UPI, net banking, and wallets without setting up individual integrations with each bank or payment provider.
Think of them as the bridge that connects your business to the entire digital payment ecosystem.
For example, when a school or online retailer wants to accept payments online, a payment aggregator enables this through a single, unified interface saving time, effort, and compliance headaches.
Let’s look at the example below to explain –
Suppose a business wants to provide Net Banking payment options to its consumers, then one way to go about it is that the business ties up with different banks; however, this approach would entail a lot of resources, time & capital. Another way to go about this for a business is to tie up with a Payment Aggregator, which would enable the business to offer various payment options, including Net Banking, while eliminating the need to go and tie up with each bank. The technology that the Payment Aggregator leverages/uses to securely transfer consumer payment information for processing is known as the Payment Gateway. Most of the Payment Aggregators have an in-house technology stack i.e., a Payment Gateway, or will tie-up with third parties for the solution.
How Does a Payment Aggregator Work?
When a customer initiates a transaction on your website or app:
- The payment aggregator securely collects the payment.
- It processes the transaction through the appropriate payment method (UPI, card, etc.).
- Once successful, the amount is settled into your account, usually after a defined T+1 or T+2 cycle.
All this happens seamlessly often in seconds without your business needing to integrate with individual banks or payment gateways.
Why Do Businesses Choose Payment Aggregators?
Here’s why businesses, especially in India, prefer using PAs:
Unified Payment Collection
Accept all major payment modes (UPI, cards, wallets, net banking) through a single platform.
✅ Regulatory Compliance
Licensed by the RBI, payment aggregators ensure that your business meets data security, audit trail, and compliance standards.
✅ Faster Go-To-Market
No need to wait weeks to tie up with banks individually. Plug and play with the aggregator’s infrastructure.
✅ Simplified Settlements
Consolidated reconciliation reports, real-time dashboards, and auto-recon with ERP or accounting systems.
What’s the Difference Between a Payment Aggregator and a Payment Gateway?
This is a common question. A payment gateway provides the technology to facilitate online transactions. A payment aggregator, on the other hand, also handles the onboarding, settlement, and regulatory responsibilities offering an all-in-one solution.
In short:
Aggregator = technology + merchant account + settlement + compliance
Gateway = technology provider
Do You Need an RBI-Licensed Payment Aggregator?
Yes, if your business is collecting online payments on behalf of others (like platforms, ERPs, or marketplaces), you’re required by the Reserve Bank of India to use a PA that holds an RBI license.
Examples of Payment Aggregators in India
India’s fintech space is rapidly evolving. Some RBI-licensed payment aggregators include:
- Phi Commerce – Offers omnichannel payment solutions with ERP integration and real-time reconciliation.
Final Thoughts: Is a Payment Aggregator Right for You?
If you’re a growing business, educational institute, or platform handling large volumes of
- Scale faster
- Reduce operational costs
- Offer your customers a frictionless payment experience
Frequently Asked Questions (FAQs)
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What is a payment aggregator in simple terms?
A payment aggregator is a service that allows businesses to accept digital payments without setting up individual bank accounts or direct integrations with every payment provider. It simplifies collections across UPI, cards, wallets, and more through one platform.
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How is a payment aggregator different from a payment gateway?
While a payment gateway handles the tech side of processing online payments, a payment aggregator also manages merchant onboarding, fund settlement, and compliance with RBI regulations. Think of it as a full-stack solution.
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Why do businesses need payment aggregators?
Businesses use aggregators to collect payments from multiple channels quickly, reduce operational load, ensure compliance, and provide customers with a seamless checkout experience.
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Is it mandatory to use an RBI-licensed aggregator in India?
Yes. The Reserve Bank of India mandates that only RBI-licensed entities can act as official payment aggregators, ensuring user safety, transaction transparency, and data security.
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Can small businesses and startups use payment aggregators?
Absolutely. Most aggregators support businesses of all sizes. They offer easy onboarding, scalable solutions, and tools like EMI options, dashboards, and reconciliation reports.
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What should I look for when choosing a payment aggregator?
Look for RBI licensing, ease of integration, support for various payment modes, real-time reporting, settlement speed, and ERP or CRM compatibility if you run a larger operation.
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Do payment aggregators charge setup or transaction fees?
Most aggregators have a per-transaction fee (usually a small percentage). Some may also charge setup or annual maintenance fees. It’s best to compare pricing models before choosing.
