India Payment AggregatorIndia Payment Aggregator<\/p>![\"India](\"https:\/\/i0.wp.com\/gatewaysamath.com\/storage\/2024\/09\/UPI-payment-gatway-atpay-2024091402.jpg?resize=930%2C620&ssl=1\")
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What is a payment aggregator?<\/span><\/h3>\n\n\n\n Payment aggregators are third party service providers that allow customers to make payments online and businesses to accept payments. Payment aggregators allow customers to accept various payment methods such as debit cards, credit cards, cardless EMIs,UPI<\/a>, bank transfers, e-wallets and e-authorisations. Similarly, they allow payments to various stakeholders such as partners, employees, suppliers and authorities.<\/p>\n\n\n\n Payment aggregator fromReserve Bank of India<\/a>Obtain an aggregator licence for acquiring merchants and providing them with the infrastructure to accept and disburse digital payments.<\/p>\n\n\n\n To enable various payment methods on its own, the enterprise has to liaise with various banks andNon-Banking Financial Companies<\/a> (In India, however, there are 34 nationalised banks and 9,680 banks in the country. However, in India, there are 34 nationalised banks and 9,680 NBFC<\/a>. Not every business has the ability to work with such a large organisation, and this is where payment aggregators essentially act as a middleman between individual businesses and financial institutions.<\/p>\n\n\n\n Payment aggregators relieve merchants of the technical burden of designing and building checkout pages that fit perfectly with various payment methods.<\/p>\n\n\n\n
Recommended Reading:Non-Banking Financial Corporation of India NBFC<\/a><\/p>\n\n\n\n Key Features of Payment Aggregator India<\/span><\/h3>\n\n\n\n Payment aggregators offer a variety of benefits, addressing key aspects such as secure handling of payment data and fraud detection and prevention. Payment aggregators also enable end users to access multiple payment methods and enjoy a seamless checkout experience. Let's take a closer look at these and many other key features:<\/p>\n\n\n\n
1. Seamless onboarding, integration and sub-merchant accounts<\/p>\n\n\n\n
In e-commerce, services are sometimes provided by co-operation between businesses. Suppose a wealth management portal hosts several asset management companies (AMCs). In order for end users to invest, the portal must provide the facility to make payments to the AMCs. If the portal partners with a payment aggregator, it will be called a merchant and can create sub-merchant accounts for the AMCs. This will enable the Portal to manage payments on behalf of the AMC.<\/p>\n\n\n\n
The payment aggregator's AMC account (i.e. sub-merchant account) will be a current account.The AMC will be able to transact and access its account details using its own set of API keys and a separate dashboard.<\/p>\n\n\n\n
If partnering with a payment aggregator, merchants can add sub-merchants by adding their name and email or sharing a referral link from the dashboard. Partners can also onboard sub-merchants through the API. Sub-merchants can complete the KYC process through the partner's dashboard itself.<\/p>\n\n\n\n
2. Secure payment processing<\/p>\n\n\n\n
Payment-related information is highly sensitive and needs to be handled with extreme care. Leakage of this data could have serious consequences for the business. To ensure information security, payment aggregators:<\/p>\n\n\n\n Invest in the highest quality infrastructure.\n\n\n\n No sensitive information is stored.\n\n\n\n Encrypts sensitive data to prevent unauthorised access.\n\n\n\n Marks digital card numbers to prevent disclosure.\n\n\n\n Increase security to meet compliance requirements set by organisations such as the PCI Council and ISO.\n
3. Fraud detection and prevention<\/p>\n\n\n\n
If a business or individual is tricked into sharing their account information and passwords, they could lose money. To solve this problem, Payment Aggregator follows the guidelines below:<\/p>\n\n\n\n Payment aggregators study a customer's payment history and previously detected fraudulent transactions.\n\n\n\n They use machine learning to discover patterns in customer transactions and common characteristics of fraudulent transactions.\n\n\n\n They maintain and process all card-related data in compliance with PCI-DSS guidelines and RBI regulations.\n
4. Multiple payment options<\/p>\n\n\n\n
A limited number of payment options can create barriers to customer payments. When a business integrates with a payment aggregator, merchants can accept payments through debit cards, credit cards, NetBanking, UPI, credit or debit card EMIs, e-wallets, card-less EMIs, bank transfers, e-authorisations, buy now, pay later (BNPL) services and other payment options.<\/p>\n\n\n\n
5. Rapid settlement<\/p>\n\n\n\n
Payment delays can be annoying to customers, can lead to cash flow crunches and result in the loss of customers due to temporary shortfalls in working capital. To solve this problem, Payment Aggregator offers instant settlement of fees even during non-banking hours, weekends and bank holidays. Funds will be transferred to your business within seconds. You also have the option of same day settlement at a lower cost while still managing your cash flow effectively.<\/p>\n\n\n\n
6. Seamless checkout experience<\/p>\n\n\n\n
Having a seamless checkout page with no complicated steps is important to ensure that customers don't drop out in the middle of a transaction. However, various authentication models and numerous payment methods, policies and regulations make this a daunting task. Payment aggregators, whose primary function is to ensure quick payments, can make the necessary investments to create a seamless checkout experience.<\/p>\n\n\n\n
7. Customer support<\/p>\n\n\n\n
Payment aggregators have invested heavily in customer support teams that are adept at understanding and dealing with the various complaints and obstacles that customers encounter. Some end users may need to track payment status or view past payments. Merchants may need to report fraud, file a dispute, or may need some technical help, such as how to generate an API key. All such queries are handled with patience and flexibility by experienced and skilled professionals.<\/p>\n\n\n\n
How do payment aggregators work?<\/span><\/h3>\n\n\n\n Payment aggregators act as an intermediary between customers, businesses and financial institutions, facilitating online payments through a variety of payment methods on the same website or app. They enable businesses to collect money from a large number of customers and make payments to suppliers, employees and other stakeholders.<\/p>\n\n\n\n
Step 1: Merchant Onboarding<\/p>\n\n\n\n
Before processing any transaction, a business has to open a merchant account with the payment aggregator. The payment aggregator has a node account with the bank where all the transactions of its customers are processed. The bank that provides the node account has no way of knowing why funds are moving in and out of the node account; they will only see the volume of funds flowing.<\/p>\n\n\n\n
Step 2: The customer goes to the payment window<\/p>\n\n\n\n
When a customer goes to the payment window, they select a payment method and enter their payment details. This information is flagged by the Payment Aggregator. The payment aggregator will also perform a fraud check at this stage.<\/p>\n\n\n\n
Step 3: Payment aggregator processes transactions in the background<\/p>\n\n\n\n
The payment aggregator sends the transaction information to the bank where its node accounts are located. The bank then sends the customer information to the credit card company via the payment processor.<\/p>\n\n\n\n
Step 4: Fraud check<\/p>\n\n\n\n
At this stage, credit card companies perform fraud checks based on the customer's past spending behaviour. Some credit card companies may also analyse databases of aggregated credit card user transaction data to look for patterns of fraud. Once the fraud check is complete, the transaction information is sent to the customer's bank.<\/p>\n\n\n\n
Step 5: Client's bank processes the payment request<\/p>\n\n\n\n
The customer's bank receives the transaction information and verifies that the customer has sufficient funds for the transaction and that the customer's details are accurate. The transaction status (approved or declined) is sent back through the same channel as the source of the transaction information, i.e., from the customer's bank to the credit card network, to the payment aggregator's bank, to the payment aggregator, to the business\/merchant. The merchant ultimately passes on the status to the customer.<\/p>\n\n\n\n
Step 6: Payment aggregator banks request funds<\/p>\n\n\n\n
Once the transaction is approved, the payment aggregator bank will request funds from the client bank. The funds will be stored in the node account mentioned earlier.<\/p>\n\n\n\n
Step 7: Payment of Aggregator Settlement Funds<\/p>\n\n\n\n
At the end of the day, the payment aggregator will settle all payments received that day in one go on behalf of your business. Some payment aggregators may also offer instant settlement.<\/p>\n\n\n\n
Types of Payment Aggregators in India<\/span><\/h3>\n\n\n\n Bank Payment Aggregator<\/span>\n\n\n\n Bank Payment Aggregator facilitates online payments from different payment methods. Since it is operated by a bank, it does not requireRBI<\/a>of further authorisation.<\/p>\n\n\n\n Bank payment aggregators tend to cost more to set up. They may require an investment of time and money in integration. While large organisations can afford the cost and effort of integration, small businesses and startups may find it difficult. These aggregators may not offer services such as analytics.<\/p>\n\n\n\n Third Party Payment Aggregator<\/span>\n\n\n\n Third party payments<\/a>Aggregators are non-banking payment aggregators which require authorisation from RBI to operate. Third party payment aggregators bear the technical and operational burden involved in managing payments from different payment methods. They tend to be cheaper than bank payment aggregators due to lower maintenance costs and annual management fees. They tend to be easier to integrate, which makes them suitable for small businesses. Third-party payment aggregators offer a variety of services, such as adding sub-merchants and providing analytics dashboards.<\/p>\n\n\n\n Key differences between payment aggregators and payment gateways<\/span><\/h3>\n\n\n\n According to the Reserve Bank of India, both payment aggregators and gateways facilitate online payments, but only payment aggregators handle the funds.Payment Gateway<\/a>It is known as the technology infrastructure provider for online payments. As a result, the Reserve Bank of India has made its guidelines for payment aggregators more stringent.<\/p>\n\n\n\n Payment AggregatorPayment GatewayDefinitionThird party provider that offers a unified platform for processing multiple payment methods. Communication software that acts as an intermediary between customers and commercial banks. Primary focus payment acceptance and service delivery. Data security and transaction validation. Functions collect customer data and process transactions through its own MID. Transmits encrypted payment data and validates transactions. Relationships with banks provide individual MIDs and bank accounts. Requires own MID and bank account. Examples Razorpay, Mobikwik, AirpayRazorpay, PayU, CC Avenue
Payment aggregator fromReserve Bank of India<\/a>Obtain an aggregator licence for acquiring merchants and providing them with the infrastructure to accept and disburse digital payments.<\/p>\n\n\n\n To enable various payment methods on its own, the enterprise has to liaise with various banks andNon-Banking Financial Companies<\/a> (In India, however, there are 34 nationalised banks and 9,680 banks in the country. However, in India, there are 34 nationalised banks and 9,680 NBFC<\/a>. Not every business has the ability to work with such a large organisation, and this is where payment aggregators essentially act as a middleman between individual businesses and financial institutions.<\/p>\n\n\n\n Payment aggregators relieve merchants of the technical burden of designing and building checkout pages that fit perfectly with various payment methods.<\/p>\n\n\n\n Recommended Reading:Non-Banking Financial Corporation of India NBFC<\/a><\/p>\n\n\n\n Payment aggregators offer a variety of benefits, addressing key aspects such as secure handling of payment data and fraud detection and prevention. Payment aggregators also enable end users to access multiple payment methods and enjoy a seamless checkout experience. Let's take a closer look at these and many other key features:<\/p>\n\n\n\n 1. Seamless onboarding, integration and sub-merchant accounts<\/p>\n\n\n\n In e-commerce, services are sometimes provided by co-operation between businesses. Suppose a wealth management portal hosts several asset management companies (AMCs). In order for end users to invest, the portal must provide the facility to make payments to the AMCs. If the portal partners with a payment aggregator, it will be called a merchant and can create sub-merchant accounts for the AMCs. This will enable the Portal to manage payments on behalf of the AMC.<\/p>\n\n\n\n The payment aggregator's AMC account (i.e. sub-merchant account) will be a current account.The AMC will be able to transact and access its account details using its own set of API keys and a separate dashboard.<\/p>\n\n\n\n If partnering with a payment aggregator, merchants can add sub-merchants by adding their name and email or sharing a referral link from the dashboard. Partners can also onboard sub-merchants through the API. Sub-merchants can complete the KYC process through the partner's dashboard itself.<\/p>\n\n\n\n 2. Secure payment processing<\/p>\n\n\n\n Payment-related information is highly sensitive and needs to be handled with extreme care. Leakage of this data could have serious consequences for the business. To ensure information security, payment aggregators:<\/p>\n\n\n\n Invest in the highest quality infrastructure.\n\n\n\n No sensitive information is stored.\n\n\n\n Encrypts sensitive data to prevent unauthorised access.\n\n\n\n Marks digital card numbers to prevent disclosure.\n\n\n\n Increase security to meet compliance requirements set by organisations such as the PCI Council and ISO.\n 3. Fraud detection and prevention<\/p>\n\n\n\n If a business or individual is tricked into sharing their account information and passwords, they could lose money. To solve this problem, Payment Aggregator follows the guidelines below:<\/p>\n\n\n\n Payment aggregators study a customer's payment history and previously detected fraudulent transactions.\n\n\n\n They use machine learning to discover patterns in customer transactions and common characteristics of fraudulent transactions.\n\n\n\n They maintain and process all card-related data in compliance with PCI-DSS guidelines and RBI regulations.\n 4. Multiple payment options<\/p>\n\n\n\n A limited number of payment options can create barriers to customer payments. When a business integrates with a payment aggregator, merchants can accept payments through debit cards, credit cards, NetBanking, UPI, credit or debit card EMIs, e-wallets, card-less EMIs, bank transfers, e-authorisations, buy now, pay later (BNPL) services and other payment options.<\/p>\n\n\n\n 5. Rapid settlement<\/p>\n\n\n\n Payment delays can be annoying to customers, can lead to cash flow crunches and result in the loss of customers due to temporary shortfalls in working capital. To solve this problem, Payment Aggregator offers instant settlement of fees even during non-banking hours, weekends and bank holidays. Funds will be transferred to your business within seconds. You also have the option of same day settlement at a lower cost while still managing your cash flow effectively.<\/p>\n\n\n\n 6. Seamless checkout experience<\/p>\n\n\n\n Having a seamless checkout page with no complicated steps is important to ensure that customers don't drop out in the middle of a transaction. However, various authentication models and numerous payment methods, policies and regulations make this a daunting task. Payment aggregators, whose primary function is to ensure quick payments, can make the necessary investments to create a seamless checkout experience.<\/p>\n\n\n\n 7. Customer support<\/p>\n\n\n\n Payment aggregators have invested heavily in customer support teams that are adept at understanding and dealing with the various complaints and obstacles that customers encounter. Some end users may need to track payment status or view past payments. Merchants may need to report fraud, file a dispute, or may need some technical help, such as how to generate an API key. All such queries are handled with patience and flexibility by experienced and skilled professionals.<\/p>\n\n\n\n Payment aggregators act as an intermediary between customers, businesses and financial institutions, facilitating online payments through a variety of payment methods on the same website or app. They enable businesses to collect money from a large number of customers and make payments to suppliers, employees and other stakeholders.<\/p>\n\n\n\n Step 1: Merchant Onboarding<\/p>\n\n\n\n Before processing any transaction, a business has to open a merchant account with the payment aggregator. The payment aggregator has a node account with the bank where all the transactions of its customers are processed. The bank that provides the node account has no way of knowing why funds are moving in and out of the node account; they will only see the volume of funds flowing.<\/p>\n\n\n\n Step 2: The customer goes to the payment window<\/p>\n\n\n\n When a customer goes to the payment window, they select a payment method and enter their payment details. This information is flagged by the Payment Aggregator. The payment aggregator will also perform a fraud check at this stage.<\/p>\n\n\n\n Step 3: Payment aggregator processes transactions in the background<\/p>\n\n\n\n The payment aggregator sends the transaction information to the bank where its node accounts are located. The bank then sends the customer information to the credit card company via the payment processor.<\/p>\n\n\n\n Step 4: Fraud check<\/p>\n\n\n\n At this stage, credit card companies perform fraud checks based on the customer's past spending behaviour. Some credit card companies may also analyse databases of aggregated credit card user transaction data to look for patterns of fraud. Once the fraud check is complete, the transaction information is sent to the customer's bank.<\/p>\n\n\n\n Step 5: Client's bank processes the payment request<\/p>\n\n\n\n The customer's bank receives the transaction information and verifies that the customer has sufficient funds for the transaction and that the customer's details are accurate. The transaction status (approved or declined) is sent back through the same channel as the source of the transaction information, i.e., from the customer's bank to the credit card network, to the payment aggregator's bank, to the payment aggregator, to the business\/merchant. The merchant ultimately passes on the status to the customer.<\/p>\n\n\n\n Step 6: Payment aggregator banks request funds<\/p>\n\n\n\n Once the transaction is approved, the payment aggregator bank will request funds from the client bank. The funds will be stored in the node account mentioned earlier.<\/p>\n\n\n\n Step 7: Payment of Aggregator Settlement Funds<\/p>\n\n\n\n At the end of the day, the payment aggregator will settle all payments received that day in one go on behalf of your business. Some payment aggregators may also offer instant settlement.<\/p>\n\n\n\n Bank Payment Aggregator facilitates online payments from different payment methods. Since it is operated by a bank, it does not requireRBI<\/a>of further authorisation.<\/p>\n\n\n\n Bank payment aggregators tend to cost more to set up. They may require an investment of time and money in integration. While large organisations can afford the cost and effort of integration, small businesses and startups may find it difficult. These aggregators may not offer services such as analytics.<\/p>\n\n\n\n Third Party Payment Aggregator<\/span>\n\n\n\n Third party payments<\/a>Aggregators are non-banking payment aggregators which require authorisation from RBI to operate. Third party payment aggregators bear the technical and operational burden involved in managing payments from different payment methods. They tend to be cheaper than bank payment aggregators due to lower maintenance costs and annual management fees. They tend to be easier to integrate, which makes them suitable for small businesses. Third-party payment aggregators offer a variety of services, such as adding sub-merchants and providing analytics dashboards.<\/p>\n\n\n\n According to the Reserve Bank of India, both payment aggregators and gateways facilitate online payments, but only payment aggregators handle the funds.Payment Gateway<\/a>It is known as the technology infrastructure provider for online payments. As a result, the Reserve Bank of India has made its guidelines for payment aggregators more stringent.<\/p>\n\n\n\n Payment AggregatorPayment GatewayDefinitionThird party provider that offers a unified platform for processing multiple payment methods. Communication software that acts as an intermediary between customers and commercial banks. Primary focus payment acceptance and service delivery. Data security and transaction validation. Functions collect customer data and process transactions through its own MID. Transmits encrypted payment data and validates transactions. Relationships with banks provide individual MIDs and bank accounts. Requires own MID and bank account. Examples Razorpay, Mobikwik, AirpayRazorpay, PayU, CC AvenueKey Features of Payment Aggregator India<\/span><\/h3>\n\n\n\n
How do payment aggregators work?<\/span><\/h3>\n\n\n\n
Types of Payment Aggregators in India<\/span><\/h3>\n\n\n\n Bank Payment Aggregator<\/span>\n\n\n\n
Key differences between payment aggregators and payment gateways<\/span><\/h3>\n\n\n\n