{"id":3169,"date":"2026-05-25T11:00:15","date_gmt":"2026-05-25T05:30:15","guid":{"rendered":"https:\/\/cashfree.com\/blog\/?p=3169"},"modified":"2026-05-25T11:01:38","modified_gmt":"2026-05-25T05:31:38","slug":"payment-aggregators","status":"publish","type":"post","link":"https:\/\/blogrevamp.cashfree.com\/payment-aggregators\/","title":{"rendered":"What Is a Payment Aggregator? Meaning, Features &amp; How It Works"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #005c31;color:#005c31\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #005c31;color:#005c31\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/blogrevamp.cashfree.com\/payment-aggregators\/#Payment_Aggregator_Example_The_Analogy_You_Need\" >Payment Aggregator Example: The Analogy You Need<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/blogrevamp.cashfree.com\/payment-aggregators\/#How_Do_Payment_Aggregators_Work\" >How Do Payment Aggregators Work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/blogrevamp.cashfree.com\/payment-aggregators\/#Types_of_Payment_Aggregators_In_India\" >Types of Payment Aggregators In India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/blogrevamp.cashfree.com\/payment-aggregators\/#Features_of_Online_Payment_Aggregators\" >Features of Online Payment Aggregators<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/blogrevamp.cashfree.com\/payment-aggregators\/#Payment_Aggregators_vs_Payment_Gateways\" >Payment Aggregators vs Payment Gateways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/blogrevamp.cashfree.com\/payment-aggregators\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/blogrevamp.cashfree.com\/payment-aggregators\/#FAQs_on_Payment_Aggregator\" >FAQs on Payment Aggregator<\/a><\/li><\/ul><\/nav><\/div>\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">A payment aggregator is a service provider that helps businesses accept online payments without needing a separate merchant account. It collects payments from customers and transfers them to the merchant\u2019s bank account after processing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Simply put, a payment aggregator connects customers, businesses, banks, and payment networks to enable smooth online transactions.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">A payment aggregator serves as a strong bridge between merchants and customers, ensuring the seamless, secure transfer of funds from one account to the other. It is a third-party service provider that allows customers to securely send money on the website or the app to a merchant account. The payment aggregator acts as a payment solution for both parties. With the help of payment aggregators, a customer can send a payment using any payment method, such as credit card, debit card, e-wallet, EMI, bank transfer, or e-mandate, or set up a buy now, pay later plan.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Every payment aggregator requires a valid RBI licence to acquire merchants and enable a secure backend system or infrastructure that helps both customers and merchants to pay and accept payments without disruption.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once the payment is made, it is collected into a sub-merchant account, handled by the payment aggregator. Once payment is received in that sub-merchant account, it gets eventually settled in the merchant\u2019s account, reducing the risk of fraud or loss of important financial details.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A payment aggregator in India is incorporated under the Companies Act, 1956\/2013.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<span class=\"embed-youtube\" style=\"text-align:center; display: block;\"><iframe class=\"youtube-player\" width=\"770\" height=\"434\" src=\"https:\/\/www.youtube.com\/embed\/fRVHTY_aT9U?version=3&#038;rel=1&#038;showsearch=0&#038;showinfo=1&#038;iv_load_policy=1&#038;fs=1&#038;hl=en-US&#038;autohide=2&#038;wmode=transparent\" allowfullscreen=\"true\" style=\"border:0;\" sandbox=\"allow-scripts allow-same-origin allow-popups allow-presentation allow-popups-to-escape-sandbox\"><\/iframe><\/span>\n<\/div><\/figure>\n\n\n\n<h2 id=\"payment-aggregator-example-the-analogy-you-need\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Payment_Aggregator_Example_The_Analogy_You_Need\"><\/span>Payment Aggregator Example: The Analogy You Need<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Payment aggregator or merchant aggregators are <mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong><a href=\"https:\/\/www.cashfree.com\/payment-gateway-india\/?utm_source=blog&amp;utm_medium=paymentaggregatorblog\" target=\"_blank\" rel=\"noreferrer noopener\">platforms that help you offer various payment options<\/a><\/strong><\/mark> in one place.\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But let\u2019s simplify things with an analogy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let us say you own a shop that sells clothes. You\u2019ve been thinking of expanding out of India for a while now. So, you decide on building shops in London and China.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, making clothes require factories, raw materials, chemical colours and lots more. While other things are manageable, building a factory in every part of the world is virtually impossible! So, you decide to outsource and hire clothes factories on rent. Now, you can focus on building good quality clothes, without worrying about the funding for new factories the world over.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is <strong>literally <\/strong>all there is. The clothing business is synonymous with your business. The outsourced factory is the third party payment aggregator.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s take the payment aggregator example here to bring it into context.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s assume you\u2019re a merchant looking to offer net banking payment options to your customer. <strong><em>(Just like the clothes merchant looking to expand his business)<\/em><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Now, you cannot tie up with different banks as that would entail a lot of time in due diligence and integration procedures. Moreover, It would require a lot of capital.<strong> <\/strong><strong><em>(Building a factory is a lot of work- and resources!)<\/em><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is where a <a href=\"https:\/\/www.cashfree.com\/?utm_source=blog&amp;utm_medium=paymentaggregatorblog\" target=\"_blank\" rel=\"noreferrer noopener\"><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">payment aggregator<\/mark><\/strong><\/a> comes into play. A PA can offer you various payment options like cards, net banking, <a href=\"https:\/\/www.cashfree.com\/upi-payment-gateway\/?utm_source=blog&amp;utm_medium=paymentaggregatorblog\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>UPI<\/strong><\/mark><\/a>, wallets, EMI, <a href=\"https:\/\/www.cashfree.com\/buy-now-pay-later\/?utm_source=blog&amp;utm_medium=paymentaggregatorblog\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>Pay Later<\/strong><\/mark><\/a> etc. under one roof.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In simple terms,<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><em>Outsource the factory=Trust a reliable payment aggregator<\/em><\/strong><\/p>\n\n\n\n<h2 id=\"how-do-payment-aggregators-work\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Do_Payment_Aggregators_Work\"><\/span>How Do Payment Aggregators Work?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Below are the steps in which a payment aggregator helps a merchant&#8217;s business to accept online payments seamlessly and securely.<\/p>\n\n\n\n<h3 id=\"payment-aggregator-provides-merchant-account\" class=\"wp-block-heading\"><strong>Payment Aggregators Onboard a Merchant<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Before any transaction is made, the payment aggregator <a href=\"https:\/\/www.cashfree.com\/blog\/merchant-payment-meaning-process-fees\/\">opens a merchant account<\/a>, and every payment is first received in the nodal account.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once the payment is successfully and securely received in the nodal account, the amount is transferred to the merchant account.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A <a href=\"https:\/\/www.cashfree.com\/blog\/nodal-account\/\">nodal account<\/a> is a special account mandated by the Reserve Bank of India, where payment aggregators act as intermediaries, temporarily holding funds on behalf of merchants.<\/p>\n\n\n\n<h3 id=\"customer-heads-to-checkout\" class=\"wp-block-heading\"><strong>Customer Heads to Checkout Page<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The payment gateway tokenises or encrypts these payment details. The customer is given the choice of mode of payment, like through UPI, cards, net banking, wallets or EMI options. The <a href=\"https:\/\/www.cashfree.com\/blog\/payment-mode-types\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">payment mode<\/mark><\/a>, once chosen, is then verified by the payment aggregator, in which they ensure it is free from fraud before the final <a href=\"https:\/\/www.cashfree.com\/blog\/top-6-digital-app-checkouts\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">checkout<\/mark><\/a> is processed.<\/p>\n\n\n\n<h3 id=\"pa-s-acquirer-receives-transaction-information\" class=\"wp-block-heading\">Payment Aggreagtor Acquirer Receives Transaction Information<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The <mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">payment aggregator<\/mark> works in the background while this process takes place. The transaction information is sent to the payment aggregator\u2019s acquiring bank\/acquirer.\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After checking the details, the acquirer sends the customer information to the respective card company via the payment processor.<\/p>\n\n\n\n<h3 id=\"card-company-runs-fraud-check\" class=\"wp-block-heading\">Card Company Runs Fraud Check<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Every card is issued by a card company like Visa, Mastercard or American Express. The card company verifies if the card is actually issued by them and runs a fraud check. Thereafter, it forwards the information to the Issuer Bank through the payment processor.<\/p>\n\n\n\n<h3 id=\"issuer-accepts-declines-the-transaction\" class=\"wp-block-heading\">Issuer Accepts\/Declines the Transaction<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The Issuing Bank or the Issuer is the customer\u2019s bank. This bank verifies the customer\u2019s details and checks if the customer has sufficient funds in their account.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After this, it sends a transaction approval or denial message to the card network. From here on, the information of transaction approval is passed through the same route it came from:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Issuer&gt; Card Networks&gt; Acquiring Bank&gt; Payment Gateway<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The payment gateway informs the merchant about the transaction status. In turn, the merchant informs the customer.&nbsp;<\/p>\n\n\n\n<h3 id=\"acquirer-requests-for-funds\" class=\"wp-block-heading\">Acquirer Requests For Funds&nbsp;<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Now, this is what happened behind the scenes. Once the transaction is approved, the acquirer asks for funds from the Issuer. As we mentioned before, this is the acquiring bank connected to the payment aggregator.<\/p>\n\n\n\n<h3 id=\"payment-aggregator-settles-funds\" class=\"wp-block-heading\">Payment Aggregators Settle Funds<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The payment aggregator settles the funds in the merchant account. The settlement may be standard i.e. it requires T+ 2 to 4 days. On the other hand, the <a href=\"https:\/\/www.cashfree.com\/instant-settlements\/?utm_source=blog&amp;utm_medium=paymentaggregatorblog\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">settlement<\/mark><\/a> can be instant which can be as fast as 15 minutes!<\/p>\n\n\n\n<h2 id=\"types-of-payment-aggregators-in-india\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Payment_Aggregators_In_India\"><\/span>Types of Payment Aggregators In India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Online payment aggregators in India can be of two types: They can either be a private platform or a PA provided by banks.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before the early 2000s. Only banks are used to provide payment aggregator services. However, most merchants were looking for technological advances in payment solutions. Third-party payment aggregators filled the void by disrupting the market with innovative solutions.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Having said that, let\u2019s study the two types of payment aggregators in detail.&nbsp;<\/p>\n\n\n\n<h3 id=\"third-party-payment-aggregator\" class=\"wp-block-heading\">Third-Party Payment Aggregators<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Newsflash: <mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong><a href=\"https:\/\/www.cashfree.com\/solutions\/ecommerce-payment-gateway\/?utm_source=blog&amp;utm_medium=paymentaggregatorblog\" target=\"_blank\" rel=\"noreferrer noopener\">eCommerce<\/a><\/strong><\/mark> sales are growing at an unprecedented rate. E-commerce sales are expected to hit <em>USD 8.1 trillion by 2026<\/em><sup><a href=\"https:\/\/www.statista.com\/statistics\/379046\/worldwide-retail-e-commerce-sales\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">2<\/a><\/sup>. In fact, even after the pandemic, India saw a <em><strong>36% increase in eCommerce orders in the last quarter of 2020<\/strong><\/em><sup><a href=\"https:\/\/www.ibef.org\/industry\/ecommerce-presentation\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">3<\/a><\/sup> and <em>expects to reach USD 350 billion by 2030<\/em>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This goes to show the important role payment aggregators will play in the future of eCommerce.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Most businesses are attracted to third party PAs because of their innovative payment products. Moreover, they have user-friendly features like seamless onboarding, a dashboard and reliable customer support.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Most of them charge low <strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><a href=\"https:\/\/www.cashfree.com\/payment-gateway-charges\/\" target=\"_blank\" rel=\"noreferrer noopener\">Transaction Discount Rates (TDR)<\/a><\/mark><\/strong>, annual fees and charging setups. In fact, there are some third party payment aggregators that are even more budget-friendly. For instance, <strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><a href=\"https:\/\/www.cashfree.com\/?utm_source=blog&amp;utm_medium=paymentaggregatorblog\" target=\"_blank\" rel=\"noreferrer noopener\">Cashfree<\/a><\/mark><\/strong> charges zero setup fees or annual maintenance charges (AMC).&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><a href=\"https:\/\/www.cashfree.com\/blog\/payment-gateway-charges-india-free-payment-gateway\/?utm_source=blog&amp;utm_medium=paymentaggregatorblog\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><em>Related Read: Payment gateway charges India: Busting the free payment gateway myth<\/em><\/mark><\/a><\/strong><\/p>\n\n\n\n<h3 id=\"bank-payment-aggregator\" class=\"wp-block-heading\">Bank Payment Aggregators<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">These payment aggregators have high set-up costs and are harder to integrate. Their payment modes are not comprehensive. Moreover, reporting and analytics features are not present.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They are not suitable for startups and small businesses as they can prove to be expensive initially. Usually, large enterprises that want to work with multiple service providers use bank payment aggregators.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><em>Related Read: <\/em><\/mark><\/strong><a href=\"https:\/\/www.cashfree.com\/blog\/multiple-payment-gateways\/?utm_source=blog&amp;utm_medium=paymentaggregatorblog\" target=\"_blank\" rel=\"noreferrer noopener\"><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><em>Multiple Payment Gateways<\/em><\/mark><\/strong><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Now that we have covered the types of PAs, next move on to the next topic.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What exactly is the benefit of online payment aggregators? How do they help merchants? (apart from the obvious cost-saving reasons)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Well, let\u2019s find out.<\/p>\n\n\n\n<h2 id=\"features-of-online-payment-aggregator\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Features_of_Online_Payment_Aggregators\"><\/span>Features of Online Payment Aggregators<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Online payment aggregators have become the backbone of digital commerce, especially in a fast-growing digital economy like India. In simple terms, they collect payments from customers on behalf of merchants and settle the funds after processing. Below is a detailed explanation of the key features of online payment aggregators.<\/p>\n\n\n\n<h3 id=\"easy-onboarding-and-sub-merchant-account\" class=\"wp-block-heading\">Easy Onboarding and Sub-Merchant Account<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A payment aggregator can help set up a sub-merchant account that is mandatory and necessary in order to accept payments from customers.<\/li>\n\n\n\n<li>Payment aggregators offer simplified onboarding and skip unnecessary heavy documentation or approval processes.&nbsp;<\/li>\n\n\n\n<li>There is minimal paperwork, fast approval timelines, digital KYC for swift and quick onboarding, and no need for merchants to register for individual bank registrations.&nbsp;<\/li>\n\n\n\n<li>Small businesses, startups, freelancers, and D2C brands can start accepting payments quickly without technical or banking complexity.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"highly-secure\" class=\"wp-block-heading\">Highly Secure<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A trustworthy and renowned payment aggregator provides the utmost care in handling and preventing fraud and data breaches.&nbsp;<\/li>\n\n\n\n<li>Payment aggregators are a one-man army, as they provide complete support to the merchant, ensuring their payments are received seamlessly.<\/li>\n\n\n\n<li>Payment aggregators are already PCI-DSS compliant and provide hosted checkout pages in order to avoid storing customer card information on the merchant\u2019s portal and instead use tokenisation, where tokens are useless outside the secure payment environment, thereby ensuring safety for recurring payments.<\/li>\n\n\n\n<li>The payment aggregators handle encryption and secure transmission of card data&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 id=\"instant-refunds\" class=\"wp-block-heading\">Instant Refunds<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">According to a recent survey by Cashfree, <a href=\"https:\/\/cashfree.com\/blog\/online-refunds-from-weeks-to-seconds\/#Solving_refunds_at_Cashfree\/?utm_source=blog&amp;utm_medium=paymentaggregatorblog\" target=\"_blank\" rel=\"noreferrer noopener\"><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">17% of customers<\/mark><\/strong><\/a><strong> ask for a refund<\/strong>. Moreover, they prefer the refund to be instant and through IMPS, wallet or UPI.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Following the traditional method of refund, it usually takes around 7-10 business days for the refund to successfully reflect in the customer&#8217;s account. And manually handling refunds and customer disputes can be quite time-consuming, hence the built-in systems.<\/li>\n\n\n\n<li>With the right payment aggregators, refunds are a piece of cake \u2013 simple, smooth, and seamless.<\/li>\n\n\n\n<li>The customer raises a refund request, and the payment aggregator pushes the payment after providing appropriate solutions, instead of asking the bank to refund.&nbsp;<\/li>\n\n\n\n<li>Payment aggregators offer automated refunds, partial refunds, and cashback as refunds, depending upon the payout solution, leading to better customer experience and reduced operational burden.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"instant-settlements\" class=\"wp-block-heading\">Instant Settlements<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>As per payment aggregators&#8217; policies and agreement with the merchant, the merchant\u2019s payment from the customer is received in T+2 days after the payment aggregator deducts.<\/li>\n\n\n\n<li>The payment aggregator offers scheduled and instant settlement options before releasing funds to the merchant account. This is done after a transparent fee deduction.<\/li>\n\n\n\n<li>Instant settlements of payments help to improve cash flow management for businesses, especially MSMEs and online sellers.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"excellent-customer-support\" class=\"wp-block-heading\">Dedicated Customer Support<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Payment aggregators provide a dedicated account manager for mid- to large merchants and technical support available to you 24&#215;7.&nbsp;<\/li>\n\n\n\n<li>The payment aggregator\u2019s technical team and dedicated account manager will be there to support you throughout your onboarding process and resolve any roadblocks on priority.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Real-Time Dashboard and Tracking<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Payment aggregators provide live transaction tracking and settlement reports.<\/li>\n\n\n\n<li>Every merchant is provided with a dashboard that tracks payment success rates and reasons for payment failures.&nbsp;<\/li>\n\n\n\n<li>With the support of payment aggregators, the merchant can instantly check and resolve cases where money has been deducted but not received.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"payment-aggregator-vs-payment-gateways\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Payment_Aggregators_vs_Payment_Gateways\"><\/span>Payment Aggregators vs Payment Gateways<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A Payment Aggregator offers the customers various payment options so a merchant does not need a separate integration system. A payment gateway (PG) is a company that provides technology infrastructure to facilitate online payment processing.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Basis of Comparison<\/strong><\/td><td><strong>Payment Aggregators<\/strong><\/td><td><strong>Payment Gateway<\/strong><\/td><\/tr><tr><td><strong>Core Function<\/strong><\/td><td>Serves as a middleman, collecting payments from clients and transferring money to retailers on their behalf.<\/td><td>Supplies the technologies needed to safely approve and handle internet payments.<\/td><\/tr><tr><td><strong>Merchant account Specifications<\/strong><\/td><td>Enables the onboarding of several companies under one roof using a shared master merchant account.<\/td><td>Usually necessitates the merchant having a bank account specifically for their business.<\/td><\/tr><tr><td><strong>Onboarding Process<\/strong><\/td><td>It helps to onboard a merchant in a quick and seamless order with minimal documentation and simplified digital KYC.<\/td><td>Onboarding depends on acquiring bank requirements and may take longer.<\/td><\/tr><tr><td><strong>Settlement of Funds<\/strong><\/td><td>Money is collected, and then fees (T+1, T+2, etc.) are deducted before paying the merchant.<\/td><td>Does not hold funds; funds are directly settled by the bank into the merchant\u2019s account.<br><\/td><\/tr><tr><td><strong>Regulatory Compliance<\/strong><\/td><td>In charge of merchant risk management, KYC verification, and regulatory compliance.<\/td><td>Emphasises mainly security standards such as PCI-DSS over complete merchant compliance.<\/td><\/tr><tr><td><strong>Risk and fraud Management<\/strong><\/td><td>Closely monitors merchants&#8217; transactions and assumes certain financial risks.<\/td><td>It keeps a check on fraud detection through relevant detection tools and does not assume any merchant financial risk.<\/td><\/tr><tr><td><strong>What suits whom?<\/strong><\/td><td>If your business is a startup, MSM, small business, or D2C brand that wants a quick setup, then a payment aggregator is a better provider.<\/td><td>If own a large enterprise that prefers direct bank relationships and more control over your transactions and do not rely much on providers, then this is a better provider choice.&nbsp;&nbsp;<\/td><\/tr><tr><td><strong>Example<\/strong><\/td><td>Cashfree Payments<\/td><td>PayPal, CCAvenue<\/td><\/tr><tr><td><strong>Point of Control&nbsp;<\/strong><\/td><td>Less direct control over acquiring bank, as the payment aggregator manages the bank partnerships on your behalf,<\/td><td>Provides greater control if you choose direct integration with the acquiring banks.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The main difference between a payment aggregator and a <a href=\"https:\/\/www.cashfree.com\/payment-gateway-india\/?utm_source=blog&amp;utm_medium=paymentaggregatorblog\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">payment gateway<\/mark><\/a> is this. A payment aggregator handles funds, while the gateway only provides the technology.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><em><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">Related Read: <a href=\"https:\/\/www.cashfree.com\/blog\/difference-between-payment-gateway-and-payment-processor\/?utm_source=blog&amp;utm_medium=paymentaggregatorblog\" target=\"_blank\" rel=\"noreferrer noopener\">Payment Gateway vs Payment Processor<\/a><\/mark><\/em><\/strong><\/p>\n\n\n\n<h2 id=\"conclusion\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Now, before we wrap up this guide, here\u2019s something interesting.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>In India, a payment company can work as a PA with some banks and a payment gateway with others.<\/strong> This is considered a hybrid model.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But I hope this blog gave you a thorough understanding of a payment aggregator and how it is different from a payment gateway.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Do you have any more questions on the topic? <a href=\"https:\/\/www.cashfree.com\/contact-sales\/?utm_source=blog&amp;utm_medium=paymentaggregatorblog\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>Reach out to our experts<\/strong><\/mark><\/a>!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs_on_Payment_Aggregator\"><\/span>FAQs on Payment Aggregator<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">What is a payment aggregator?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A payment aggregator is a licensed third-party provider that enables merchants to accept online payments without opening a separate merchant account, by collecting funds in a nodal account and settling them later.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What is the difference between payment aggregator and payment processor?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A payment aggregator manages merchant onboarding, compliance, and fund settlement, while a payment processor only handles communication between issuing and acquiring banks.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>In case you missed it:<\/strong><\/p>\n\n\n\n<ul><li><a href='https:\/\/www.cashfree.com\/blog\/upi-transaction-limit\/'>UPI Transaction Limit<\/a><\/li><li><a href='https:\/\/www.cashfree.com\/blog\/phonepe-transaction-limit-per-day\/'>Phonepay Transaction Limit<\/a><\/li><li><a href='https:\/\/www.cashfree.com\/blog\/google-pay-transaction-limit\/'>Google Pay Transaction<\/a><\/li><li><a href='https:\/\/www.cashfree.com\/blog\/fintech-companies-in-india\/'>Fintech Companies in India<\/a><\/li><li><a href='https:\/\/www.cashfree.com\/blog\/upi-integration\/'>UPI Integration<\/a><\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Payment aggregators are third parties that help merchants accept customers&#8217; payments. Read how they work &#038; their types, features &#038; examples?<\/p>\n","protected":false},"author":142,"featured_media":6133,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_themeisle_gutenberg_block_has_review":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_wpcom_ai_launchpad_first_post":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1383],"tags":[],"class_list":["post-3169","post","type-post","status-publish","format-standard","has-post-thumbnail","category-payments"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Payment Aggregator: Definition, Examples, Types &amp; Working Process<\/title>\n<meta name=\"description\" content=\"Learn what a payment aggregator is, how it works, RBI rules, types of payment aggregators in India, and payment aggregator vs payment processor explained.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.cashfree.com\/blog\/payment-aggregators\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Payment Aggregator: Definition, Examples, Types &amp; Working Process\" \/>\n<meta property=\"og:description\" content=\"Learn what a payment aggregator is, how it works, RBI rules, types of payment aggregators in India, and payment aggregator vs payment processor explained.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.cashfree.com\/blog\/payment-aggregators\/\" \/>\n<meta property=\"og:site_name\" content=\"Cashfree Blog\" \/>\n<meta property=\"article:published_time\" content=\"2026-05-25T05:30:15+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-05-25T05:31:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/02\/NewTheme_Payment-Aggregator.png?fit=1080%2C720&ssl=1\" \/>\n\t<meta property=\"og:image:width\" content=\"1080\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Rishabh Ranjan\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Rishabh Ranjan\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"11 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Payment Aggregator: Definition, Examples, Types & Working Process","description":"Learn what a payment aggregator is, how it works, RBI rules, types of payment aggregators in India, and payment aggregator vs payment processor explained.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.cashfree.com\/blog\/payment-aggregators\/","og_locale":"en_US","og_type":"article","og_title":"Payment Aggregator: Definition, Examples, Types & Working Process","og_description":"Learn what a payment aggregator is, how it works, RBI rules, types of payment aggregators in India, and payment aggregator vs payment processor explained.","og_url":"https:\/\/www.cashfree.com\/blog\/payment-aggregators\/","og_site_name":"Cashfree Blog","article_published_time":"2026-05-25T05:30:15+00:00","article_modified_time":"2026-05-25T05:31:38+00:00","og_image":[{"width":1080,"height":720,"url":"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/02\/NewTheme_Payment-Aggregator.png?fit=1080%2C720&ssl=1","type":"image\/png"}],"author":"Rishabh Ranjan","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Rishabh Ranjan","Est. reading time":"11 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.cashfree.com\/blog\/payment-aggregators\/#article","isPartOf":{"@id":"https:\/\/blogrevamp.cashfree.com\/payment-aggregators\/"},"author":{"name":"Rishabh Ranjan","@id":"https:\/\/blogrevamp.cashfree.com\/#\/schema\/person\/f062683aff5362102e9c5b7541c1328c"},"headline":"What Is a Payment Aggregator? 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