What is a Payment Aggregator? Do Merchants Need One?
Blog post from Basis Theory
Payment aggregators let businesses accept payments quickly by operating as sub-merchants under the aggregator’s merchant account, removing the need to establish direct acquiring-bank and payment-gateway relationships. They simplify a complex payment flow involving merchants, processors, gateways, card networks, issuing banks, and acquiring banks, often requiring little more than adding a payment link or integration. In exchange for this convenience, aggregators commonly charge predictable flat-plus-percentage fees that can become costly at higher volumes compared with interchange-plus pricing, while refunds, chargebacks, currency conversion, and other less transparent charges may further increase expenses. Merchants also face concentration risk because an aggregator can restrict or terminate access to payment services, sometimes with limited explanation. Alternatives include building an independent payment infrastructure with merchant accounts and multiple gateways, which is generally practical only for high-volume businesses, or using multiple payment service providers to diversify risk and optimize transaction routing. Tokenization services can support the latter approach by securely storing payment data and allowing merchants to send it to different processors according to cost, approval rates, or available payment methods.
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