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What’s A Payment Aggregator And Should My SME Use One?

Stephen Hart

Stephen Hart

Founder - Cardswitcher

Former - Chief Financial Officer @ Worldpay

When you’re starting up a business for the first time, the numerous options to accept payments can feel confusing.

Opting for a traditional merchant account can be time consuming, and in some cases difficult to get accepted for.

In order for these smaller businesses to get going, one emerging method has been to use a payment aggregator.

In this article, we’ll cover what a payment aggregator is, the pros and cons, and how to decide whether it’s right for your business.


What is a payment aggregator

A payment aggregator (aka a merchant aggregator) is essentially a third party payment provider. They allow smaller merchants to start taking different payment methods without the need to set up a merchant account, as they handle the online payment systems and process all online transactions.

Using a payment aggregator is often the cheapest and easiest method for small businesses with low transaction volume to operate. It means small and new companies can get started more quickly, without months of waiting to be approved.


How does it work?

Payment aggregators basically represent a number of merchants, handling all of their transactions.

Where a merchant account means you deal with the contracts between you (the merchant), the merchant acquirer and the payment gateway, a payment aggregator takes care of all of this.

They oversee the contracts with various payment method providers, facilitating payments from customers via their credit card, debit card, e-wallet or bank transfer. In short, they negate the need for merchants to get their own merchant account.


business women discussing work


Pros and cons of using one

Like any payment system you use, a payment aggregator will have both pros and cons depending on your circumstances. We’ve rounded up the main ones you’ll want to consider.



If your priority is to get going without hassle, you’re likely to appreciate the pros that a payment aggregator offers:

  • Simple application process - Compared with the hassle and time required to open a merchant account, setting up with a payment aggregator is quick and easy. Where merchant account applications require PCI compliance and credit checks, the paperwork needed for payment aggregators is relatively minimal.
  • Quick approval - Most payment aggregator applications take just a few days to be approved, meaning you can get set up and operating quickly.
  • Accept payments straight away - As soon as your application is accepted, you can start accepting payments.
  • Flexible contracts - There are typically less fixed contracts with payment aggregators, so there’s no need to worry about being trapped long term into expensive fees.



Though it’s an ideal solution for SMEs with low transactions, the cost can begin to rise with increasing sales. When planning to grow a business quickly, you may be better off with a merchant account from the get go.

Here are our top disadvantages to consider:

  • Potential for slow payments - There’s no set timing for aggregators to settle your funds, so it will vary. Though most merchants can expect to be paid within a couple of days, it’s rarely a firm agreement.
  • Higher transactions mean higher charges - When your transactions increase, unfortunately the payment aggregator charges do too.
  • Lower volume limits - Some volume limits may apply, so if you’re hoping to increase your transactions, it’s worth checking this before you apply.


Is it right for my business?

If you're hoping to build up a small business and get started ASAP, a payment aggregator could be best.

You avoid all of the paperwork and admin of setting up a merchant account, and the hassle of maintaining it. It’s also likely to be cheaper for businesses with only a small number of transactions.

If you’re confident handling merchant services on your own, you may prefer to go with a merchant account. Though you might spend more time negotiating prices and contracts, it’s likely to be cheaper in the long run. Particularly when you’re hoping for a high volume of transactions, a merchant account avoids the limits of a payment aggregator.

Whichever service you decide to go for, CardSwitcher can help you avoid paying over the odds. Just answer 11 quick questions, and get instant quotes from a range of suppliers. With our help, save up to 40% on your card processing fees by comparing payment gateways, merchant accounts and credit card terminals. Compare your credit card processing costs today.

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Written by:
Stephen Hart

Stephen Hart

Founder - Cardswitcher

Former - Chief Financial Officer @ Worldpay

Stephen brings a wealth of experience honed through years in the financial sector, particularly in the card processing payments industry. His illustrious career spans key roles at PwC, Natwest, and the role of CFO at WorldPay, before going on to found card processing comparison site, CardSwitcher. He is passionate about helping growing businesses to understand the card processing landscape so they can make savvy financial decisions.