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Payment Aggregator vs Payment Gateway

This guide explains the key differences between payment aggregators and payment gateways, focusing on their roles in the digital payment ecosystem. It highlights how each functions, compares features, and outlines their specific use for NBFCs. From simplifying loan collections to ensuring regulatory compliance, the guide helps NBFCs choose the right payment solution based on their size and needs. It also covers RBI regulations and essential factors for selecting a secure, compliant provider.

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Payment Aggregator vs Payment Gateway

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  1. Payment Aggregator vs Payment Gateway: A Guide for NBFCs What is a Payment Gateway? A payment gateway is a technology tool that enables online transactions. It acts as a bridge between the customer, the merchant, and the bank. The gateway encrypts sensitive data, such as credit card details, and securely sends it to the acquiring bank for approval. Key Features: - Encrypts and transmits payment data - Authorizes payments in real time - Works with cards, UPI, wallets, and net banking - Includes fraud detection tools - Integrates with websites and mobile apps Examples: Razorpay, PayU, CCAvenue, PayPal What is a Payment Aggregator? A payment aggregator (or merchant aggregator) allows multiple businesses to use one master merchant account to accept payments. It eliminates the need for individual businesses to get a separate merchant ID from a bank. Key Features: - Onboards businesses quickly - Manages settlements and reconciliations - Reduces paperwork and bank formalities - Often includes a payment gateway Examples: Razorpay, Instamojo, Cashfree, Paytm for Business Page 1

  2. Payment Aggregator vs Payment Gateway: A Guide for NBFCs Payment Aggregator vs Payment Gateway: Key Differences Feature Merchant Account Onboarding Time Payment Gateway Required Slower Direct to merchant account Less responsibility Custom setup Payment Aggregator Not required Faster Fund Settlement Settled via aggregator KYC/Compliance Integration Aggregator manages it Plug-and-play Startups, SMEs, freelancers Best for Large enterprises Use of Payment Aggregator and Gateway for NBFCs NBFCs use digital channels for collections, disbursements, and services. Here's how these tools help: 1. Simplified Loan Repayment Collection 2. Faster Customer Onboarding 3. Disbursement Management 4. Reduced Operational Complexity 5. Regulatory Compliance These tools offer NBFCs a secure, fast, and scalable way to manage payments. Page 2

  3. Payment Aggregator vs Payment Gateway: A Guide for NBFCs Which One Should You Choose? Choose a Payment Gateway if: - You are a large NBFC - Already have a merchant account - Want complete control over funds Choose a Payment Aggregator if: - You are a startup, SME, or small NBFC - Want to go live quickly - Want lower compliance burden Page 3

  4. Payment Aggregator vs Payment Gateway: A Guide for NBFCs Choosing the Right Provider: What to Look For - Security (PCI-DSS, SSL, 2FA) - Settlement Cycle (1-3 days for aggregators) - Charges (MDR, setup fees, hidden costs) - Support & Documentation (APIs, dashboards) - Regulatory Approval (RBI-approved aggregators) Regulatory Landscape in India RBI guidelines for payment aggregators: - Must register with RBI - Full KYC of merchants required - No card data storage (use tokenization) - Must use escrow accounts These aim to boost transparency and reduce fraud. Page 4

  5. Payment Aggregator vs Payment Gateway: A Guide for NBFCs Conclusion Understanding payment aggregator vs payment gateway is essential-especially for NBFCs. While both enable digital transactions, they differ in operations and use cases. Summary: Payment Gateway = Secure data transfer + transaction authorization Payment Aggregator = Fast onboarding + settlement handling + gateway included NBFCs benefit by simplifying collections, boosting compliance, and scaling easily. About the Author NBFC Advisory is a seasoned fintech advisor and compliance consultant specializing in NBFC registration, digital payments, and regulatory strategy. With deep expertise in RBI regulations, payment aggregator licensing, and fintech integrations, NBFC Advisory helps businesses scale securely and compliantly. They work closely with NBFCs, startups, and financial service providers to streamline digital transformation and enable seamless online payment experiences. Page 5

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