Payment Aggregator vs. Payment Facilitator
Payment Aggregator vs. Facilitator: Benefits of Each
If your software has a payments integration, you likely have bumped into some confusing industry terms. It can difficult to figure out what everything means, especially if payments is not your main focus. As the payments landscape has evolved and software providers aim to take over more control over payments, one common point of confusion is the differences between a payment aggregator and a payment facilitator. Below is some useful information on both models.
Traditionally, an integrated payments partner would work with software providers to bring in new merchant accounts. This meant that when it came to payments (even if they were using the software application) merchants and interact relatively little with their software provider. A payment facilitator is a type of model in which a software provider controls the payments relationship with their customers.
These are a few of the benefits of the payment facilitator model:
- Faster Sign Up: Getting started is quicker because there are fewer parties involved. Additionally, the onboarding team members are experts on the system because they offer it.
- Control: As a payment facilitator, since you handle all merchant inquiries, you are not dependent on a third party to provide merchant support, controlling the level of service that you provide to your customers.
- Increased Revenue Potential: As a payment facilitator, since you own more control of the payments process, oftentimes you will have a higher revenue share with your payments partner, boosting your bottom line profits!
A payment aggregator specializes in small businesses. The key difference between a payment aggregator vs. facilitator is that the latter gives every merchant its own merchant ID within its system. The former, conversely only uses its own merchant ID to process transactions.
Both aggregators and facilitators offer similar benefits from the perspective of the end-user. Aggregators can often offer less expensive processing for a low number of transactions due to their simpler model. However, they are not ideal for organizations with high transaction volumes.
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