Two payment technologies step into the ring. Only one can come out on top! Learn about the difference between payment aggregators and payment gateways, and find out which one is best for your eCommerce business.
It’s the eCommerce fight of champions! In one corner, we have Grendel the Payment Gateway, and in the other, Arnold the Payment Aggregator.
As the bell rings, who do you bet on?
Like many other parts of online retail, the answer isn’t that simple. It’s not a binary choice, and it’s based on far more than who has the most dazzling array of features. In fact, making the right decision will depend on exactly what your needs are as an online merchant.
Not sure which team you want to join? Don’t worry, we’re here to coach you through finding perfect choice for you.
Seconds out, round one!
Arnold the Aggregator comes out of the corner fast, ready to explain exactly what he can do for your eCommerce business.
First off, if you use a payment aggregator, you do not need a merchant account—which happens to be a big deal. A merchant account is a facility that you create with your bank that allows you to accept credit cards and other payments from customers.
If you use a payment aggregator, they can take payments on your behalf, collect them together, and deposit them straight into your regular business bank account (minus fees.) There are plenty of popular payment aggregators out there—think Stripe, Paypal, Square, and similar businesses.
Arnold is flexing now, wanting to show you how these aggregators work. Essentially, an aggregator groups your business with other merchants behind the scenes, but tracks your payments individually. The aggregator takes payments on your behalf and accepts the money into their own merchant account. They can then transfer the money to your account on request, or on a regular schedule.
Grendel the Gateway is not to be outdone, but he’s a more basic fighter than Arnold. You see, a payment gateway mechanism is great at doing one thing really well—sending information between your payment system and the payment processor for forwarding onto the card payment networks. The card payment network and issuing bank then authorize or deny the transaction and let the payment processor know. The payment processor forwards the information to the payment gateway that lets the customer know if their payment method has been accepted or denied.
Phew! Grendel’s furrowing his brow just thinking about all those steps.
Payment gateways are typically offered by your bank or a separate payment gateway provider like Authorize.net, Securepay, or PayLine. Some payment aggregators, like PayPal, also offer payment gateways.
Arnold the Aggregator is desperate to tag you into the ring, but is it a wise choice? Well, a payment aggregator could be right for you if:
On the other hand, Grendel the Gateway shouldn’t be underestimated. A payment gateway does have several advantages of its own:
Alright, you’ve watched the fighters battle it out, which one should you choose?
A payment aggregator is likely best for you if:
You should consider a payment gateway if:
What if you could bet on both fighters? Or try out multiple payment gateways at once? Well, you can. Put the right payments stack technology in place, and it can integrate your website, shopping cart, payment processor, payment gateway, and payment aggregator together. You can try processing money in several different ways so you can work out what’s best for you. You can route payments to an aggregator or a specific processor based on the criteria you set.
Yes, it’s truly the best of both worlds.
Whatever you decide, remember you’re not locked in. You have a choice of aggregators and gateways, so why not give them both a try and see what works best for you?