The rise of digital payments and the changing consumer trends with the pandemic have meant that businesses/merchants have been forced to switch quickly from a single channel (in-store) to an omnichannel (in-store, online, and doorstep) presence. As more and more consumers are shopping online and opting for contactless (digital) payment modes across offline & doorsteps channel as well, embedding the payments experience in consumer journeys and managing payments infrastructure have become extremely important to businesses in virtually every industry.
It has now become quintessential for a business to partner with a Payment Aggregator or a Payment Gateway (PA/PG) to not only fulfill the payment requirements of its end consumers but be able to offer them the best-in-class payments experience across any channel (in-store, online, and doorstep) So, today, we will deep dive into –
A Payment Gateway is a technology platform that allows any business/merchant to accept digital payments and enables the businesses/merchants to offer a multitude of digital payment options to their consumers including cards (debit, credit, corporate), UPI, Aadhar Pay, Net Banking, Wallets and more.
The key difference between a Payment Gateway & Aggregator is that while a Payment Gateway only provides the technology, a Payment Aggregator would also receive payments from consumers on the business/merchant’s behalf and then settle the same in their account.
Suppose a business wants to provide Net Banking payment options to its consumers, then one way to go about it is that the business ties up with different banks; however, this approach would entail a lot of resources, time & capital. Another way to go about this for a business is to tie up with a Payment Aggregator, which would enable the business to offer various payment options including Net Banking, while eliminating the need to go and tie up with each bank. The technology that the Payment Aggregator leverages/uses to securely transfer consumer payment information for processing here is known as Payment Gateway. Most of the Payment Aggregators have an in-house technology stack i.e., a Payment Gateway, or will tie-up with third parties for the solution.
There are majorly five players involved in traditional Payment Processing as mentioned below –
We will take an example of a card transaction to understand the flow of payment processing and
the work of Payment Aggregator –
PA/PG can be of two types i.e., either a PA/PG provided by Banks or a private third-party platform like PayPhi. Traditionally, only banks used to provide PA/PG services but over the last two decades, third-party PA/PGs have redefined the contours of digital payments with innovative technology solutions.
The types of integration of PA/PG with business/merchant depends upon the requirement of the business/merchant and the kind of payment experience it wishes to provide to its consumers. There are broadly 3 types of integrations –
Now, that we have covered the different aspects of payment processing and have understood what exactly the role of a Payment Aggregator is, let’s look at the key factors that a business/merchant should consider while choosing the best-fit Payment Aggregator –
If your business is looking at a one-stop PA/PG solution that scores highly in all of the above-mentioned metrics, then you need to look no further than – PayPhi (a multiple award-winning digital payment platform of Phi Commerce). PayPhi powers frictionless payments for businesses/enterprises backed by an omnichannel digital platform, deep payments tech expertise & vertical-specific insights. Using its omnichannel payment enablement strategy – PayPhi helps businesses digitize payments/collections, enabling them to accept any mode of payment (270+ payment modes supported) across all the channels – online, doorstep, and in-store (offline), thereby enabling an inclusive approach to payments.