Payment Aggregator vs Payment Gateway: Key Differences and Role in the Online Payment Ecosystem

If you are in the process of launching your business, especially if it is an eCommerce store, you are probably trying to find the best setup for online and offline transactions. As a result, you might have already come across different terms like payment aggregators and gateways, and you might not know which one to choose. Do not worry, we have outlined the difference in this payment aggregator vs payment gateway guide. Keep reading to get clarity.

What Is a Payment Aggregator and How It Works

In simple terms, an aggregator is a licensed entity that allows multiple merchants to accept transactions through a shared infrastructure, without requiring individual merchant IDs from acquiring banks. It is a service provider that provides and aggregates different payment acceptance services to merchants. Aggregators primarily facilitate digital payment acceptance — such as UPI, cards, wallets, and net banking. While they may offer reconciliation tools, they do not directly handle offline transactions like cash or cheque deposits. With the aggregator, merchants can accept multiple payment methods without setting up separate accounts with different payment service providers, banks, or card companies. Mainly, the aggregator takes a massive load of integrating several payment providers to offer a single solution for every payment acceptance.

When you use the services of the aggregator, you can enjoy all forms of payment acceptance, including QR codes, net banking, debit or credit cards, e-wallets, SMS payments, cash, cheque, etc., under a single interface.

What Is a Payment Gateway and Why Businesses Use It

A payment gateway is an eCommerce application that allows the passage of online payment transactions. In simple terms, it is a way to accept them online. It integrates, captures, moves the information to a payment processor or an acquiring bank, and finally sends an approval or decline to the merchant. A typical gateway completes this process within a second. In addition to that, the gateway ensures that all incoming funds are transferred to the merchant account without interference from any third party.

Payment Gateway vs Payment Aggregator: Key Differences

Although the aggregator and gateway are all about enabling online transfers, they differ in some areas. One of the significant differences is that the gateway is perfect for eCommerce websites or apps, while aggregators digitise online and offline payment touchpoints. Aside from that, there are other significant differences between payment aggregators and payment gateways with an increased number of merchantslisted below.

Type of Registration for Aggregators and Gateways

With payment aggregators, all of the merchant accounts are in one place without multiple registrations. All you need is one registration, and you can offer all the payment options available. On the other hand, using a gateway typically requires merchants to establish a direct relationship with an acquiring bank and obtain a merchant account, through which settlement occurs.

Fee Structure and Pricing Models

Payment aggregators often offer simplified onboarding and bundled pricing, which may reduce initial costs for small merchants. However, the total cost depends on volume, risk profile, and provider terms. In addition to that, payment gateways might charge merchants setup and maintenance fees. With the aggregator, you do not have to worry about these fees, especially if you take the time to find the perfect fit for you. In some cases, you might only get charged a transaction discount rate.

Types of Payment Services Offered

When the number of merchants’ applications and registration gets high, it becomes difficult for the payment gateway. For instance, with an increased number of merchants, the verification and screening process can become complicated, meaning that the payment processing might also be affected. Payment aggregators also have a more personalised customer service compared to payment gateways.

The Role of Each in the Payment Flow

The payment gateway works as a medium or intermediary between the customers and merchants. While on the other hand, The aggregator acts as a single unified interface that connects with banks, card networks, and wallets, collecting payments on behalf of multiple merchants and settling funds after deducting applicable fees.

Compliance, Licensing, and Security Standards

Payment gateways require approval and licenses under the laws and regulations of the country in which the merchant is operating. As of 2025, a payment aggregator in India must be licensed by the central bank (e.g., RBI) and comply with KYC, AML, and PCI DSS requirements. Payment gateways that do not directly handle funds may not require licensing, but must still meet data security standards. In addition to that, they need to be compliant with the Payment Card Industry Data Security Standard (PCI DSS).

Ownership and Regulatory Oversight

In most cases, aggregators are owned by private fintech companies, while payment gateways can be owned by private banks, vendors, aggregators, public banks, and even merchants.

Which Payment Solution to Choose for Your Business?

Payment gateways and payment aggregators have an underlying function of ensuring that all online transfers are enabled. However, the two solutions possess various tasks that make them different, highlighted in this payment gateway vs. aggregator comparison. As a result, you can now see how they are different and a perfect fit for your business. So, you can proceed to implement either a payment gateway or an aggregator into your business to start processing transactions.