Payment Aggregation is a processing arrangement where a payment facilitator allows sub-merchants to operate under its master merchant account instead of requiring each sub-merchant to obtain and manage their own merchant account.
This allows for quicker, more streamlined onboarding for the sub-merchants. Payment aggregation can be an advantageous solution for smaller businesses or individual sellers as it:
- simplifies the payment process.
- reduces costs associated with having a dedicated merchant account.
- allows them to start accepting payments almost immediately.
However, payment aggregation also involves certain risks and challenges, such as a higher likelihood of account holds or terminations, less control over the payment process, and potential difficulties in handling chargebacks and disputes.
Despite these challenges, payment aggregation remains a popular choice for many small businesses and start-ups due to its convenience and ease of use.