Basic Points of Difference between the Payment Gateway and Payment Aggregator

To choose one for your business, know the clarity between these two terms with the main points of differences and explanation

As a layman, one may know what an online payment gateway does; it makes the online payments transfer possible from one party to another. However, technically there are two terms related to this function i.e. payment gateway and payment aggregator. Many would get confused between these two. There are many payment gateways as well as the payment aggregators in India.

This piece of writing would provide some clarification on those topics.

Payment Gateway

It is an eCommerce software application that enables passage from the transfer of the online payments. Basically, it is a means to accept online payments.

Payment Gateway is an individual merchant service enabling the online payments using the eCommerce ASP (An application service provider (ASP) is a business providing computer-based services to customers over a network; such as access to a particular software application using a standard protocol (such as HTTP).

Payment Gateways are mostly provided by banks like HDFC, ICICI, etc. One needs to have a merchant account individually with them.

Payment Aggregators

In simple words, Payment Aggregator is a collection of Payment Gateways.

The Service provider would bunch (integrate) with various options for digital payments (different payment gateways) and bringing them in one place. Thus, through various different options, the eCommerce would be able to collect online payments. And because these service providers are integrating various different payment gateways (options), the merchant themselves need not have a merchant account directly with the bank, like it is the case when you are using a payment gateway.

The examples of the payment aggregators are PayKun, Billdesk, Instamojo, etc.

payment aggregator -list

Difference between the payment gateway and payment aggregator

So, both payment gateways and payment aggregators, have the same function, i.e. enabling the online payment transfer. Difference points are as follows:

Type of Registration:

Payment Aggregators will have all of these merchant accounts in one place without multiple registrations. You just need to have one registration and you can provide all the payment options offered by the payment aggregator.

With a payment gateway, you will need to have the bank account registration and they would provide you with the facility of payment transfer directly.

Payment Options

Like at PayKun you only need to register once and get all of these payment options: Debit/Credit cards, Master Card, Visa, AMEX, Diners Club, RuPay, Net Banking, Wallets, UPI/BHIM, QR Code, etc.

So, in a way, a payment aggregator can be a payment gateway. But with the individuality in nature, payment gateways aren’t the payment aggregators.


The payment gateway charge higher fees compared to the payment aggregators. Also, they may charge a setup and maintenance fees. Whereas, a payment aggregator chosen after proper research would be beneficial to you as they do not charge many types of fees, like PayKun, only charges a TDR (transaction discount rate).

Types of Services

It is difficult for a payment gateway when the number of merchants registering and applying goes high. The screening and verification process might get difficult as well as the processing of the payments might be affected. The customer services part is also not very personalized like it is with the payment aggregators.

The role between the parties

Payment Gateways acts as a medium/intermediary between the merchants and customers whereas a payment aggregator is more like a facility with many such mediums connected with it and through which the intermediaries accept the funds and make settlements.

Security and Compliances

Payment gateways are approved and licensed through the RBI authorization under the Payment and Settlement Systems Act, 2007 (PSSA). The payment aggregators also require an RBI license with the payment aggregator license. They also need to be the Payment Card Industry Data Security Standard (PCI DSS) compliant.


The Payment aggregators can be owned by private fintech companies. And the payment gateway can be owned by the public as well as the private banks, merchants, vendors and payment aggregators.

Working and Conclusion

The authorizing banks in the payment process carry out the underwriting and the funds’ transferring process for various merchants. In the front-end, they have an interface for processing the transactions and at the backend, the banks are the ones that issue the merchant account.

In the case of the Payment aggregators, the underwriting process is carried out by the acquiring bank, and processing of the payments is done through the issued Merchant Identification Number (MID) or different MIDs from various other parties/intermediaries involved.

You might be considering getting an online payment system for your business. Now as this article might have thrown some light, it might be easy for you to choose.

PayKun provides seamless payment transfer services in the safest and secure manner with the lowest possible transaction. It is very easy to register and get onboarded only with the basic required documents. Setup and integration are free without any maintenance charges or hidden charges. Know more about the Settlement and Payment Process.

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