What is a Payment Gateway and Payment Aggregator? Check the Difference!

Imagine, you are scrolling through your favorite marketplace to buy the latest shoes. When you check out, you are presented with various payment method options, bank transfer, e-wallet, or pay on the spot. 

So, the behind-the-scenes process that makes payments practical is the work of payment gateways and payment aggregators. These two terms often make you confused, but don't worry, we'll discuss it until you understand. Come on, see the complete explanation!

What is a Payment Gateway?

Payment gateway is a technology that allows online transactions to occur safely and quickly. This system works as a bridge between customers, online stores and banks to ensure successful payments. 

For example, when you choose to pay using an e-wallet, the payment gateway directly connects your request to the e-wallet system. Payment gateways also have high security features. 

So, you don't need to worry about sensitive information such as credit card numbers being leaked. This technology is very important for online stores that want to increase customer confidence in transactions.

Also read: Advantages of the Best Cashier Software for F&B Businesses

Understanding Payment Aggregator

Aggregators are service providers that combine many payment methods in one system. If payment gateways focus on security and speed, payment aggregators make business easier. 

Through aggregators, merchants can accept various transaction methods without having to enter into contracts with each payment provider. For example, you have a coffee shop business. 

If you register with a payment aggregator, you can immediately receive payments from credit cards, e-wallets, and even bank transfers. All of this is integrated in one service. Very practical, right?

If we discussed payment aggregators earlier, now we will replace merchant aggregators. So, a merchant aggregator is a type of aggregator specifically designed to help small and medium businesses. 

This service allows small businesses to accept various transactions, without the hassle of working with multiple banks or e-wallets. Apart from merchant aggregators, there are also market aggregators. 

Market aggregator is a service that collects various merchants or shops on one platform. An example is the marketplace where you usually shop.

Market aggregators make it easier for customers to compare products and services. For merchants, this is a golden opportunity to reach more customers without having to create their own website. 

If you have a small business, entering a market aggregator is a smart step to expand your market reach. In essence, a payment aggregator is a solution that makes it easier for merchants to accept payments from various methods. 

Through this system, you don't need to bother managing technical integration with each payment method. Everything has been summarized in one service. For example, your culinary business wants to accept payments from debit cards, credit cards and e-wallets.

Payment aggregators allow you to manage all of this more easily. In addition, this service often offers transaction reports that help you monitor business developments.

How Does Payment Gateway Work?

When selecting items to purchase online, the next step is to go to the checkout page. This is where the payment gateway starts to work. First, you will be directed to fill in sensitive data such as account numbers or e-wallet accounts.

Sounds normal, right? However, make no mistake, behind it there is a high level security system. Payment gateways use advanced encryption technology to keep the information you enter from falling into the wrong hands.

After the data is sent, the system will contact the bank to ensure you have sufficient balance to complete the transaction. If everything is in order, the bank immediately gives the green light.

The final step, the seller will receive a notification that the money has been received. They will immediately process your order. This process is fast, secure, and almost invisible, but without a payment gateway, online transactions would be much riskier.

What about Payment Aggregators?

If payment gateways are like security guards, payment aggregators are an all-in-one solution. The process is almost the same, namely the buyer chooses the item, pays, and that's it. 

However, there is one big difference that makes payment aggregators attractive to business people. You as a seller don't need to bother opening accounts at various banks or e-wallet platforms. 

Payment aggregators have taken care of everything for you. All transactions are managed by one integrated system. For example, one customer wants to pay using a particular digital wallet, while another customer prefers bank transfer. 

You don't need to worry, because the payment aggregator ensures that every payment is transferred directly to your account.

Main Differences between Payment Gateway and Payment Aggregator

After understanding the meaning of each, now is the time for us to discuss the essence of dari difference between payment gateway and payment aggregator. The main difference is in the service focus, namely:

1. Payment Gateway

• Focus on security and efficiency of online transactions
• Usually suitable for large businesses with high transaction volumes
• Requires more complex technical integration.

2. Payment Aggregator

• Focus on convenience for merchants, especially small businesses
• Suitable for businesses of all sizes that want to accept multiple payment methods
• No need to contract directly with the payment provider.

Both are equally important, depending on your business needs.

Why must businesses use this technology?

Today's culinary businesses must be technology savvy. Customers increasingly prefer cashless and fast transactions. Both payment gateways and payment aggregators have an important role to play in meeting this need.

If you are confused about choosing, the solution is really easy. Use a cashier system that is integrated with modern payment services. For example, ESB POSLite And ESB POS.

Source: Freepik

Read Also: Integrated Cashier POS for Various F&B Business Ecosystems

Closing

Payment gateways and payment aggregators are technologies that cannot be missed for modern culinary businesses. These two systems have their own advantages that can be adjusted to suit your needs.

Well, with ESB POSLite And ESB POS, you not only manage your business more easily. You also create satisfaction for customers. So, what are you waiting for? Start now and make your culinary business the best!