Payment Aggregation

Typically, Merchant Aggregators or Payment Aggregators are service providers through which e-commerce or mobile payments merchants can process their payment transactions. Aggregators allow merchants to accept credit card and bank transfers without having to setup a merchant account with a bank or card association.

The Aggregator provides the means for facilitating payment from the consumer via credit cards, stored value accounts or bank transfer to the merchant. The merchant is then paid by the Aggregator. This practice gets controversial among the more traditional sectors of the payment processing industry because it makes it harder for networks to monitor just who generates transactions and, most importantly, the attendant risk.

Payment Aggregators, such as Square also have discretion over when a merchant receives their funds, another drawback of the aggregation model. The Aggregators can chose to release the funds in a timely manner (24-48 hours) like most processors, or they can withhold the funds for up to an additional 30 days.

With a traditional merchant account, like the ones Host Merchant Services offers, there is a noteworthy difference in practice for the merchant. The account is in the merchant’s name, giving the merchant more rights as well as more responsibilities. The traditional merchant account also holds Host Merchant Services to the merchant with added oversight on the transaction process. The security and service gives merchants more peace of mind and more value for their effort.