Payment aggregator
An entity that aggregates payments from multiple merchants under one master merchant account.
Definition
Payment aggregator is an entity that pools transactions from many merchants under one master account with card networks. Stripe, PayPal, Square are aggregators (despite Stripe being technically a payment facilitator).
Context
Aggregators simplify merchant onboarding; underlying merchants do not need their own merchant accounts with banks.
Example
A Delaware LLC accepts cards via Stripe (an aggregator) without applying for a traditional merchant account.
Common pitfalls
- Aggregators have stricter underwriting than traditional merchant accounts.
- Higher restrictions on certain industries (adult content, crypto, gambling).