This article explores which payment system (payment gateway vs payment aggregator) is better for different types of business. Meanwhile, as the rise of blockchain technology, how those two payment systems be redefined in the blockchain ecosystem.


What is a Payment Gateway?

A payment gateway involves the merchant directly opening an account within the acquiring institution in their name. Usually it is with the gateway provider of the value-added services they use. In this model, the acquiring institution establishes a direct contractual relationship with the merchant, taking on the highest transaction risk.

What is a Payment Aggregator?

Opening a payment aggregator means an intermediary company between the acquiring institution and the merchant assumes the highest risk of transactions. Common examples of these aggregator intermediary companies include PayPal, Stripe, Square, Google Checkout, and Amazon Payments.

Payment gateway vs payment aggregator?

A payment aggregator suits newly established businesses or merchants with low transaction volumes. Since the risk assumed by aggregator companies is generally direct, it only requires a little due diligence. Often, it involves minimal or no credit assessments, which can be suitable for small businesses. However, due to the associated risks, it usually comes with higher fees, lower flexibility, and stricter controls. Consequently, many small merchants eventually “outgrow” aggregated accounts, seeking direct merchant accounts that can handle larger scales.

A payment gateway is generally more suitable for medium or large merchants with higher transaction volumes. Merchants must have good transaction records and financial statements and undergo “Know Your Customer” (KYC) and credit and risk assessments to obtain a payment gateway account. And it offers greater flexibility and lower fees.

If you are a small or newly established company, an aggregated account is the best choice to start your e-commerce business. If you are a growing merchant with a good track record, a direct account is the “next step” to replace the aggregated account. 

Blockchain Application

With the development of blockchain, it has provided more definitions for payment gateways and payment aggregators.

Cryptocurrency Payment Gateway

A cryptocurrency payment gateway serves as a platform enabling businesses or individuals to receive payments in digital currencies such as Bitcoin or Ethereum. It functions as a mediator between purchasers and vendors, managing transactions and transforming digital currencies into conventional forms.

Cryptocurrency payment gateways offer faster transaction times, lower transaction fees, and higher security. As the popularity of cryptocurrencies continues to rise, businesses are opting for payment gateways to take advantage of this growing trend.

Cryptocurrency Payment Aggregator

A cryptocurrency payment aggregator can be understood as a payment consensus protocol system that connects funds in a decentralized manner. It is a foundational technological solution for mixed cryptocurrency and fiat payments, compatible with all mainstream payment forms and wallets and adaptable to payment solutions in all mainstream scenarios. It facilitates the free exchange of digital currencies and fiat currencies. And it connects cryptocurrency payments with traditional payments. In other words, it allows for the seamless conversion and payment receipt of both fiat and digital currencies, with Bitcoin being a representative.

Ideally, it can be compatible with almost all scenarios, including offline retail, e-commerce, online entertainment, bulk transactions, supply chain finance, and cross-border transactions. The cryptocurrency payment aggregator also builds an infrastructure for cryptocurrency payments, aggregating traditional financial payments and cryptocurrency payments.

An payment aggregator is ideal for newly launched businesses, while a payment gateway account offers more flexibility for growing enterprises. With the rise of blockchain, cryptocurrency payment gateways and aggregators provide businesses with innovative payment solutions, connecting traditional financial payments with emerging digital currency payments, bringing broader prospects for development in the business field.

About CipherBC

CipherBC stands as a market leader in digital asset custody and payment solutions, catering to businesses seeking a secure and efficient transition to Web3 transformation, ensuring the security of assets and We are committed to the mission of “ fostering financial freedom.” In line with this objective, we provide asset owners with a complete range of services, encompassing asset custody, merchant payments, clearing and other financial services.

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