PSPs, Payment Facilitators, and Aggregators

Payment service providers

The concepts of payment service providers, payment facilitators, and payment aggregators may be used in different contexts and have different meanings. However, they do denote three types of important subjects of merchant services industry. All three types of entities service large numbers of small- or medium-size merchants (or sub-merchants) belonging to their portfolios. The peculiar feature of payment service providers is that they do not participate in sub-merchant funding process. Their revenues are derived mostly from processing fees collected by the acquiring bank, which does the funding. Payment facilitators fund their sub-merchants themselves and a unique MID is used for every merchant. Finally, payment aggregators are the entities which also fund their sub-merchants, but a single MID is used for all of them.

More information on the differences between payment service providers, payment facilitators, and payment aggregators, can be found in the respective article on #Paylosophy.