A Payment Aggregator is a service provider that enables multiple merchants to process payments under a single, master merchant account. The aggregator collects (or “aggregates”) transactions from sub-merchants and routes them through a centralized payment setup, simplifying access to card and digital payment acceptance particularly for small or micro-merchants.

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The payment aggregator model is functionally equivalent to that of a Payment Facilitator (PayFac). In fact, in many markets, the terms are used interchangeably. The aggregator acts as the merchant of record with the acquiring bank and takes on responsibility for onboarding, underwriting, and monitoring its sub-merchants.

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Core Characteristics of a Payment Aggregator:

• Holds one master merchant account with an acquirer
  
• Onboards multiple sub-merchants under that umbrella
  
• Performs KYC/KYB, underwriting, and risk checks
  
• Routes transactions, manages settlement, and handles merchant payouts
  
• Assumes liability for fraud, chargebacks, and regulatory compliance

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In some regions, the term "aggregator" was widely used before "PayFac" became standardized in card network rulebooks. For example, certain jurisdictions use "aggregator" to describe providers who offer merchant account–less onboarding—a hallmark of the PayFac model.

Risk & Regulatory Considerations:

• Aggregators are responsible for vetting sub-merchants, preventing misuse of the master MID, and maintaining transaction integrity
  
• As regulatory frameworks have matured, formal registration as a PayFac has become increasingly required for aggregators operating at scale
  
• Like PayFacs, aggregators must implement robust fraud prevention, content compliance, and monitoring programs

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In summary, a Payment Aggregator is a synonym for a PayFac in most cases. It describes a model in which a central provider enables a broad base of merchants to process payments quickly and efficiently while shouldering the operational and compliance responsibilities of that activity.

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