Now that we understand what a Payment Aggregator is and how it differs from a Payment Gateway, let’s look at how payments actually move when you use a Payment Aggregator.
Understanding the end-to-end flow helps you know where money goes, how long it takes to reach your account, and what happens during refunds or disputes.
The Complete Payment Flow (Step by Step)
Customer Initiates Payment
The customer adds products to the cart on your website or app and clicks on the “Pay” button. They choose a payment method (UPI, credit/debit card, net banking, etc.).
Payment Request Goes to Aggregator
Your website/app sends the payment request to the Payment Aggregator’s system through APIs or their checkout page.
Aggregator Routes the Transaction
The Payment Aggregator routes the transaction to the appropriate network:
• UPI transactions go through NPCI
• Card transactions go to card networks (Visa, Mastercard, RuPay) via the acquiring bank.
Issuing Bank Approves the Transaction
The customer’s bank (Issuing Bank) checks if the customer has sufficient balance or credit limit and approves or declines the transaction.
Confirmation is Sent Back
The approval/rejection message travels back through the same chain: Issuing Bank → Card Network/NPCI → Acquiring Bank → Payment Aggregator → Your Website/App.
Money Moves to the Aggregator
If approved, the money is debited from the customer’s account and credited to the Payment Aggregator’s account (usually held in an escrow account as per RBI rules).
Settlement to Merchant
The Payment Aggregator settles the money to your (merchant’s) bank account. In India, this is usually done on a T+1 basis (next working day) for most transactions.
Key Players Involved in the Flow
- Customer (Payer) – The person making the payment
- Merchant – Your business receiving the payment
- Payment Aggregator – The middle layer handling the transaction
- Acquiring Bank – The bank that has partnered with the Payment Aggregator
- Issuing Bank – The customer’s bank (where they have their account or credit card)
- NPCI / Card Networks – The rails that carry the transaction (NPCI for UPI, Visa/Mastercard/RuPay for cards)
How Settlement Actually Works
One of the most important things to understand is when you actually receive the money.
After a successful transaction:
- The money first goes to the Payment Aggregator’s account.
- The aggregator then transfers it to your bank account.
- Most aggregators in India follow T+1 settlement (next working day).
- Some offer instant settlement (same day) for an additional fee.
Note: The aggregator holds the money in a separate escrow account as mandated by RBI. They cannot use this money for their own operations.
What Happens During Refunds?
When you initiate a refund:
- You raise a refund request in the Payment Aggregator’s dashboard.
- The aggregator processes the refund and sends it back through the same network.
- The money is credited back to the customer’s original payment method.
- Refunds usually take 3–7 working days depending on the payment method.
Key Takeaway
When a customer pays using a Payment Aggregator, the money does not go directly to your bank account. It first goes to the aggregator, who then settles it to you (usually on T+1 basis). The aggregator acts as the central coordinator between the customer, banks, and payment networks.
Note: The exact settlement timeline and charges can vary between different Payment Aggregators. Always check the settlement cycle and fees mentioned in your agreement.
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