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So you’re about to start accepting payments through your app or online store, but don’t really know whether you should negotiate directly with different payment methods, or turn to a payment aggregator for help?

Lucky for you, we’re here to make the decision much easier for you. And since we support both use cases, you don’t really have to worry about our bias.

That being said, here’s everything you need to know about merchant accounts and payment aggregators to help you make up your mind.

Merchant accounts 101


What is a merchant account?

Simply put, a merchant account is a type of bank account that allows businesses to accept credit and debit card payments from their customers. It’s essentially a contract between a merchant (that’s you), a merchant acquirer (like Concardis or Bambora), and a payment gateway (like Payment Highway) that handles the settlement on credit and debit card payments.

The benefits of having a merchant account

The benefits of a merchant account — as compared to a payment aggregator — are threefold:

  1. It allows you to negotiate your prices individually with each and every payment method and card brand, which can save you a lot of money if you’re handling a high volume of transaction.

  2. Similarly, if you’re processing huge volumes, going with a merchant account allows you to even choose a different acquirer for each card brand. For example, you could negotiate one deal for Business Visas with Acquirer A and a separate one for Debit Mastercards with Acquirer B. Again, that means getting the best possible deal for your business.

  3. Finally, a merchant account allows you to set different criteria for each payment method, currency, and/or geographic area. Yet another convenient feature for high transaction volumes.

The disadvantages of having a merchant account

However, for all their benefits, merchant accounts also come with a few downsides that you should be aware of:

  1. We’re not going to sugarcoat it: Each separate agreement adds complexity to your business. And since each payment method and acquiring bank have their unique ways of doing settlements and reporting, you might be looking at a lot of manual work and some precious extra time spent with your books.

  2. Especially if you’re just starting out or your volumes are otherwise limited, you may not have enough authority to negotiate prices down just yet. In that case, using a payment aggregator may well be your best bet.

  3. Perhaps the biggest downside of merchant accounts is that the negotiations process can easily take weeks. Additionally, your legal department will have to dedicate some real quality time with the contracts before you can start accepting payments.


When is a merchant account right for my business?

The simple answer is this: If you’re handling a large volume of transactions, going with a merchant account is probably your best bet. Why? Because it allows you to negotiate separate deals for each payment method.

Payment aggregators 101


What is a payment aggregator?

A (third-party) payment aggregator (like Payment Highway) is a financial services provider who helps merchants (that’s you again) by taking care of their contracts with different payment methods. In other words, the payment aggregator is a one-stop-shop for handling all your payments.

The benefits of using a payment aggregator

The way we see it, the benefits of using a payment aggregator — as opposed to a merchant account — are fivefold:

  1. The total transaction volume of your payment aggregator allows them to negotiate prices down for you — even if your own volume isn’t all that high just yet.

  2. Your settlements for each and every payment method will roll predictably on a daily, weekly, or monthly basis — based on your agreement with the aggregator.

  3. Reporting and bookkeeping doesn’t get much easier than this, since you’re only dealing with one aggregator, instead of an unlimited number of acquiring banks and payment methods.

  4. Making a contract is a lot faster and easier. You simply fill out an online form, after which you’re typically ready to start accepting payments immediately.

  5. Pricing is predictable, and you’re only paying a fixed fee + a pre-agreed percentage for each transaction. No more monthly fees or surprise costs to worry about.

The disadvantages of using a payment aggregator

While payment aggregators don’t suffer from that many disadvantages, there is one important limitation that you should consider:

  1. When your transaction volume through credit and debit cards exceeds a certain limit, regulation will get in your way, and you’ll no longer be able to use an aggregator.

When should I go with a payment aggregator?

The short answer is this: If you want to start accepting payments immediately and/or you’re worried about all the admin work entailed in setting up and maintaining a merchant account, we’d strongly advise you to go with a payment aggregator. It’s faster, easier, and even cheaper for businesses with smaller transaction volumes.


Too long, didn’t read?

If you’re looking for a simple answer on whether to go with a payment aggregator or a merchant account, here it is:

If you want to start accepting payments immediately and you’re expecting a relatively low volume in the beginning, go with a payment aggregator. If your volumes are high and you don’t mind spending some time on negotiating optimal terms for each separate agreement, you should definitely go with a merchant account.

For more information on how we can help you with each case, check out Checkout Finland's pricing options or contact us and get started today.