When you start taking cards, you usually pick one of two paths. You can sign up with an aggregator, which pools many businesses under one account. Or you can open your own merchant account with its own merchant ID. Both let you take payments. They work differently, and the difference matters most when your business grows.
How an aggregator works
An aggregator approves you quickly, often the same day, and your sales run under its master account. That speed is the appeal. The review of your business tends to happen later, as your volume grows or a large sale comes in. Aggregator agreements commonly allow the provider to hold or delay funds or close an account while it reviews activity. Read that section of any agreement you sign.
How a dedicated merchant account works
A dedicated account is reviewed up front. The bank looks at your business, your expected volume, and your typical sale size before you process. That takes longer to start. The benefit is that your expected activity is documented, so a normal busy month is less likely to be a surprise. Through a gateway such as NMI, your stored customer payment profiles stay in your gateway account. Whether you can move them to another processor depends on your agreement and the gateway, so ask about it before you sign.
Two paths at a glance
| Aggregator | Dedicated merchant account | |
|---|---|---|
| Start-up | Often same day | Reviewed first, takes longer |
| Review of your business | Tends to come later | Up front |
| Account | Under the provider’s master account | Your own merchant ID |
| Pricing | Often one flat rate | Varies; ask how it is set |
General comparison. Terms vary by provider, so read the agreement.
Questions to ask either way
- Under what conditions can funds be held, and for how long?
- How is my pricing set, and can it change?
- Is there a contract term, equipment lease, or early termination fee?
- Who do I call when there is a problem?
- Can I take my stored customer data with me if I leave?
A very small or new business may do fine on an aggregator. A business with larger tickets, steady volume, or recurring billing often wants the stability and clarity of its own account. The right answer depends on your situation, so get the terms in writing for each option you consider.
This post is general information and not legal or financial advice. Terms vary by provider.
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