Page 23 - Banking Finance December 2022

COVER STORY

COMPETITIVE

PRICING IN PAYMENT

AGGREGATOR

BUSINESS:

OPPORTUNITIES AND

POSSIBILITIES

ayment Aggregators (PAs) are service providers time setup fee for setting up the merchant account. This
P through which e-commerce merchants can fee is charged to cover expenses on on-boarding a
process their payment transactions. Aggregators
merchant like KYC of business, document verification and
allow merchants to accept credit/ debit card and
bank transfers from the customer without having to set up infrastructure cost.
2) Annual Maintenance Charge (AMC)- This fee is charged
a merchant account with a bank or card association. The
monthly or annually to the payment gateway as a
entities who provide technology infrastructure to route and
maintenance charge for software, operation, customer
enable processing of an online payment transaction without
service, version up-gradation, etc. Annual maintenance
any involvement in handling of funds are called Payment
charges depend on the sort of services merchants have
Gateways (PGs).
chosen e.g., payment modes, transaction settlement
cycles, and integration platforms.
Payment aggregators levy various charges on merchants to
3) Integration fee - This fee is charged to integrate the
sustain the business and earn profit. The breakup of Payment
payment gateway on the website or app. These charges
gateway charges is:
depend on the opted platform on which the payment
1) Setup charges - Some payment gateways charge one-
gateway is to be integrated.
4) Merchant Discount Rate (MDR) - This is the percentage
About the author charged to a merchant as processing fee for payment
services. Merchant discount rate is charged by the
Rajeev Shankar
payment service provider, which is levied for using the
AGM (Research),
payment infrastructure i.e., when a merchant accepts
State Bank Institute of Innovation
payment from their customers through online payment
and Technology, Hyderabad
modes or debit and credit cards in exchange of goods
BANKING FINANCE | DECEMBER | 2022 | 23