What Is A Payment Aggregator? Why Is It Important For MobiKwik

Setting up an online business involves numerous hassles like creating a website, product management, supply chain & logistics, and payment processing. Out of all these, safe online transaction is the priority of every platform to

Setting up an online business involves numerous hassles like creating a website, product management, supply chain & logistics, and payment processing. Out of all these, safe online transaction is the priority of every platform to ensure the security of customers’ hard-earned money. 

Today, online businesses seek a secure way of accepting payments with minimum transaction failure and enhanced security for a seamless customer experience. As you set up your website, you will surely come across terms like ‘Payment Aggregator.’

Choosing a reliable payment aggregator requires basic knowledge and the functioning of the software. Here we will discuss everything about payment aggregators and why it is essential for MobiKwik.

What Is A Payment Aggregator?

A payment aggregator, also known as a merchant aggregator, is a middleware facilitating online payments between customers and merchants. It combines all the online payment options and brings them to one place, making it easy for the customer to perform online transactions securely.

Merchant aggregator also facilitates different modes of transactions, including credit card, debit card, UPI, offline touch points (billing counters, in-field payments, in-store payments), and cash, allowing merchants to make bank transfers without creating a bank-based merchant account.

Payment aggregators, the third-party payment providers, allow merchants to sign up with a unique Merchant Identification Number (MID) for processing online transactions from a single merchant account. In simple terms, payment aggregators allow merchants to accept all online transactions without having multiple merchant accounts with the particular service provider.

What Is The Process Involved In An Online Transaction?

Usually, three parties are involved in an online transaction, they are:

  1. Customer
  2. Merchant
  3. Payment Aggregator

Consider a simple example where a customer wants to recharge his smartphone. The customer will visit the service provider’s website or any third-party platform like MobiKwik. On the interface, he will proceed to the payment page by filling in the necessary details like phone number, service provider details, and recharge plan. The payment page consists of multiple online payment modes like UPI, wallet, credit card, debit card, BNPL, etc. The payment aggregator provides the payment dashboard with numerous payment options, ensuring the customer pays according to his needs. 

Out of all the payment modes, the customer chooses the desired one, and within an instant, he is redirected to further processing. Going in-depth reveals that the payment aggregator platform needs a payment gateway to accept online payments. Gateway encrypts all the data for additional security and shares it with the payment processor. 

Furthermore, the payment processor asks the customer’s bank whether he has enough balance to pay for the order. The bank replies with a ‘YES’ or ‘NO’ depending on the available credits in the account. Finally, the customer gets a message saying the transaction is successful if the bank responds “YES” and the recharge is done.

Why Does MobiKwik Need A Payment Aggregator?

MobiKwik is a popular Indian fintech company providing an online payment platform, digital wallet, and financial services. Besides being an online payment platform, it provides payment gateway services to tech and e-commerce giants, including IRCTC. Furthermore, MobiKwik’s owned gateway, Zaakpay, enables businesses and companies to accept online payments from 100+ modes. Zaakpay also allows the creation of one-click payment links to receive payments instantly without any app or website.

However, MobiKwik’s license to operate Zaakpay was rejected by the Central Bank on April 21, 2022. As per the Reserve Bank of India (RBI) guidelines, it is mandatory to have a 15 crore net worth to get a payment aggregator license. Since MobiKwik was 60 lakhs short of the limit set by RBI, their license was rejected. Later, MobiKwik again submitted the application fulfilling all the criteria; now, the Central Bank has considered their application.

MobiKwik-owned Zaakpay needs the payment aggregator license to function in the market. Furthermore, in the first nine months of financial year 21-22, the total revenue of the fintech giant increased to Rs. 369.5 crores. Out of which, Zaakpay contributed around 11% of the total income. From short of 60 lakhs for getting the license to generating Rs. 543 crores in FY22, MobiKwik has survived all ups and downs and has become a profitable business. MobiKwik share price is currently ₹350 Per Equity. For accurate fintech information, you can visit Stockify.

Invest in MobiKwik With Stockify

Payment aggregators are intermediate software programs that securely encrypt user data and share it with the payment gateway. Companies use them for smooth and safe online payments allowing a seamless customer experience. Fintech major MobiKwik’s revenue surpassed Rs. 543 crores in FY22, making it a profitable company. MobiKwik IPO is yet to be announced; for tracking that, visit Stockify. Stockify is one of the best platforms for buying and selling unlisted shares. This fintech platform not only allows you to see the latest unlisted shares of the company, but you can also buy and sell ESOPs, and pre-IPO shares of blue chip companies not listed in the Indian stock market.

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