What is a payment method?
A payment method is the actual way a customer pays you. Examples are a credit card, a bank transfer like Pix or SPEI, a cash voucher like OXXO, a QR code like QRIS, or an e-wallet like GoPay or OVO. The payment method is what the shopper sees and chooses at checkout. It is not a company that pays you; it is the rail the money travels on. When you enter a new country, the payment methods available are determined by local habits and regulation, and your job is to offer the ones your buyers already trust. Picking methods is a commercial decision; connecting to them is a technical and contractual one handled by the providers below.
- A payment method is the rail money travels on, e.g. card, bank transfer, wallet, cash voucher, QR.
- Shoppers choose the method; you choose which ones to display at checkout.
- Local methods often convert better than international cards in emerging markets.
- The same method (e.g. a bank transfer) can operate very differently by country.
What is a payment service provider (PSP)?
A payment service provider, or PSP, is a company that helps you accept payments. The term is broad: many providers that call themselves a PSP actually act as aggregators or facilitators. A PSP gives you a single integration to collect from many methods and many countries, handles the technical connection, provides reports, and often helps with fraud screening. In practice, when a merchant says 'our PSP', they usually mean the one contract and dashboard they log into to see money moving. A PSP may route transactions to acquirers and local partners behind the scenes, which is why the lines between these terms blur.
- A PSP is the company you contract with to accept payments.
- It gives you one integration to many methods and markets.
- It usually provides reporting, fraud tools, and reconciliation.
- Many 'PSPs' are actually aggregators or facilitators underneath.
What is an acquirer (acquiring bank)?
An acquirer, also called an acquiring bank, is a licensed financial institution that lets you accept card and sometimes local payments. It sits between your business and the card networks or local schemes, authorizes transactions, takes on settlement risk, and moves funds to you. Acquirers hold the regulatory license and are responsible for ensuring you follow card-network and anti-fraud rules. Large banks can be both acquirer and processor. When you use an aggregator, you are not contracting with the acquirer directly; the aggregator holds that relationship and you are bundled into its shared merchant account.
- An acquirer is a licensed institution that enables you to accept payments.
- It takes on settlement and compliance risk with card networks and schemes.
- You usually get a unique merchant ID with a direct acquirer.
- Aggregators sit between you and the acquirer, so you never see that contract.
What is an aggregator (payment facilitator)?
An aggregator, also called a payment facilitator or PayFac, lets many merchants accept payments under one shared master account. Instead of each business getting its own merchant account and lengthy underwriting, the aggregator onboards you quickly and pools you with others. This is why sign-up takes minutes and why fees are often a flat per-transaction rate. The trade-off is less control, more chance of account holds or freezes during risk reviews, and typically higher rates as you scale. Aggregators are ideal for low volume or fast launch; dedicated acquirers suit high volume and businesses wanting negotiation and direct support.
- An aggregator onboards many merchants under one shared account.
- Sign-up is fast, often minutes, with flat per-transaction pricing.
- Higher volume usually gets cheaper with a direct acquirer, not an aggregator.
- Aggregator accounts carry more freeze and hold risk during reviews.
How they fit together at checkout
Here is the simple flow. A shopper picks a payment method (say Pix). Your PSP receives the request. Behind the PSP, an aggregator or a direct acquirer connects to the local rail (Pix through a Brazilian participant). The money is authorized, settled, and eventually paid out to your bank. You, the merchant, usually interact with only the PSP or aggregator on the surface. Understanding the layers helps you ask better questions: who is the licensed acquirer, where is settlement happening, and who actually carries the risk if a payment fails or is disputed. Clear answers to those questions tell you how solid your setup is.
- Shopper picks a method; PSP receives the request.
- Aggregator or acquirer connects to the local rail.
- Funds are authorized, settled, then paid out to you.
- Ask who is licensed, where settlement happens, and who carries risk.
Questions merchants ask
Is a PSP the same as an aggregator?
Not exactly, though many providers blur the terms. A PSP is any company that helps you accept payments, which can include aggregators, facilitators, and providers that also act as acquirers. An aggregator specifically pools many merchants under one shared account for fast onboarding. When evaluating, look past the label and ask whether you get a dedicated merchant account or share one.
Why does it matter if I use an aggregator instead of a direct acquirer?
It affects cost, control, and risk. Aggregators are faster and simpler but often cost more as you grow and carry a higher chance of account holds. A direct acquirer gives you a unique merchant ID, negotiation power on fees, and usually stronger support, at the cost of a longer setup. The right choice depends on your volume and how much control you need.
Can one provider give me both local methods and card acceptance?
Yes. Most modern PSPs and aggregators offer cards plus local methods like Pix, OXXO, SPEI, or QRIS through a single integration. That is usually the practical goal: one contract and dashboard covering the methods your customers want. Always confirm each specific method is live for your country and industry before relying on it.