The local payment method is what your buyer uses
A local payment method is the actual way a customer pays in their country: a bank-transfer rail like iDEAL in the Netherlands, a real-time system like Pix in Brazil, a wallet, a cash voucher, or a local card scheme. Your buyers recognise it and trust it. You cannot substitute it with an international card alone and expect the same checkout conversion.
- Examples: Pix in Brazil, iDEAL in the Netherlands, UPI in India.
- It is the rail the money moves on, not the company that connects you.
- Offering the right local method is usually the first step in a new market.
The payment service provider (PSP) connects you
A PSP is the company that gives you the technology and relationships to accept payments. It connects your store to acquiring banks and card networks, offers an API or hosted checkout, and usually adds fraud tools, reporting, and reconciliation. Stripe, Adyen, and Checkout.com are examples. A PSP can support many local payment methods through one integration.
- Provides the integration, dashboard, and support.
- Connects you to acquirers, networks, and local schemes.
- May support dozens of local methods from one account.
The payment aggregator bundles merchants
An aggregator is a model where many sellers are processed under one master merchant account. This lets a small business start accepting payments in minutes without opening its own merchant account. Aggregators are a type of PSP model; the key difference is that all merchants share one merchant ID rather than each getting a dedicated one.
- Fast onboarding with minimal paperwork.
- All sellers run under the aggregator's master account.
- Good for small or occasional sellers; less control than a dedicated account.
How the three fit together
Think of it as layers. The local payment method is the rail. The PSP is the connector that lets you reach that rail. The aggregator is one way a PSP can onboard you. You can use a PSP that is also an aggregator, or a PSP that gives you a dedicated merchant account. What you always need first is the method your buyers actually use.
- Method = how the customer pays.
- PSP = how you connect to that method.
- Aggregator = how quickly and simply you get onboarded.
Which one do you need first?
Start with the local payment method your target market expects, then find a PSP (or aggregator) that supports it in your country. Do not pick a PSP first and hope it covers the market later; if it does not support the local rail, your checkout will underperform no matter how good the dashboard is.
- List the top one or two methods in your target country.
- Shortlist PSPs that natively support those methods.
- Decide aggregator vs dedicated account based on volume and control needs.
Common mistakes when entering a new market
The usual error is treating 'PSP' and 'payment method' as the same thing, then discovering the provider cannot process the local rail your buyers want. Another is assuming one global account covers every country; many local methods require local currency, a local entity, or a licensed local partner.
- Choosing a PSP before confirming local method support.
- Ignoring local currency or entity requirements.
- Assuming card-only checkout is enough outside the US and Europe.
Questions merchants ask
What is a local payment method?
It is the specific way people pay in a country, such as a bank-transfer rail, wallet, or cash voucher. It is the rail the money moves on, separate from the company that connects you to it.
What does a PSP do?
A PSP provides the technology and banking relationships that let you accept payments. It connects your store to acquirers and networks and usually adds fraud screening, reporting, and support.
What is a payment aggregator?
An aggregator processes many sellers under one master merchant account so they can start accepting payments quickly without opening their own merchant account. It is one model a PSP can use.
Is an aggregator the same as a PSP?
An aggregator is a type of PSP model. The difference is account structure: an aggregator shares one merchant ID across sellers, while other PSP setups give each merchant a dedicated account.
Do I need a local entity to use a local method?
Sometimes. Certain methods and markets require a locally registered company or a licensed local partner. Ask the PSP directly before you commit, because the answer varies by country.
How do I choose between a PSP and an aggregator?
Base it on volume and control. Aggregators suit fast, low-volume starts; a dedicated PSP account suits larger or regulated businesses that need separate reporting, reserves control, and direct scheme relationships.