what is the difference between aggregated merchant account and dedicated merchant account?

This is a very important question that all the merchants and clients who are doing online businesses overseas should know about. If you are new, you should ask this question before signing any merchant account agreement. Understanding the difference between the two is vital for you to select a right payment gateway and merchant account.

Before we discuss the differences, we need to understand exactly why they are needed.

In the past, people used to receive cash and use that medium as the method of payment processing. Business does would collect money in cash and then deposit it to the business bank account.

But nowadays, we have many payment methods and services providers. By using payment service providers, businesses can use credit cards. Payments can be received in both stores and online. You can create an online store easily.

Merchants can increase their volume of sales by these modern methods. If anybody wants to flourish and expand their business, they should use digital payments. So that is why all the merchants are using digital payments. Developing nations are encouraging the business owners in their country to use credit card processing options. Not only is it better for the merchants and their businesses, it also helps government regulate the transactions at an atomic level.

It has become a trend nowadays to use payment processing companies because the government and financial institutions both are insisting everybody to use them.

What distinguishes a dedicated merchant account from an aggregated merchant account?

  • It is for only one merchant.
  • Merchants send an application filled with KYC documents. The requirements are more necessary
  • Processing fees are less and transaction proceeds are transferred into your account.
  • It has to go through comprehensive underwriting.
  • Dedicated merchant account usually takes much more time to get an approval than an aggregated merchant account. It takes around 48 hours to get an approval and there are additional time periods, which involve integration of POS or electronic payment processing.
  • Only your account transactions will be used by the processing credit card and therefore you are in complete control.

What’s the underwriting process for Dedicated Merchant Account?

When you apply for a dedicated solution, you have to wait for a few days and the team might ask for some more documents.

What’s the Setup Time Frame?

Since this merchant account has more risk, they usually have to wait for a while to get approval. Multiple factors are looked at by the underwriting team to review the files. The merchant might have to make some changes or modify the website. The website must follow the guidelines of Card Schemes and Acquiring banks. It is hard for the merchants to get approval a lot of time because of the high risk. That is why high risk merchants apply for offshore payment processors.

There are many other factors that you need to check such as credit card processing rates while signing up for any of the merchant account.

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