Are Payment Aggregators Putting Your Customers at Risk?

What is an aggregator?

An aggregator is a type of payment processor that handles many different merchants' transactions within one account. Payment aggregators are known for their quick setup and minimal verification process.

While aggregators may seem ideal due to their apparent simplicity, working with an aggregator over a dedicated merchant account provider can actually pose risks for your customers.

  

Keep these considerations in mind when advising your customers about payment aggregators:

1. Not all payment processors have the same fraud prevention tools.

2. Your customers' security obligations may not be clear.

3. Aggregators won't give your customers control over their accounts.

 

1. Not all payment processors have the same fraud prevention tools.

Payment aggregators aren't always forthcoming with their fraud prevention methods, meaning your customers may not know what security measures their processor takes (and what fraud prevention tools they'll need to pay extra for).

There are two main aspects of security that you customers should look for: PCI compliance and fraud prevention tools.

If a payment processor is PCI-compliant, they adhere to the standards set forth by the Payment Card Industry. PCI compliance ensures that hackers cannot gain access to your customers' sensitive data. 

In addition to maintaining PCI compliance, payment processors should also give your customers access to different fraud prevention tools.

The most basic tools—such as address verification and card verification code requirement—are typically free with all payment processors.

However, payment aggregators may also charge your customers to have access to more advanced fraud prevention tools. Make sure your customers are aware of these additional costs up front! 

iATS provides all of the following advanced fraud prevention tools at no additional cost:

Card Tumbling

Name Tumbling

IP Blocking

Bank Identification Number Blocking

iATS provides robust security features and fraud prevention tools.

Learn more about how iATS can keep your customers safe.

2. Your customers' security obligations may not be clear.

When accepting online payments of any kind, it's important for your customers to understand what's expected of them in terms of maintaining security standards.

While working with an aggregator can limit your customers' scope of compliance, customers will still need to ensure their own compliance with the Payment Card Industry set of standards to avoid fines or even suspended accounts.

While a payment aggregator will be PCI-compliant themselves, they won't help your customers understand their own compliance responsibilities or work with them to become compliant. They'll simply open the account and let your customers deal with any noncompliance ramifications down the line.

A dedicated merchant account provider, on the other hand, can provide resources and one-on-one assistance to walk your customers through their responsibilities and ensure that no compliance issues occur.

Ensure that your customers can answer the following questions:

How do we become PCI-compliant?

What fraud prevention tools does our organization need?

How do we handle disputes or suspicion of fraudulent activity?

PCI noncompliance doesn't just lead to fines; it can also affect your customers' ability to identify and combat fraud.

Learn more about how your nonprofit customers can keep themselves and their donors secure.

3. Aggregators won't give your customers control over their accounts.

Unlike dedicated merchant account providers, payment aggregators store all of their merchants' payments in one shared account.

That being the case, your customers won't have control over the transactions taking place within their account, and they'll likely be affected by the behavior of other merchants. 

If another organization, business, or individual using your aggregator account happens to be a fraudster (or is a victim of fraudulent activity), the aggregator may shut down the entire account. 

That means that even though your customer did nothing wrong, all of their transactions will be stalled or suspended.

With a merchant account provider, the customer has full control over their own account and therefore won't have to deal with interruptions or account freezes.

A dedicated processor can also work with your customers on an individual level to answer questions if you do run into account trouble or potential fraud. 

Because aggregators store all transactions in one account, your customers are more likely to experience:

Unexpected Account Freezes

Withheld or Delayed Funds

Limited Customer Support

iATS provides individual merchant accounts to each of your customers.

With personalized support and customized solutions, iATS is committed to serving your customers in every way possible.