Merchant Account Vs Processing Aggregators

Given how many times we’re asked “What’s the difference between Payfirma and Square?”, “What’s the difference between Payfirma and PayPal?”, etc., we could start a drinking game.

There are many minute differences between us and those companies, but the biggest difference lies in our payment processing models. Payfirma is a merchant account provider, whereas companies like Square and PayPal are processing aggregators.

Let’s compare

As a merchant account provider, Payfirma sets up merchants with their own dedicated merchant account: a type of bank account required for businesses to be able to accept payments by debit or credit cards. While a payment processor, like Payfirma, may set up the merchant account for businesses, the actual agreement is between the business owner and an acquirer: a type of bank that provides the merchant account.

Processing aggregators, like Square and PayPal, allow merchants to accept credit card and bank transfers without having to set up their own merchant account. They pool a bunch of merchants together into one big aggregation, and each merchant processes payments with a joint merchant account.

Aggregators have a quick set-up process and as a result, a low entry barrier for all businesses. This means that they can onboard many higher-risk businesses that merchant account providers can’t. In order to qualify to perform this service, a processing aggregator and their acquirer must meet several different standards and follow the rules set for very high-risk accounts by the credit card associations.

Merchant account provider




  • Merchants own their own dedicated merchant account.
  • Merchants share an aggregator’s joint merchant account with other merchants.
  • A lengthier application process.
  • A quick and simple application process.
  • Requires time and due diligence; merchants must apply and get approved.
  • Requires very little downtime; merchants can start processing payments instantly.
  • Merchant account providers gather information (i.e. regular processing volumes) which mean fewer interruptions to processing activity. And if there’s unusual behavior, merchants will be notified, rather than finding out when their account is frozen or terminated.
  • Aggregators inherently carry a higher risk for fraud which means they will exercise greater levels of caution when it comes to suspicious activity or irregular transaction behavior. This means more account freezes, holds, and/or sudden terminations.
  • Merchant account providers are able to tailor rates to each individual business – offering more competitive pricing.
  • Aggregators typically have fixed rates, which can become pricey as merchants process more.
  • They will grow and scale with businesses so merchant account providers have higher processing limits.
  • As they have their own rules to abide by, aggregators have lower individual and annual processing limits.
  • With little to no interruptions to processing activity, merchants typically see funds in their account within 1-2 business days with merchant account providers.
  • Merchants relinquish control over funding and must rely on aggregators to transfer funds from the joint merchant account to merchants’ bank account. Aggregators can potentially withhold funds if they wish.

What does that mean for your business?

Both models have their pros and cons – it simply comes down to your unique business.

For merchants processing at lower volumes, seasonal businesses, or start-up companies, an aggregator is an ideal payment partner. The costs are straightforward and simple-to-understand. However, because aggregators typically offer fixed rates, businesses processing more than $40k will almost always save costs with a merchant account provider’s tailored fees.

For an established or growing business with a higher volume of transactions, a merchant account provider would be more beneficial. It requires more time and commitment at the onset, but once set up, you can rest easy knowing that your funds are rolling in.  A merchant account provider is equipped to grow with your business and help you scale. You will have access to a wider range of payment channels/products which will enable you to do business in more ways and in more places.

Ultimately, it boils down to choosing what is best for your business.

Now you know the difference between a merchant account provider and an aggregator, check out Top Payment Processors in Canada to help you evaluate your options.