Comparison of online payment gateways

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Internet penetration can be regarded as one of the most significant advancement in technology of the past few years. In fact, it has become a way of life. Be it shopping, social interaction or administering the conduct of a business, everything is just a single click away. Continuing the very legacy of easing the lives of millions, the recent decades in the history of internet have witnessed a tremendous revolution in the growth of e-Commerce and Internet Banking. It is the effect of this very revolution that the concept of Payment Gateways has acquired a bright limelight.

A Payment Gateway, in the most simplified terms can be described as a service designed to facilitate and authorize an online payment, thus ensuring a healthy e-Commerce. Owing to the nature of e-Commerce where individuals do not physically deal with each other, trust in an online vendor becomes an integral constituent of any online transaction. An effective payment gateway is the torch bearer of this very trust. It facilitates an efficient and encrypted transfer of information during an online transaction, thus ensuring that the sensitive information and details of the payment are fully secured.

E-Commerce industry which was initially the domain of a select few developed nations has slowly outstretched its expanses to the entire world, India being no exception. With this expansion the payment gateway service providers have also made a place in India. The limitless frontiers of Indian market have attracted many foreign players and at the same time have facilitated the growth of many indigenous Payment Gateway Service Providers.

As India stands at a cusp of huge growth opportunities, it becomes imperative to compare the present operational gateway service providers, in order to get a clearer picture. Talking about the global giants who are making a strong foothold in India, the California based PayPal definitely leads the list. This wholly owned subsidiary of online retail giant eBay benefits Indians hugely as it provides currency conversion facility and so is helpful for people dealing with international clients. But as it does not link with the Indian currency, the users have to pay an additional fee along with the basic transaction fees.

Other leading payment gateways in India are CCAvenue, Transecute and EBS.

CCAvenue is India’s largest payment gateway solution. It provides a vast number of payment options to choose from and also facilitates real time payment transaction for various cards and payments, along with a robust multicurrency service.

Transecute is another such popular payment gateway which has been satisfying the specific needs of Indians. In terms of services Transecute can be credited to be one of India’s most liked payment gateway solutions. No/Minimal payment and withdrawal charges combined with various other tax and payment related plans have led it to win many hearts.

EBS has also touched the lives in India. E- Billing Solutions, a part of Ingenico, has expanded across the whole country. Inexpensive and discounted plans have enhanced its popularity. But the most highlighted and significant feature of this gateway is its wide range of plans enabling the customers to select from a vast variety according to ones necessity.

Indian banks have also geared up to provide for the gateway services. ICICI Merchant Services’ PaySeal which comprehensively manages frauds and risks and also offers a very low rate of transaction is a glaring example in this regard. HDFC Bank and Bank of Baroda also have their gateway services.

When one compares the payment gateways in India the mention of Flipkart’s PayZippy is a must. PayZippy was initiated with great spirits but is now in doldrums. Although an official announcement is yet to be made, it is apprehended that this gateway will soon be shut. Flipkart’s strategic investment in another payment company ngpay and also PayZippy’s absence in RBI’s updated list of companies that have been granted prepaid wallet license, are enough signals which direct that PayZippy is now moribund. The early demise of PayZippy suggests that India is yet in a developing stage and more focused strategies are the need of the hour.

Nonetheless, the successful working of other major payment gateway providers and also the presence of various other solution providers like Citrus, IndiaPay, DirecPay, BluePay, ZaakPay etc clearly show that Indian market has a great potential.

 

The comparison of payment gateways in a welfare state like India will always be incomplete if one does not take into account the local problems and also the role of Government.

Unlike the developed nations where online transactions are very popular and compatible, the local problems in developing nations like India have been big impediments. These problems range from less reliable telecommunication infrastructure and power supplies, to low access to online payment mechanisms, to a relatively high cost for personal computers and internet connection when compared to the average income. Along with these, a weak dispute resolution system and even weaker consumer rights are also potential reasons for lower penetration of online transactions.

The need to address these issues brings the Government to the forefront. RBI, the central bank of India has so far been the regulating body for Payment Gateways. With an aim to establish systemic stability and to reduce systemic risk, the RBI has taken several initiatives, like issuing guidelines to set up “Inter-Bank Payment Gateway”, to facilitate online transactions. Another example of RBI’s involvement is the recent shutting down of overseas payment gateway for credit card transactions within India which was facilitated by Uber. This mandate of RBI was followed by a directive that all payment gateways will need to follow a two step authentication process, and linkage to any overseas payment gateway cannot be the basis for permitting relaxations.

Along with these, the RBI also aims at the integration of Payment System in India. This will lead to faster transactions and also lower transaction costs. The launch of NPCI’s RuPay which is an Indian version of Credit/Debit Card; and the proposed setting of Bharat Bill Payment Services or BBPS and the Bharat Bill Payment Operating Units or BBPOUs (as recommended by G. Padmanabhan Committee) which will smoothen the progress of “anytime anywhere” bill payment; are great milestones on the road towards an integrated Payment System in India. This integration can be game changer for the existing payment gateways. The future of a smoother business depends much on the comprehensive cooperation of the regulators and the service providers.

 

In conclusion, it can be said that almost all payment gateways which rely on international standards and protocols to provide a safe and robust mechanism for online payments, can become a bright flash on India’s e-Commerce firmament. Also, the future largely depends on the collective efforts of service providers, service facilitators, regulatory system and of course, the customers.

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Authors:

Team Sandhya and Apurva

 

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2 Comments

  1. Aman Salaka says:

    here comes another masterpiece by Apurva Maheswari. U know the best thng abt ur writing di, it only gets better.:-)

  2. Amita says:

    very good article…….fantastically written
    congratulations for the great job

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