Online Payment Gateways in India


Once Tolman Geffs remarked “People don’t call it e-commerce anymore. It’s called omni-commerce, and it’s idea that digital permeates every step of the purchase chain from product discovery to trial to pricing to actual purchase”.

E-commerce has paved its way from the dictionary which remarks it as procuring and vending of products and services via electronic networks. Basically, it is being directed from firm to firm, between firms and consumers or within the enterprise itself. It laser focuses on financial , sales and above all the networking dimensions of any corporation. These words relates to the pros side of the issue. Through e-commerce has been a prime force in shifting trends in the technological, organizational and cultural paradigms by incorporating the flavours of availability, accessibility and possibility, yet the downsides lies in the aspect of security , reliability and privacy that have staggered the image of e-commerce globally. Transactions performed within fraction of seconds seemed to be attractive, but the identity and confidentiality of information provided by the customers is in the verge of danger. Phishing, hacking and fraud have magnanimously hit the merchandising sector.

“PAYMENT GATEWAYS” in the present scenario has been a saviour from various spam and illegal marketing techniques by fostering safe, secure and seamless transaction. It is primarily e-commerce application service provider acting as a checkpoint that authenticates e- payments via credit cards for various e-commerce transactions with the help of parameters and algorithms. Financial aspects to be looked upon includes set up fee, annual maintenance fee and per transaction fee.

  • It in fact has eradicated disparities with the aid of effective fraud management techniques by including IP checks, email checks and hackers check.
  • It secures the confidential information for example the customer details, the credit card no , expiry date, CVV value ,prepaid cards, mobile cards details ,NFC thereby facilitating a two way pathway between seller – buyer and seller- processing system. It is broadly classified into two types- dedicated and shared payment gateways.

“E-commerce and mobile commerce have dramatically changed the way brands reach customers, making it faster and easier for consumers to make purchases on the fly while avoiding the hassles of going to the store.”- Hil Davis

In Indian marketing context, importance of payment gateways can be judged by effectiveness of e-commerce which has been successfully escalating its roots and payment gateways have been the dynamic pillar in multiplying its popularity. Entrepreneurial activities have boomed in the present scene and evidently the electronic payment techniques have been modified in the past decades. India has been one of the fastest growing electronic payments economies of the world. Payment industries are leading towards new alternatives of payments in order to satisfy various dimensions such as Bank, Telecom, Mobile and other technology based commercials.

  • Various payment modes include credit cards( visa, American express, Dinners Club, Master Card), debit cards(54 banks who are the members of IBA), net banking(private and public sector banks in India).
  • Majority of shares in this sector has been procured by banks like ICICI, HDFC, Citibank, SBI, Bank of Baroda, Kotak Mahindra Bank, with third party vendors like Paypal , ABC payments, Transecute, CC Avenue, Bill Desk and EBS.
  • Robust growth of CAGR up to 61% and unparalleled increase of internet users have paved way for payment gateways in India including national and international retailers.
  • Companies like Ogone , Naspers have also joined the race with Zaakpay, Gharpay, Flipkart, Paytm .


As an outcome of the cut throat competition, large enterprises are pressuring banks for validating the payment revenues. Mostly in India , we have a shopping cart software for finalising our choices and accordingly compare the cost of various choices selected. As a result , the most formidable task is opting for a diversified and genuine payment gateway. Collaborations of various enterprises can prove to be beneficial in a long run so as to harness the best of availed facilities. Various customers according to their requirement opt for best possible gateway that is suitable for the working conditions.

“ There are so many opportunities on the horizon , from mobile exclusives to geo-located offers to better filtering and searching. We’ve only scratched the surface of what’s possible with personalization”- Michelle Peluso

Talking about the economic turnover or the achievements which payment gateways have fetched in the Indian market, over past 5 years the online payment sector has leaped from 100 crores to 30000 crores. The usage of online shopping, ticketing and tourism portals have significantly increased in the past decades. With around 900 million mobile subscribers, 240 million bank account holders , the adaptation of technological advancement has propelled further.

  • According to the figures, domestic market in our country can hopefully enhance from over $125 billion to $260 billion in the coming decades.
  • About 57% e-commerce transactions is done in small towns and the 8 metropolitan cities happen to be the remainders.
  • Primarily if we discuss about prepaid services( 3% of debit cards) has almost $7.9 turnover with a growth rate of 40% successively. The share distribution of prepaid card include 34% payroll cards, 19% travel cards ,27% multipurpose cards and last 5% gift cards. There is a vast scope for propagating the prepaid card market but in India ,the major transactions are being done by banks which rely on credit and debit cards and regulations do not permit other users to use it that significantly.
  • Another segment includes M-payments which has enormously expanded its dimensions with a market turnover of around $1.15 billion and 68% CAGR rate. Though the feasibility, networking and affordability has attracted many users but at the other end problem lies with reliability and of course security which have been prime hurdles in its promotion. Liberalisation of laws together with acceptance can drive the online payment market effectively.
  • NFC payment system has also been started in several cities but it is in its basic stage. Proper NFC enabled devices aren’t available hence its outreach has been limited to few customers.
  • India e-tailing market figures went up to $600 million in 2011 and $9 billion in 2016.


Perhaps ,the problem centred in India is with poor banking establishments and minimal internet facilities in rural regions hence only the urban population can enjoy the perks of payment gateways. Market segmentation is huge and there is a wide gulf between various domestic markets within our country. Also, paucity of registered trademark , lack of awareness , stringent rules and regulations along with popularity of cash on delivery payments have regularly been issues to be discussed upon. Moreover to accept online payments , the seller must possess a bank account in each bank he has to deal with which is itself a soporific task.

After being on the horizon of providing the gist of the importance and scope of payment gateways in our country, we require penning down information regarding the various payment gateway giants, their features ,concepts ,policies and above all are they able to break the hurdles ? How to choose payment gateways is itself a big question whether you are selling small amount of product through a general website or you are vending a large amount of products through the application of e-commerce. Some essential details on which prime concern should be laid upon includes:

  • Cost effectiveness tops the list as excessive price has ironically been the tag mark of payment gateways in India which consumes around3% to 7% in every transaction. Eventually, the thing that matters is how much gross profit an enterprise possess at the end.
  • Secondly, major attention is drawn by payment methods opted by general population in India. We need to analyse the % coverage of market by different payment modes whether it is debit card, credit card or net banking facilities provided by banks. Also, in another way you need to actually judge which the type within credit cards or banks within net banking which actually is a very tedious job.
  • Thirdly, the collaboration of payment gateways and our website also plays an important role as according to the demands of different payment gateways , we need to make necessary amendments in our website we design
  • Charge back policies also matter as it might happen that customers desire isn’t satisfied when they receive the actual product they purchased. So, our policy must be powerful enough to grab charge back amount also.
  • Technical support always pays off because if we come across any technical default and subsequently we are able to overcome it within few span of time, it can count for considerable profit of our company.
  • Easy reporting of our account and multiple user account at different level are actually vital elements in selecting appropriate payment gateway in our country.
  • Above all we need to satisfy our customers with the policies and regulations we have because every big player in the market is dependent on the trust level which consumers have on the products they are selling in the market. Business and consumers are two sides of the same coin.

Now is the time to have a look upon some payment gateway companies which have created benchmark in the history of e-commerce in Indian marketing scenario.

  • CC Avenue- It provides merchants with multi-currency, multiple payment options with online payment processing services like credit card processing through multiple banks , card associations, debit card processing , direct debit to bank accounts of Indian , Chinese and Singapore banks.
  1. Figures reveal that it has one time setup fee up to 7500, 25000, 40000 depending upon the scale of business basically.
  2. Transaction charges through credit card(Visa ,Master Card, Amex ,Diners, JCB) is around 7%, 5%&1.25%, through net banking (45 major banks) around 4% and with debit card around 1.25%.
  3. Annual maintenance cost amounts to 1200, 2400 &3600 again according to the level of transactions performed.

The major drawback in this system is its inability to accept master card, too many complains being faced by the large firms and transaction fee to the customers is deterrent.

  • EBS- It is compact, genuine and has divisional plans with discount offers. Customer plans can also be opted very effectively. TranSafe solutions of EBS plans to cover almost all payment solutions with cheaper plans which has attracted small scale industries to a large extent.
  1. According to the analysed data , set up fee may range from around 12000, 18000, 24000, 30,000 according to the scale of enterprise.
  2. Moreover, the transaction charges accordingly varies respectively from 5%, 4%, 3.75% &3.25% following the set up fees.
  3. It sustains transactions through credit cards( Master card, Visa, Diners Card) and through net banking(Axis Bank, HDFC Bank, ICICI Bank, J&K Bank, Citibank).
  4. Annual Maintenance Cost may ambit up to 3600 respectively with respect to all the set up fees.


Pitfall lies in the similarity in reselling model with the CC Avenues. The transactions are basically bank oriented , they must try to simplify the user interface to enlarge their market size.

  • Paypal – It is one of the most targeted gateway in India. Along with dealing with international clients, it also offers currency conversion facility adequately. Though being one of the eminent player in the global marketing scenario, it does not The additional fee charges and loss due to currency fluctuations have brought disgrace and merchants are quite reluctant towards this.
  • Transecute – It has been the most appreciable and admirable gateway in India. It does not charge fees or withdrawing charges . It is processed within 15 days and one can withdraw weekly. If transaction failure takes place , then it returns the tax being procured.
  1. Amazing the set up fees and annual maintenance cost for Transecute is nil which attracts large ventures.
  2. Transaction charges scale up to 5% and is usually supported primarily on visa and master cards .

Though being an efficient service provider, Transecute is not supported on net banking . Hence, it faces limitation of being favourite within the credit card users and many net banking service availing people are devoid of it.

  • Direct pay- It is most fastest ,ever growing efficient gateway in our country. The most striking feature here is that it offers money for configuration and establishing retail stores based on the ransom we pay. It provides integrated online payment gateway solutions for Indian merchants. Due to low amount being charge by the company, it is most suitable for intial business start-ups basically for the entrepreneurial activity.
  1. Initially , the set up cost can approximately be around 15000 accordingly the transaction charges and annual maintenance cost being 5% and 2400 respectively.
  2. Direct pay predominantly permit transactions via credit card(Visa , Master Card) and net banking(34 bank associates & 51 debits).
  • ICICI Payseal- It was started by ICICI Bank. It provide merchant services to businesses to accept secure online payments with the internet.
  1. Surprisingly , there is no annual maintenance cost but initial set up would require around 30000 including the transaction charges being 3-4%.
  2. It definitely permits the transactions done on visa and master cards.

Snag lies in the usage of Java technology which consumes a lot of time for creating agreement. The customer service is evidently penurious and sensitivity required towards processing information possessed by the companies is remarkably low.

  • HDFC Payment Gateway- It is launched by HDFC. Banking oriented which basically showcases traditional merchant – client relation.
  1. Initial set up would require 50000 and annual maintenance cost with 12000 per annum. Transaction charges range from 3.5-6%.
  2. Transaction is allowed primarily on visa and master cards.

Downsides include services provided are not authentic and application processing needs 3 weeks. It doesn’t look like core service for them.


Future of e-commerce has been the most discussed topic recently. As more and more people are going to access internet through tablets and smart phones, companies will enhance their investments for providing better user interface in the coming era and influx of funds will enhance e-commerce. Ultimately for increasing the standard of living of Indian citizens , companies will have unending quest for improving their services.

“Communication is at the heart of e-commerce and community.”- Meg Whitman


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  1. Sivajothi karuppaiah says:

    Research on payment gateway is amazing

  2. Ashwini says:

    Payment gateway is not only a e-commerce demand but also provide a safer application for m-commerce………..

  3. Shalini chakraborty says:

    Writing on payment gateways has been a marvellous experience perhaps the best part lies in exploring the new dimensions of e commerce which is vital for society.

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