Adoption of e-payments in India

The adoption of new digital technologies is becoming more and more comfortable for merchants and customers in India’s journey towards e-payments and digitization.

Online shopping is becoming more and more popular and any business must have an eCommerce site and accept online payments.

As online shopping and eCommerce gain popularity, e-payments also are gaining widespread acceptance, as customers can browse digitally and shop from anywhere, at any time in the country.

We will look at the E-payments in India which are growing in popularity for online businesses of all kinds. In this blog, we will explore why e-payments have proven essential for account payable processes.

What is E-Payment?

E-payments are electronic methods of paying for services. The term ‘E-payment’ is also used for online payment systems, which are usually made with debit, credit, or direct deposits into banks.

Businesses decision to accept or use certain electronic payment types is influenced by a variety of factors. The terms “e-payments” and “e-transactions” are synonymous. With e-payments, you will save time and money, you will also experience a decrease in payment processing errors and transaction fees.

Methods of E-payment system available in India

  • The internet is used to transfer money from one bank accounts to another via online banking.
  • Net Banking can be done through NEFT, RTGS, and IMPS.
  • Payment via cards is made through electronic payment devices, including debit cards, credit cards, smart cards, stored value cards, etc.
  • Payment is transferred using an electronic card that has a microprocessor chip, also known as a smart card.
  • Prepaid cards such as gift cards have some money stored in them beforehand to facilitate fund transfers.
  • Direct debit method involves using a third party to transfer funds from a customer’s account.
  • A form of E-cash ensures that the money is stored on the device used for transfers by the customer.
  • Using an electronic check, funds can be transferred within an account.

Join the future of payments! Sign up now for our e-payment system

E-payment methods evolved along with technology (they’re still evolving, actually) these new, convenient alternate e-payment methods quickly became widespread.

  • In electronic wallets (E-wallets), the information about the customer’s account, such has credit/debit card details, is stored allowing the transaction to take place swiftly, seamlessly, and smoothly.
  • Wallets are digital wallets that function as apps that run on mobile devices. They store card information. Mobile wallets are an evolved form of e-wallets. With a mobile wallet, payment is easier, more seamless, and customer dependence on cash is reduced.
  • There has been a boom in QR code-enabled payments in recent years. QR codes are digital codes containing a pattern of rectangular barcodes or squares arranged in a square grid. They contain information about each part of the code. Mobile devices can be used to scan QR codes for payments. The QR code contains the merchants information, the transaction details, and so on.
  • Using RFID and NFC technology, these types of payment are known as ‘tap and go.’ Many cards and payment devices are connected to the terminal using RFID and NFC technology.
  • An instant-real-time payment platform called UPI has been developed by the National Payment Corporation of India (NPCI), which enables mobile payments via a mobile app.
  • In recent times, biometric payment systems have replaced the use of PINs as a method of making payments. These payments are more accessible and convenient than those using PINs.
  • A smartwatch is one of the most popular wearable devices used for making online payments. These devices connect to the customer’s bank account and can make payments online.
  • Increasingly, businesses are using AI-based payments such as Siri, Alexa speakers, chatbots, machine learning tools, deep learning tools, to enhance transparency. As AI is creating a revolution around the nation, AI-based solutions are becoming more popular.

Receive payments easier and faster than ever before. Sign up for our e-payment system

How E-payment Works?

The parties involved in an online payment system

  1. The Merchant – Shop or Online Store Owner.
  2. The Customer / The Cardholder – Persons with debit or credit cards.
  3. The Issuing Bank – Issuing banks are part of the four-party payment model. They are the banks of customers (called cardholders) and they are required to pay merchants (called acquiring banks or acquires) for goods and services.
  4. The Acquirer – Providing merchants with credit or debit card processing services.
  5. Payment Processor – payment processors facilitate communication between banks that issue debit or credit cards and sellers.
  6. Payment Gateway – Users can transfer funds to sellers through payment gateway without supplying bank or credit card account information directly to sellers.

The process of E-payment consists of three steps,

  1. Upon completing the purchase process and choosing a payment option, the customer will enter the necessary details, such as credit or debit card number, CVV, address, expiration date, and PIN, etc. Depending on the chosen payment method, the customer is redirected to a payment page hosted by their bank or an external payment page.
  2. Customers information is authenticated by operates along with other details such as payment information and their account information. Payment gateways or other solutions can act as operators if everything gets authenticated successfully. A successful transaction is confirmed when all the authentication checks are successful; otherwise, the transaction fails.
  3. As soon as the authentication process is successful, the online payment service provider transfers the customer’s money into the merchant’s account.

Simplify your payment experience. Sign up for our e-payment system today

Benefits of E-payments System

  1. The trend of shopping online and making payments online has almost become second nature, so accepting online payments is a no-brainer for all businesses.
  2. Customers are reaching more clients domestically and nationally via e-payment systems. These technologies advances are making shopping and banking more convenient.
  3. The e-payment system makes transactions faster and more efficient.
  4. Your accounts payable department will be able to focus on more important value-adding tasks thanks to automation of repetitive and manual tasks with a modern e-payment solution.
  5. Payments made electronically improve relationships between businesses and suppliers by improving visibility and transparency throughout the entire process.
  6. E-payment makes it easy for customers to pay online anytime, anywhere, so e-payments are convenient for them.
  7. Many payment processors offer various types of payment processing solutions, making it easy to integrate online payment solutions into your business.
  8. Customers and merchants benefit from secure, reliable, and anti-fraud online payment solutions.
  9. With e-payment methods and systems, you can ensure the security of your payments using payment tokenization, encryption, SSL and more.
  • Payments made electronically are cheaper, easier, faster, and usually in real time, making them a highly effective way to conduct national or international transactions.


Majority of businesses are interested in increasing e-payments, but the most significant barrier is suppliers willingness to accept e-payments and their ability to enroll vendors. Integrating Easebuzz Payment Gateway with Neobanks services can really help you expand your electronic payment process and reap more benefits.

Easebuzz Neo (Business Banking) provides the most convenient and relevant online payment solutions according to the preferences of your target audience.


1. What do you mean by e-payment?

E-payment, or electronic payment, is a payment method that allows you to transfer money electronically from one party to another. E-payments are often made through a secure website or app, and they can be used to pay for goods and services online, in-store, or over the phone.

2. How does the e-payment system work?

E-payment systems typically use a secure network to transmit payment information between the payer and the payee. The payment information is encrypted to protect it from unauthorized access and is usually transmitted using a secure socket layer (SSL) connection.

3. What are the methods of e-payment?

There are several different methods of e-payment, including:

  • Credit cards: Credit cards are one of the most popular e-payment methods. Credit cards offer a high level of security and can be used to make payments online, in-store, or over the phone.
  • Debit cards: Debit cards are similar to credit cards but only allow you to spend money in your bank account. Debit cards are a good option for people who want to avoid paying interest on their purchases.
  • Net banking: Net banking allows you to make payments online using your bank account details. Net banking is a secure way to make payments, and banks offer it at no extra cost.
  • UPI: UPI stands for Unified Payments Interface. UPI is a payment system developed by the National Payments Corporation of India (NPCI) that allows you to make payments using your bank account details. UPI payments are quick, secure, and convenient.
  • Wallets: Wallets are an e-payment system that allows you to store your payment information and make payments online or in-store. Wallets are a convenient way to make payments and can be used to store multiple payment methods.

4. What are the risks of e-payments?

There are several risks associated with e-payments, including:

  • Fraud: E-payments are vulnerable to fraud, as hackers can steal payment information and use it to make unauthorized purchases.
  • Security breaches: E-payment systems are vulnerable to security breaches, which can expose payment information to unauthorized parties.
  • Malware: Malware can be used to steal payment information from e-payment systems.

5. What are the steps in the e-payment process?

The steps in the e-payment process typically include:

  1. The payer selects the e-payment method they want to use.
  2. The payer enters their payment information.
  3. The payment information is encrypted and transmitted to the payee.
  4. The payee verifies the payment information.
  5. The payment is processed.
  6. The payer receives a confirmation of the payment.

Ready to go cashless? Sign up for our e-payment system and receive payments on the go.


The author writes about fintech, banking, and future of SAAS services. He works as an SEO analyst at Easebuzz, so if you're looking for an account that tracks India's fintech scene, you should check out his Easebuzz blog.