What is a payment gateway?
A payment gateway is an online platform that enables secure transactions between a customer and a merchant’s bank or financial institution. It allows for the quick and seamless transfer of payment information, including credit card and bank account information, to process a transaction.
In India, where the digital payments market is rapidly growing, choosing a reliable and secure payment gateway provider is crucial. Merchants should consider transaction fees, ease of integration, customer support, and security features when selecting a payment gateway provider. Understanding the payment process journey can help businesses decide on the best provider for their needs.
Essential terms in the payment gateway
When looking for the best payment gateway in India, it’s essential to understand the key terms involved in the online payment process. Merchants from various industries offer products or services to customers who initiate purchase transactions. The acquiring bank sends the merchant’s transaction to the issuing bank, which issues credit and debit cards to the cardholder.
Examples of issuing banks include Rupay, Master Card, Visa, American Express, HDFC Bank, SBI Bank, ICICI Bank, Axis Bank, and more in India. Selecting a reliable payment gateway provider that offers secure transactions, reasonable transaction fees, excellent customer support, and easy integration with your website or application is crucial.
What is the difference between a payment gateway and a payment processor?
|
Payment Gateway |
Payment Processor |
| Facilitates the transfer of customer payment data to the acquirer | Responsible for verifying and approving transactions |
| Provides acceptor and decliner information back to the customer | Transfers funds from the issuing bank to the merchant’s account |
| Acts as a bridge between a merchant’s website and the acquirer, protecting the transmission of sensitive credit card information | Ensures the availability of funds and facilitates merchants’ payments |
| Offers a platform for merchants and acquirers to manage sensitive card information | Transfers funds quickly from the issuing bank to the merchant’s account |
| Essential features to consider when choosing a payment gateway include security, easy integration, and competitive pricing | Essential features to consider when choosing a payment processor include reliability, transaction fees, and customer support |
Benefits of Using the Best Payment Gateway for Your Business
When conducting business online, having a reliable payment gateway is essential. While some may view it as just a mediator, securing online transactions is critical. Unlike physical transactions, online payments cannot be made with a physical card that can be swiped at a POS terminal. Instead, customers must enter their information on the payment page, which can increase the risk of fraud. However, a payment gateway can help reduce the risk of card-not-present transactions.
Without a payment gateway, fraudsters can easily exploit a business’s data and initiate illegal transactions that can lead to chargebacks. Such an instance can harm a business’s financial standing and damage its brand image. By using a payment gateway, businesses can protect themselves from these risks and ensure that their customers’ sensitive payment information is secure.
A high-quality payment gateway, such as Easebuzz Payment Gateway, acts as a steward of a business’s customer payment data. It facilitates the relay of information between the merchant, the customer, and the bank offering the payment. The gateway encrypts the sensitive card information, protecting it from unauthorized hackers, expired cards, insufficient funds, and exceeding credit limits. Ultimately, having the best payment gateway can give businesses and customers peace of mind while facilitating smooth and secure online transactions.
The Importance of Payment Gateway for Secure and Reliable Transaction Processing
Regarding online payments in India, payment gateways are crucial for processing transactions. Here’s a process breakdown if you’re wondering how the best payment gateways work.
When making payments online, having a merchant account is essential. In India, merchant accounts can be obtained through payment gateways, payment service providers (PSPs), acquirers, payment processors (PSs), high street banks, or independent sales organizations. Once your application is approved, you will be assigned a unique Merchant Identification (MID) number, which will be used to process credit card transactions and transfer funds from your customers’ issuing banks to your bank account. This method provides
- a quicker checkout process,
- a consistent user experience, and
- more control over the appearance of the payment page.
Once the customer enters their cardholder details, the payment gateway securely transmits the information. The payment gateway validates and encrypts the data before sending it to the acquiring bank. Then, the acquiring bank transmits the information to the card schemes like RuPay, Mastercard, Visa, American Express, and various banks like HDFC Bank, SBI Bank, ICICI Bank, Axis Bank, and more.
The issuing bank performs fraud screening before authorizing the transaction. Once the payment data is approved, the card scheme sends a message to the acquiring bank, which collects the funds from the merchant’s account. The settlement occurs when the funds are deposited into the merchant’s account according to their agreement with the payment gateway. The merchant can then display a payment confirmation page or offer another payment method based on the message received.
One essential feature of payment gateways is client-side encryption or encryption at the source, which encrypts sensitive data on the client’s device before sending it to the merchant’s server. Payment gateways like Easebuzz provide encryption libraries to help merchants comply with PCI compliance.
While most of the payment gateway activity occurs in the background, it benefits merchants and customers. The entire process can be completed in nanoseconds, ensuring a seamless and secure online payment experience. In conclusion, the best payment gateways in India are crucial for facilitating secure online transactions, and understanding how they work can help you make informed decisions about which payment gateway to use.
Merchant Payment Gateways: What You Need to Know About Merchant Accounts
When making payments online, having a merchant account is essential. In India, merchant accounts can be obtained through payment gateways, payment service providers (PSPs), acquirers, payment processors (PSs), high street banks, or independent sales organizations. Once your application is approved, you will be assigned a unique Merchant Identification (MID) number, which will be used to process credit card transactions and transfer funds from your customers’ issuing banks to your bank account.
But why can’t money be directly transferred from the issuing bank to your business bank account? You need a merchant account to ensure a smooth and secure approval chain from when a customer submits their card details until you receive payment. Additionally, as an online seller, you may experience returns, which will be deducted from your merchant account. Once returns have been processed, the remaining funds will be transferred to your bank account.
Ease of payment is also a significant benefit of having a merchant account. Payment gateways like Easebuzz collect deposits from multiple sources and combine them into one account for your bank account, making reconciliation easier. You will need two merchant accounts if you are both an online merchant and a brick-and-mortar merchant. Payment reconciliation can be done by comparing your bank statements with your accounting, payment gateway, or PSP records.
In short, a merchant account is crucial to online payment processing in India. Obtaining a merchant account through a payment gateway or other authorized providers allows you to safely and securely process credit card transactions and receive customer funds.
Difference Between Payment Gateway and Merchant Accounts
| Payment Gateway | Merchant Account |
| Function | Facilitates online transactions by processing payments securely and providing various payment options for customers. |
| Service Providers | Offered by payment gateway providers, payment service providers (PSPs), acquirers, payment processors (PS), high street banks, or independent sales organizations. |
| Purpose | The payment gateway ensures that a customer’s payment is securely transmitted from their issuing bank to the merchant’s acquiring bank. |
| Transaction Processing | The payment gateway facilitates online transactions, processes payments, and provides various payment options. |
| Payment Reconciliation | Payment gateway and transaction records must be compared with accounting records to reconcile payments. |
Latest Trends in the Best Payment Gateway in India
As online transactions grow, businesses need reliable and secure payment gateways to facilitate their customers’ payments. With the increasing demand for online payments, the payment gateway industry constantly evolves. Here are some of the latest trends in the best payment gateway providers:
Mobile Payments:
More and more people are using their mobile devices to make payments, and payment gateways are adapting to this trend by providing mobile-optimized payment options. The best payment gateways offer their customers a seamless mobile payment experience, making it easy to make payments on the go.
AI and ML:
Artificial Intelligence (AI) and Machine Learning (ML) are used to enhance fraud detection and prevention in payment gateways. These technologies are used to analyze data and detect patterns that can identify potentially fraudulent transactions. The best payment gateways leverage AI and ML to enhance security measures and provide customers with a safe and secure payment experience.
Blockchain:
Blockchain technology is gaining popularity in the payment gateway industry due to its decentralized and secure nature. Blockchain technology can help to eliminate intermediaries, reduce transaction costs, and provide a more secure payment experience. The best payment gateways are exploring blockchain technology to provide a more secure and efficient payment solution.
Integration with E-commerce Platforms:
Payment gateways are now integrating with popular e-commerce platforms to provide a seamless payment experience to customers. The best payment gateways offer integrations with a wide range of e-commerce platforms, making it easy for businesses to accept payments online.
Contactless Payments:
The COVID-19 pandemic has accelerated the trend towards contactless payments. Payment gateways adapt to this trend by providing contactless payment options such as NFC payments, QR codes, and mobile wallets. The best payment gateways offer various contactless payment options to provide customers with a safe and convenient payment experience.
In conclusion, the best payment gateway providers constantly innovate to provide customers with a safe, secure, and convenient payment experience. By keeping up with the latest trends in the payment gateway industry, businesses can choose the best provider that suits their needs and provides a seamless payment experience to their customers.
Payment Gateway-Related FAQs
What types of payment gateways are available in India?
India has hosted payment gateways, self-hosted payment gateways, and API-based payment gateways.
How much do payment gateways in India charge for transactions?
In India, the payment gateway provider will deduct fees per transaction basis, typically ranging from 1.8% to 2.5% of the transaction rate once the payment is made.
Payment gateways charges in India?
Payment gateway charges in India range from 1.7% to 2.5%, determined by the provider and business. Deducted per transaction at a fixed rate, typically within the range of 1.7% to 2.5%, with no setup or annual maintenance fees for most providers.
UPI payment gateway charges in India range from 1.7% to 2.5%, depending on the provider and business. The charges are deducted per transaction at the fixed rate of the chosen provider. Importantly, there are usually no setup or annual maintenance fees for UPI payment gateways
What payment methods are supported by payment gateways in India?
Payment gateways in India support credit/debit cards, net banking, mobile wallet payments, and UPI payments.
How easy is integrating a payment gateway with my website or e-commerce platform?
Payment gateways in India offer various integration options, including plugins, APIs, and hosted payment pages. Integration difficulty varies by payment gateway provider.
