E-commerce is on a spurt. We all, frequently, purchase things on the internet. But have you ever wondered how does a website communicates with a bank? How the bank transfers money to the website? How is the security of the transaction ensured? Here’s where a Payment Gateway comes into picture.
A Payment Gateway is nothing but an online substitute for the ‘Credit Card Processing’ facilities that we find in a physical store. So, apparently it is necessary an online store to accurately process all the transactions. A payment gateway acts as a link between the website and the bank. It may appear seamless to the customers, but it is very important for their transaction security. PayPal, 2Checkout, Google Wallet, Authorize.net and Amazon Payments are a few well known Payment Gateways in the world.
When you order something on the internet, the encrypted details of your credit card are sent to a Payment Gateway. The information is offloaded instantly. Thus, the risk of a hacker exploiting the information is reduced. Now, The Website’s bank will receive the information from the payment gateway and communicate with the card companies (Visa, MasterCard, etc…). The card company will, eventually, complete all behind-the-scene checks and pass an approval to the payment gateway.
Several factors that must be considered while choosing a Payment Gateway-
Here’s a comparative table of all major Gateway’s operating in India-
| Payment Gateway | Fee(INR) | Credit card Fee (%) | Debit Card Fee (%) | Net Banking Fee (%) | Annual Fee(INR) |
| CC Avenue | 0-40,000 | 5.00-2.50 | 4.0-2.50 | 4.00-2.50 | 1,200-3,600 |
| HSBC Bank | 50,000 | 2.75 | 2.75 | NA | 2,500 |
| Axis Bank | 6,000 | 6 | 6 | 6 | 2,400 |
| HDFC Bank | 50,000 | 3.50-6 | 3.50-6 | – | 12,000 |
| ICICI Bank | 30,000 | 3.00-4.00 | 3.00-4.00 | – | NIL |
| TechProcess | 30,000 | 2.5 | 2.5 | 2.5 | 5,000 |
| Atom | 20,000 | 2.25 | 0.75-1.00 | 2 | 5,000 |
| DirectPay | 10,000 | 6.5 | 6.5 | 6 | 2,400 |
| PayU | 6,000-36,000 | 4.90-2.75 | 1.25 | 4.90-2.75 | 1,200-3,600 |
| EBS | 12,000-36,000 | 5.00-3.25 | 5.00-3.25 | 5.00-3.25 | 3,600 |
An online store which is in its initial stage must keep the cost low. It should choose a payment gateway which offers a free SSL certificate and doesn’t require feeding own components in the server. An already established online store, with a clear sales target, should opt for a Gateway that enables the store to use its own Merchant Account and SSL certificate. A gateway that provides all security measures and advanced integration methods, should be the apparent choice.
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