Best Payment Gateways for E-commerce Platforms in 2021

What is a payment gateway? A payment gateway is a digital payments service integrated with an e-commerce platform to send and receive money. The key objective of an online payment gateway is to verify and approve transactions between buyers and sellers. With the help of a payment gateway, e-commerce platforms can build their rapport and assurance regarding the safety and ease of payments.

To send money through a payment gateway, a customer must select their preferred mode of payment. This can include paying through credit or debit card, mobile banking, or direct funds transfer from one bank to another. Later, the customer is requested to enter their details such as credit or debit card number, bank account number, expiry date, and CVV number. A payment gateway service can either be provided by banks directly or through a payment service provider authorised by a bank.

Best Payment Gateways For Your Business

As an e-commerce platform, you must choose the best payment gateway for your business. The payment gateway should be easy to use, secure, compatible with the majority of the banks, and have low transaction costs. Let us now have a look at five of the best payment gateway platforms for your e-commerce business.

1. Cashfree: Cashfree is one of the most popular payment gateways in India. It provides various payment options, including credit and debit cards, over 75+ net banking options, and is compatible with various mobile payment apps such as Paytm, MobiKwik, Freecharge, and Airtel.

Moreover, Cashfree offers a wide range of EMI options, namely, OlaMoney and ZestMoney. The payment gateway is known to have the fastest settlement cycle, ranging between 24 and 48 hours, and its payment gateway pricing is just 1.75% for every transaction. Cashfree also provides advanced payment gateway features such as a Refunds suite that comprises instant refunds, pre-authorisation on card payments, and a feature called Cashgram that includes payout links for refunding COD orders.

2. PayU: PayU, formerly known as PayU Money, is slowly emerging as one of the most popular payment gateway platforms in India. And why not? Since it has zero annual maintenance charges, supports international transactions, has multi-currency support features, a zero withdrawal fee, and is compatible with all CMS systems and mobile operating systems.

However, PayU has a few drawbacks, including an extensive list of documentation required to use it, unresponsive customer service, and higher transaction costs, which is 3% per payment.

3. Razorpay: Razorpay is the only payment gateway in India that permits businesses to accept, send, and process payments using its product suite. Razorpay provides its users with access to all forms of payment modes, including credit cards, debit cards, UPI, net banking, and mobile banking wallets such as JioMoney, MobiKwik, PayUMoney, Airtel Payments Bank, Paytm, PayZapp, OlaMoney, and Freecharge.

Some of Razorpay’s key features are its zero annual processing fee, support for international transactions, zero withdrawal fee, real-time activation, and compatibility with all major e-commerce CMS systems such as WooCommerce, Magento, CS-Cart, Opencart, Shopify, WordPress, Arastta, and WHMCS. Moreover, Razorpay has no hidden charges, no maintenance charges, no setup charges, and GST is applicable at 18% of the transaction fee.

4. Instamojo: The Instamojo payment gateway helps merchants quickly create an account in a hassle-free manner. In fact, sellers don’t need to have a website to use Instamojo. Although Instamojo does not accept payments through mobile wallets as of now, it is compatible with almost all banks in India and is supported by several CMS e-commerce platforms.

The annual maintenance charges for Instamojo are zero, while there is a flat fee of 2% plus Rs. 3 for every transaction made. What’s more? You can start receiving and sending money as soon as you sign up with Instamojo, irrespective of whether your documentation is complete.

However, Instamojo has a few shortcomings. It does not support international payments, takes three days to settle a transaction, and the customer service is relatively slow.

5. PayPal: PayPal is one of the most popular and well-known payment gateways in India and worldwide. It is a global payment platform that is available in over 200+ countries and has roughly 173 million users.

PayPal supports over 100 currencies, has a feature of sending and receiving foreign payments, is secure and hassle-free, zero maintenance charges, and all the payments received via PayPal will be automatically withdrawn to your local bank branch daily. However, to convert transactions into Indian Rupees, you need to pay conversion charges to your bank in India.

How To Choose The Best Payment Gateway For Your Business?

Any business that conducts transactions online requires a payment gateway. Thus, as a business, you must choose a payment gateway that is safe, convenient, hassle-free and helps to send and receive money with ease.

Let us now take a look at the factors that will help decide which payment gateway works best for your business.

• Security: The first and foremost characteristic to consider while choosing a payment gateway is security. Making payments online can be risky as various scammers and hackers are present to steal your valuable information. Hence, it is essential to build trust around your brand, and the best way to do so is by making your payments secure.
• Customer Satisfaction: A payment gateway should also focus on customer satisfaction. Clients will only prefer making payments digitally when they don’t face any hurdles and can send and receive money with ease. Hence, payment gateways should be seamless, quick, compatible with all devices, and secure.

• Worldwide Acceptance: Payment gateways such as PayPal are preferred by millions of people around the world since it supports multiple currencies. If you are a business with international clients, it is best to choose a payment gateway with global acceptance.
• Merchant Onboarding: Normally, an extensive documentation process is required to set up a payment gateway account. The process can take days to complete, due to which sellers have to wait till they can make or receive payments. Thus, a payment gateway should be such that it doesn’t take too much time for setting up and has minimal maintenance, processing, and transaction costs.
• Payment Options: Another crucial factor to keep in mind while selecting a payment gateway is that it should be compatible with all payment options. Such options include credit cards, debit cards, net banking, UPI, and mobile banking wallets. Further, payment gateways must be able to support international payments.

Also Read:

1) Is it Easy to Start a Business in India?
2) What is Financial Planning? Objectives and Components of a Successful Financial Plan
3) What is Financial Analysis? Types, Importance & Purpose.
4) How To Calculate Long Term Capital Gains (LTCG)?

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FAQs

Q. What is a payment gateway, and how does it work?

Ans. A payment gateway is an e-commerce application service provider that authorises transactions made via credit and debit cards, internet banking, and mobile wallets. It enables the transfer of information from a payment portal to the front-end processor or the receiver bank.

Q. How to add a payment gateway to a website?

Ans. If you wish to add a payment gateway to your website, it is best to contact a website developer. Either a pre-existing plugin can be used or APIs will be needed to add a payment gateway, depending upon your operating system.

Q. How much time does it take to complete KYC?

Ans. To complete your KYC, you can either do it instantly through digital wallet apps such as Paytm and MobiKwik or schedule a home appointment for the same. Typically, it takes up to two working days to process your KYC documentation.

Q. Can you still receive money from customers if KYC is not completed?

Ans. Some payment gateways do permit merchants to send and receive money, irrespective of whether they have completed their documentation or not. However, the grace period lasts for a short time, after which you need to complete your KYC as it is mandatory.

Q. What are the payment gateway charges in India?

Ans. In India, payment gateway charges include an annual maintenance fee, transaction charges, and an initial setup fee. While transaction charges range between 1% and 4% for every transaction, annual maintenance charges can be anywhere from zero to Rs. 50,000 per year. Conversely, the initial setup fee can range from zero to Rs. 2 lakh, depending upon the payment gateway you have chosen.