Payment gateways are enjoying a steady business with the growth of eCommerce industry

With a major chunk of e-commerce industry based in Delhi-NCR, online payment gateway companies in the region are betting big on the opportunities ahead in business hubs like Gurgaon and Noida. “Gurgaon has emerged as a corporate hub with world-renowned MNCs opening up their India offices here,” said Nitin Gupta, co-founder and country head of PayU India.

“In fact, many big and small e-commerce companies have mushroomed in its vicinity, a key factor which influenced us to set up our headquarters here. It ensures that we are in close proximity with our clientele and this helps in our day-to-day operations as well.” Since its inception in October 2011, PayU India has acquired more than 1,400 merchants as on date, many of which are based in Delhi-NCR. Headquartered in Gugraon, PayU India is the flagship company of the Naspers Group, a $25 billion media and Internet company listed in Johannesburg and London Stock Exchange.

How Do Payment Gateway Works

To accept any online payment through credit cards, debit cards or net banking, an e-commerce owner needs a merchant account with a bank. Now, setting up a merchant account with each and every bank is a tedious task for any e-commerce player and in most of the cases there is little or no support from banks in terms of customer service. Therefore, it becomes imperative for online businesses to opt for a payment aggregator, which connects the merchant’s website with the bank’s payment gateway and provides multiple payment options — like credit card, debit card, net banking and cash cards — to an online shopper enabling him/her to choose a convenient payment option. Also, payment gateway companies have tie ups with almost all nationalised and private banks which considerably reduces the merchant’s efforts to tie up with banks individually.

“In many cases, the onus of providing customer service, compliance certification (like PCI DSS) and data security lie on the shoulders of the payment gateway providers again reducing the running cost of the online merchant manifold,” said Gupta. “This makes a payment gateway an integral step in the value chain of e-commerce business, without which it’s a herculean task for any merchant to accept online payments,” he added. His company is a payment aggregator, which provides payment gateway integration to online businesses.

Capital Proximity

Connectivity with Delhi and IGI Airport are added advantages. In NCR, PayU India’s clients include Goibibo, Jabong, Ferns n Petals, Snapdeal,, Rechargeitnow, Zomato, etc. “Delhi-NCR is a prime location for e-commerce players,” said Harinder Takhar, CEO of PayTM, whose clients in Delhi-NCR include Homeshop18, and DishTV. “Furthermore, there is an availability of quality office space at economical prices and good connectivity and infrastructure. With its development, Noida is as well running after Bangalore crown as India’s

Tech Eden,” Takhar further added. Noida-based PayTM launched its online payment gateway services in August 2010 with 1,200 transactions per day, which has now increased to as much as more than 1 lakh transactions. “In a day we have around 74,000 users,” said Takhar As per Gupta of Gurgaon-based PayU India, the total market size of the online e-commerce in National Capital Region is close to $1.2 billion out which PayU has 25 percent of the total market share. “Aggregators other than PayU, which are based out of NCR are Zaakpay and PayTM.

However, among these three, PayU has more than 90 percent market share in National Capital Region,” he further added. While PayU India charges a set up fees, TDR (transaction discount rate) per transaction and additionally sign up an annual maintenance contract with merchants, PayTM charge per transaction and for their additional services such as fraud scoring engine or bank traffic router management.

Payment gateways protect credit card details by encrypting sensitive information, such as credit card numbers, to ensure that information is passed securely between customers and merchant and also between merchant and payment processor and cannot be intercepted and obtained by anyone. To make online commerce more secure and hassle-free, players have put up the latest technologies in place. “We have our proprietary fraud scoring engine to curb online fraud which monitors our online traffic on various parameters,” Thakur said.

Our fraud engine monitors the time of the day, the kind of product the user is purchasing and about a hundred other attributes. It analyses these to determine the likelihood of a particular transaction being fraud or not,” explained Thakar. PayU India, on the other hand has recently tied up with Retail Decisions, a world leader in online fraud prevention, to provide increased protection to Indian merchants in case of international transactions. “We are the first payment aggregator to introduce device finger printing in India. It combats with fraud even if a user account has been compromised. Moreover this solution is available at a price which is a fraction of any such solution currently available globally,” said Gupta.


There are few other important features that payment gateway providers offer. “A payment aggregator who provides the highest conversion rates should be an obvious choice for start-ups. They should look for testimonials by other e-commerce players who are using a specific gateway as to how much have their conversion rates increased after going live with a particular gateway,” suggest Gupta. Costs (set-up fees and TDR) vary drastically between various gateways. Generally, higher the transaction volume, lower is the transaction cost.

“Also, the real costs associated with accepting online card payments do not start and end at the rate quotations. Owne should look beyond these quotes and consider the overall long-term operational cost of partnering with each gateway. For instance, will the payment gateway take the onus of providing expensive PCI DSS compliance? Does the payment gateway have limited support for fraud management,” Gupta added. Technically, a good payment gateway should offer a variety of ways to collect customer card details and process payments. For instance a great aggregator should provide multiple payment options like credit cards, debit card, net banking, cash cards and it should also provide multiple ways to collect online payments like IVR (interactive voice response system over telephone).

Great customer support is a must because often a solution becomes a problem if there’s nobody around to explain or implement it. Ensuring online security and fraud protection a payment gateway is providing is very important. “Check whether these solutions are updated or not. If an aggregator does not have its own fraud solution, then the chances are that it hasn’t fully understood – or care about – the risks a merchant will face. The start-ups should also cross check what kind of security standards the gateway is adhering to,” said Gupta. “They should choose the payment gateway provider based on add-on features like fraud detection and prevention tools, up time and not look solely on the charges,” added Thakur.

Lastly, before choosing a payment gateway company, check its corporate pedigree. “Make sure it has firm financial foundations, a good track record and is professionally run,” said Gupta. To those who want to enter online payment gateway market in NCR, Gupta says, “Online Payments is a highly regulated industry and one needs to have deep expertise on payments and strong balance sheet to scale it up. A couple of million dollars are required to invest in an online payment business.”

Via : Economic Times

Growing number of eCommerce firms in Gurgaon has ensured steady business for payment gateways

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