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Selecting The Right Payment Gateway For Your Business

Bhanu Pratap Singh Slathia
23rd Jan 2012
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Whenever I get an enquiry regarding an ecommerce portal, I have to explain what a payment gateway is and most of the time I land up choosing one on behalf of my client.

As a developer it doesn’t make much difference to me what payment gateway my client selects, all I am concerned about is the format in which I need to send the request to the gateway and the format in which I get back the response/status message. For a business owner selecting the right gateway makes a lot of difference.

The aim of this post is to empower people who are planning to setup a payment gateway by providing them a comparative study of popular payment gateway options available in India.

I will not get into details about how a payment gateway works and what you should look for before selecting the correct gateway for your business. Rather I would suggest you to read the Your Story Report on Setting up e-commerce in India.

This post is purely a comparative study of gateways. Hopefully you will be able to select what is good for your business, based on this.

A broad categorization and comparison of the setup fees, transaction and other charges of different payment gateways options available in India:

Company Name One Time Setup Fee Transaction costs(Credit /Debit Cards) Transaction Cost (Net banking) Annual Maintenance Cost(AMC)
CCAvenueRs. 7,500 - Rs. 40,0003% - 7%4%Rs. 1,200- Rs. 3,600
DirecPayRs. 10,0006%6%Rs. 2,400
EBSRs. 6,000- Rs. 3,0003.25% - 6%3.25% - 6%Rs. 2,400
ICICI payment gatewayRs. 30,0003% -5%-Rs. 10,000
HDFC payment gatewayRs. 20,0003% -10%-Rs. 10,000
Bill JunctionRs. 40,0002.5%2.5%Rs. 5,000

CCAvenue

PlansSet Up feesAnnual Software Maintenance CostTDR ***MasterCard/Visa/Diners/Debit Cards/ATM cum Debit CardsTDR ***AMEX/JCB/Cash Cards/Mobile PaymentTDR ***Net Banking
EconomyRs. 7,500/-Rs. 1,200/-*7%*7%*4%*
PremiumRs. 25,000/-*Rs. 2,400/-*5%*5%*4%*
PrivilegeRs. 40,000/-*Rs. 3,600/-*3%*5%*4%*

Terms & Conditions:

* Taxes as applicable will be levied on set up fees, ASMC and Transaction Discount Rate (TDR) charged by CCAvenue.

** Annual Software Maintenance Charge (ASMC) is charged on a per month basis payable in advance every year in April. Merchants signing on after April need not pay the full ASMC fee. The ASMC fee will be levied on pro-rata basis.

*** TDR = Transaction Discount Rate.

EBS

PlansSet Up feesTDR ***Annual Software Maintenance Cost
StarterRs. 6,000/-*6%*Rs. 2400/-
RegularRs. 12,00/-*5%*Rs. 2400/-
SilverRs. 18,000/-*4%*Rs. 2400/-
GoldRs. 24,000/-*3.75%*Rs. 2400/-
PlatinumRs. 30,000/-*3.25%*Rs. 2400/-

Terms & Conditions:

*** TDR = Transaction Discount Rate

Service Tax as applicable (Currently 10.3%)

For Starters Package conditions apply

Transecute

PlansSet Up feesTDR Annual Software Maintenance Cost
One Plan

-

5%

-

Terms & Conditions:

  • Per Transaction Fees: FLAT 5% per Transaction
  • Supported Cards: Visa / Master
  • Application Processing Time: 2 Weeks
  • Service Taxes (Currently 10.3%) extra on all pricing.
  • Doesn’t support Net Banking

Direcpay

One Time Setup Fee Transaction costs(Credit /Debit Cards) Transaction Cost (Net banking) Annual Maintenance Cost(AMC) Credit Cards supported Banks Supported
Rs. 10,0006%6%Rs.2,400Visa, Master CardHDFC, ICICI, Kotak, Yes Bank, UTI, IDBI, CBoP, Citibank etc.

Terms & Conditions:

Service Taxes (Currently 10.3%) extra on all pricing.

BillJunction

Particulars Amount (in Rs.)
System Integration FeeRs.40000/- + Service Tax (ST)
All Net Banking Transactions2.50% + ST
All Credit Card Transactions2.50% + ST
All Cash Card Transactions2.50% + ST
Annual Maintenance Fee (AMF)Rs.5000/-
Security Deposit- RefundableRs.5000/-

Terms and Conditions:

  • System Integration Fee : 100% along with the Merchant application form & KYC
  • Transaction charges will be debited from the Transaction Amount on upfront basis.
  • Security Deposit: As approved by the bank
  • Any new bank that will be integrated with BillJunction will be added to the existing list.
  • Service Taxes (Currently 10.3%) extra on all pricing.

HDFC Bank

Particulars  Details  
Setup Fees Rs. 20000 + Service Tax(one time non-refundable)
Payment OptionsAll Master/VISA credit and debit cards and Net Banking
Per transaction fee3-10% + Service Tax
Annual Maintenance ChargesRs. 10000/- (recurring yearly)
Payment (credit to current account with HDFC)T+1 working days

Terms and Conditions:

  • Fixed deposit could be applicable in case the company does not meet the requirement
  • Service Taxes (Currently 10.3%) extra on all pricing.

Information / Documents required to obtain a merchant account (can differ depending on gateway company/bank)


Sole Proprietor / Individual

  • Web site URL
  • Pan Card/Passport/ Form 60 (If Submitted in last 60 days)
  • Photo id – Passport/ Election Card/ Driving license
  • Sole Proprietor Letter
  • Certificate of incorporation or Certificate of Registration or Shop & Establishments Certificate or Sales Tax / Service Tax
  • Address Verification (Original Copy of Bank Statement/ Electricity Bill/ Landline phone Bill)
  • Bank Verification (On Letter head of Bank or Company verified by Bank with Contact details of bank branch)
  • Lease agreement or ownership deed for business premise / Ration Cards
  • List of Products & Services on Company Letterhead
  • Landline Phone Bill (Original Copy of Landline phone Bill)
  • Last 2 years income Tax Return
  • Last 6 months Bank Statement.
  • One Photograph.( of the Merchant )

Partnership

  • Web site URL
  • Pan Card/Passport/ Form 60 (If Submitted in last 60 days)
  • Partnership Deed
  • Partnership Letter
  • Certificate of incorporation or Certificate of Registration or Shop & Establishments Certificate or Sales Tax / Service Tax
  • Bank Verification (On Letter head of Bank or Company verified by Bank with contact details of bank)
  • Photo id (Passport/ Election Card/ Driving License)
  • Address Verification (Original Copy of Bank Statement/ Electricity Bill/ Landline phone Bill)
  • Lease agreement or ownership deed for business premise / Ration Cards
  • List of Products & Services on Company Letterhead
  • Landline Phone Bill (Original Copy of Landline phone Bill)
  • Last 2 years income Tax Return
  • Last 6 months Bank Statement.
  • One Photograph.( of the Merchant )

Private Ltd /Public Ltd Co

  • Web site URL
  • Pan Card/Passport/ Form 60 (If Submitted in last 60 days)
  • Bank Verification (On Letter head of Bank or Company verified by Bank with Contact details of bank branch)
  • Certification of Incorporation, MoA, AoA
  • Certificate of incorporation or Certificate of Registration or Shop & Establishments Certificate or Sales Tax / Service Tax
  • List of Directors and Signatures
  • Board Resolution signed by minimum two Directors
  • List of Products & Services on Company Letterhead
  • Landline Phone Bill (Original Copy of Landline phone Bill)
  • Last 2 years income Tax Return
  • Last 6 months Bank Statement.
  • One Photograph.( of the Merchant )

NGO

  • Web site URL
  • Pan Card/Passport/ Form 60 (If Submitted in last 60 days)
  • Bank Verification (On Letter head of Bank or Company verified by Bank with contact details of bank)
  • Trust Deed
  • Trust Resolution
  • Certificate issued under registration with the Charity Commissioners office
  • Landline Phone Bill (Original Copy of Landline phone Bill)
  • Last 2 years income Tax Return
  • Last 6 months Bank Statement.
  • One Photograph.( of the Merchant )

Note: All the above documents should be duly stamped & signed

PS: I have heard stories of people negotiating some good deals with payment gateway companies, so do try your luck.

Author: Bhanu Pratap Singh Slathia

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