Life-cycle of Digital Payments for a Card Payment Gateway

The concept of digital payments was born out of convenience and control for consumers. It is only natural for this concept to be consumer-centric as in all markets the consumer is king. Today we will take a closer look at the complex process of digital transactions in a card payment gateway that make life so easy for us. The gateway is a piece of technology through which several merchants and platforms are able to connect from the website to their customers’ mobile devices.

Verification

Once on the other side of the payment gateway, vendors ensure the transaction and consumer behind the transaction is legitimate. Vendors verify details by matching shipping and card addresses, CVV code, blacklisting for credit card default, and IP address. These checkpoints are essential to protect merchants from unnecessary and avoidable costs.

Involvement of Banks

After all the verifications are made, payment requests are routed to the customer’s issuing bank and the merchant’s acquiring bank. Funds are exchanged between these two parties. The card payment gateway sends the initial transaction request to the merchant’s acquiring bank, in response to which this bank requests a payment from the customer’s bank via the payment gateway. When communicating with the customer’s bank, payment gateways run a series of fraud prevention measures. The message of a declined transaction is relayed by the gateway to the customer through the merchant and all in a matter of microseconds.

Settlements

If things have flowed smoothly till this point, the merchant sends a ‘settlement request’ which is a way of confirming their action of charging the customer’s issuing card.

Bill Splitting

Some payment gateways even have an option to divide funds between sellers and facilitating platforms and maintain individual ledgers to do so.

All digital payments through payment gateways follow this cycle. A card payment gateway that stands apart is one that is reliable, secure, scalable, and offer tech-support. Easebuzz is one such platform that enables quick and easy payments end-to-end for upcoming businesses across India.

Top Payment Trends in the Digital Landscape

India has experienced some amazing shifts in the digitisation of payments over the last two years. Demonetisation brought about a strong impetus for consumers to switch to cashless methods of payment. 

There has been an increase in adoption of digital instruments which have been aided by a rise in merchant outlets, and proliferation of UPI which has simplified money transfer to banks. 

Merchants accepting card payments have increased by twice as many coming to about 3 million merchants with the number of UPI transactions rising up to 250 million in June 2018.

What’s interesting is that a major portion of the activity in digital payments has been led by non-banks. E-wallets and payment gateways in India have gained significant prominence. Digital payments are expected to evolve rapidly in the next few years to overtake cash spending by 2020. 

Below are the top 5 trends that will drive this change:

1. UPI

The technology underlying UPI enables instant payments from one bank account to another and is path-breaking. Users are often inconvenienced when they have to log into websites or apps VPAs. Third party providers who offer payment apps on top of UPI using open APIs make this process convenient and almost invisible. This enables many consumers to access UPI and use it for peer-to-peer payments.

2. QR code

With the use of the QR code technology for digital payments at merchant outlets, the need for expensive EDC (electronic data capture) machines or NFC (near-field communication) devices is eliminated. This improves the economics of merchant acquiring. A rise in merchants accepting non-cash payments is expected owing to this advantage. Mobile phones will be the device of choice for payments using QR codes. Traditional acquiring models will get disrupted, and new-age acquirers will offer value added services to merchants in order to make acquiring business economically viable.

3. Zero transaction fees

Government incentives and competitive forces are driving the economics of payment transactions to a decline. The RBI (Reserve bank of India) has capped merchant discount rates for debit card transactions at 0.4%. Most fintech firms are giving their payments services for free. This downward trend is expected to continue and will lead to payments being offered for free with players looking to monetize data through sale of other financial and non-financial products.

4. Cybersecurity

With greater focus being placed on customer acquisition and driving adoption of digital payments, risk management and fraud control haven’t been as stringent as they should be. Cyber-attacks have been reported to have caused alarming financial damages of more than $500,000 to Indian companies in the last 12 months alone.

It is imperative for digital payments players to embrace new technologies like biometric authentication, AI, ML and pattern matching for real-time fraud prevention for digital payment transactions.

5. Payments space

A large number of new players have ventured to join the space of payment gateways in India in the last couple years. Some of them offer niche solutions. From the perspective of consumers ubiquity is important, as they look for instruments that can be used for both purposes online and offline.

This space is expected to witness consolidation with a few large players dominating the market in the coming years.

Benefits of having an online payment gateway with UPI

Unified Payment Interface (UPI) is among the most advanced method of payment among all the options available for digital commerce.

This payment mechanism allows instant money transfers without bank details. It does so using a virtual payment address.  In this article we look at the benefits of UPI:

1. Cheapest Way of Money Transfer

UPI is the most economical method for fund transfer. The nominal charges make UPI a strong way to promote non-cash transactions of small amounts.

2. Secure

UPI minimizes and mitigates cyber security concerns. Since bank details and information isn’t requires for payments using UPI the risk of them being hacked is eliminated. Also the authentication takes place at your smartphone. The level of security is increased by using two different PINs. You can easily make it discrete while typing at your smartphone.

3. One UPI App Many Accounts

When you use an online payment gateway that has UPI as a feature, you no longer need multiple apps for different bank accounts. A single UPI can be used to access many bank accounts.

4. COD Without Paying Cash

About 80% people choose the option of cash on delivery while shopping online. Behind this choice lies a simple apprehension about being delivered the wrong product. Also for expensive purchases you may not always have cash on hand or an ATM nearby. UPI puts an ends to this hassle. With UPI you can choose the COD option without actually paying in cash and using the instantly UPI fund transfer. Of course the merchant should be using the UPI fund collection facility as well.

5. Immediate Payee Registration

Usually a waiting period is required before you can make transfers to a new payee online. This time could be from half an hour to up to 48 hours. UPI requires no waiting time, so an online payment gateway with this feature is the most preferred choice for e-commerce businesses.

Owing to the many advantages relating to cost, efficiency, ease for customers, and highly secure nature of transactions that UPI brings, it is the most coveted feature ecommerce owners look for while choosing an online payment gateway. If you are in search of a payment provider for your online business or are looking to change from your existing one, take care to check for the UPI feature before you finalize your decision.

Signs That You Need a New Payment Gateway

If you have any kind of online business, the payment provider you choose is one of your most important partners. It is an indispensable interface between you, your customers, and your bank and allows safe, convenient, and timely transactions between you and your customers.

Seeing the significance of your payment gateway partner keeping its performance in check is necessary. Keep a keen eye to check for any of the following signs that reflect whether your payment provider is benefiting or costing your business:

Sign #1: Not enough payment options
Customers like to have more than one payment option. With the level of distrust around online transactions still not vanquished, more payment options help instill trust in customers towards your offering. Credit cards, debit cards, and direct bank transfers are major payment methods in the market that customers expect from you if not more.

A good payment gateway should not only offer all three payment methods, it should also be easy to use for you as the merchant. Steer clear from gateways that require you to create or log in to more than one account, or download multiple reports. Concise, comprehensible, easy to access information about every transaction through your gateway should be stored in one central location, from where it can be downloaded and interpreted easily.

Sign #2: Customers need to register twice through your payment gateway

Greater the number of hoops your customer has to jump through to complete a purchase, the more likely they are to leave halfway. If your website requires your customers to register before they can start shopping, they might grumble a little but most of them will stick with you. Asking them to register a second time before they actually make the payment can be problematic. You want to choose a payment gateway that makes the entire purchase process easier, not more complex.

Sign #3: Expensive or weak fraud protection
A number of specialist fraud protection services exist but they are quite expensive and time-consuming to run. You want to partner with a payment gateway that offers affordable and easy to use fraud protection. This isn’t something you can risk ignoring as its one of the most important measures you can take to protect yourself against fraud. Ensure your gateway safeguards you from credit card fraud.

Ultimately it comes down to customer focus: As an online retailer, you want the effort you put into making your site experience a memorable, one that pays off.  If that effort is undermined because of your key partners it’s time to make some important changes. If you’re in search of a new partner, visit Easebuzz at <link>, one of the best options for a payment gateway India has.

Role of Payment Gateways in the Growth of SMEs

For the longest time small businesses have looked at e-commerce giants such as Amazon, E-bay, and Flipkart with envy. However the tide appears to be turning in the favor of the little guys.

Online payment gateways are encouraging and educating SMEs to establish a strong presence in the e-commerce market with the help of online payment systems.

Taking their businesses online will facilitate a greater occurrence of innovations for SMEs. For this steps are to be taken, to make business owners comfortable with using apps and other high-end technology.

The SMEs who have jumped on the payment gateway wagon have reported a 10% increase in the number of clients, increased visibility, and greater networks which resulted in a higher number of leads.

Easebuzz, a high-ranked payment gateway in India is one such entity that handles end to end payment flow for growing businesses across the country. 

Their services include creating multiple stores according to the businesses’ requirements, payment link solutions, and a single platform for handling complex processes from one place.

With Easebuzz, business owners have the option to create products like events tickets, physical items, digital items or subscription based services with a free integrated payment gateway.

Business owners also have the option to connect and share links of their web-store with their customers using any social media channel. 

This is one payment gateway in India that makes the process of collecting payments faster and smarter.

Customers are updated about order statuses through an automated order tracking system, the marketing tool by Easebuzz can be utilized to send mass e-mails and SMSes to a large audience, your webstore will be available on multiple platforms with optimized performance so that your business has high accessibility.

Furthermore, Easebuzz also allows business owners to use real-time reports and analytics derived from their dashboard to make faster and more informed business decisions.

For SMEs who are looking for a payment gateway in India to help them get their business online and make a strong footing in the world of e-commerce, this is probably your best choice; no one else makes it as easy as Easebuzz does.

Why Do I Need an Online Payment Gateway for My Online Business?

Adoption of digital payment methods chosen over cash or other modes of transactions is on the rise.

Digital finance and payment methods are powerful tools of improving sales and business for e-commerce merchants.

Unfortunately a lot of merchants are unaware of such advantages and only 40% of merchants are aware and benefiting from this facility.

This article breaks down the significance, uses, and suitability of an online payment gateway for potential or existing online retailers. Read further to learn how payment gateways work and how you can choose the right payment gateway for your business.

What is a payment gateway?

An online payment gateway authorizes transactions for e-businesses, online retailers, or traditional brick and mortar stores. It is used to transfer information between a payment portal and an acquiring bank. Payment gateways encode private information such as credit card details, to keep the information transfer between a customer and merchant secure.

How do payment gateways work?

A payment gateway first pulls information from a credit card transaction, encrypts this information, directs this information to the credit card processor, where the transaction is finally approved or declined. This is a seamless process between you and your customer via your shopping cart and a secure connection.

Why should I use a payment gateway?

Payment gateways are vital for keeping online transactions secure. They can be integrated with most websites and shopping carts online, to streamline online credit card processing. A shopping cart is usually used before the payment gateway. This allows customers to choose items they want to purchase and at the checkout, the shopping cart totals the items, adds tax and shipping and collects customer’s shipping and billing information.

How do I choose the best payment gateway?

Here is a checklist to finding the best payment gateway for your e-business:

1. Budget of payment gateway
2. Time of accepting payments
3. Time of receiving revenue from sales
4. Security of the gateway
5. Cards accepted
6. Compatibility with existing integrations

We hope this article was helpful in answering some doubts you may have had around using an online payment gateway.

Advantages Of Using Payment Gateways In India

Payment gateways authorise payments for retailers in several categories of business. Payment gateways safeguard sensitive information such as credit card details, entered into an e-commerce website and are passed between the customer and merchant and from the merchant to the payment processor by using encryption.

Initially merchant accounts providers and payment gateways operated separately, but with increasing adoption of e-commerce by businesses of all kinds, many processors have started offering an all-in-one solution for merchant processing and gateway services.

Payment gateways offer several benefits for merchants that include the following:

• Secure transactions:

Payment gateways use industry-standard encryption and effectively protect sensitive information, safeguarding both merchants and customers against fraud.

• Larger customer base:

Payment gateways make it possible for customers all over the world to access your business from your online store which in turn works towards expanding and increasing your customer base.

• Bundled with shopping cart:

Gateways club shopping cart software with their own programs. This software makes it possible for customers to choose products with a simple, easy click of the mouse, add them to his/her shopping cart, and complete their purchase at the checkout stage. The shopping cart calculates the cost of the items, sales tax, and shipping charges without you or an employee being present to carry out the sale.

• Faster transactions:

Using a payment gateway is much faster than manual processing which allows customers to make faster purchases without the inconvenience of waiting in long, rushed lines.

• Convenience:

Payment gateways allow you to keep your e-business open 24/7. Your customers can shop at any time of the day, from the comfort of their devices, at the comfort of their homes.

• Customization and user experience:

Payment gateways can be customized to suit the look and feel of a website. Customers need not be directed to an external website to make payments, which helps create a seamless experience for the user and enhances their user experience.

Choosing the right payment gateway for your business helps increase transparency, security, and other features that will make your business flourish.