You finally have a product you are proud of and want to sell it online. You set up your website and start online marketing. You are ready for a customer to order from your website, but now the only question on your mind is, which payment gateway to choose? Should you use UPI or credit cards and debit cards for your transaction? Are there any other payment modes I am unaware of?
This blog post will help you learn about different online payment gateways as well as digital wallets and transactions in different foreign currencies. Making the economic side of your business easy and increasing your international visibility.
Until a couple of years back, setting up a payment gateway as a mammoth task. It used to involve a lot of documentation, verification, huge setup feeds and technical know-how to make it work. But now, it has become very easy to set up a payment gateway for selling your products in India.
When we started ProfitBooks, we evaluated a lot of payment gateway providers and finally settled for 2 of them. We are sharing what we had learnt during the past few years.
5 Things to consider before setting up a payment gateway
Payment gateway cost (Setup fee, TDR, Annual free, etc)
Time to setup everything
User Interface of the gateway
Payment options (Credit/Debit Cards, Netbanking, Mobile Wallets, UPI, etc)
From the growing list of payment gateways in India, I’ve carefully picked 6 best Payment Gateways suitable for small businesses. I have compared these gateways based on the above parameters.
Headquartered in Bengaluru, Razorpay can be dubbed as Stripe of India. We are following the progress of Razorpay for the past few years and they’ve been really impressive.
In just a couple of years, Razorpay has launched truly innovative products such as UPI auto pay, Payment links, Subscriptions, Smart Collect (using UPI, BharatQR, ePOS, NEFT, etc) and Payment Pages.
We believe they are the first company in India to launch a subscription product.
At ProfitBooks, we use Razorpay to collect domestic as well as international payments. We’ve started using it to create ‘payment pages’ for offering deals on accounting software. It’s super fast and easy.
We also use Stripe for collecting international payments and we feel the same level of confidence while using Razorpay. It’s packed with features.
Razorpay also has a very modern-looking interface, giving your businesses a very undated and modern look.
Setup Fee : Zero
Annual Maintenance Fee: Zero
Transaction Fee: From 2% to 3% depending on the payment mode
Brief Review Of Razorpay:
Best part of using Razorpay is their super simple interface. It’s very easy to set up everything. Another great feature is ‘subscriptions–It lets you accept payments on a monthly, quarterly or annual basis. I really liked their email notifications. Razorpay sends emails to our subscribers reminding them about the upcoming payments or failed transactions. These emails are customisable.
Razorpay’s checkout page opens in a pop-up and provides a lot of options to pay. I had to once interact with their support and the experience was good – no issues with that.
Top clients of Razorpay:
Spicejet, 1mg, Bookmyshow, Swiggy, Grofers, Zomato, Airtel, Zerodha
Launched in the year 2001, CCAvenue is one of the oldest payment gateways in India. It has recently overhauled the UI of their website and merchant dashboard. When we were talking with them for integration with our online invoicing software in 2014, they had the slowest onboarding period (15-20days). Nowadays, they are claiming to complete the activation in 24hrs.
CCAvenue supports almost every bank and payment option, included in (UPI, indian and international credit cards) out there. It’s reliable and used by high volume eCommerce websites like Snapdeal. We would strongly recommend this payment gateway to startups if they wave off the annual maintenance charges completely.
Go for CCAvenue if you are looking for a reliable payment gateway in India that is tried and tested.
Setup Fee : Zero for Startup Pro Plan, Rs. 30,000 for Privilege Plan
Annual Maintenance Fee: Rs, 1200
Transaction Fee: From 2% to 4%
Cashfree is a next-generation payment gateway that helps Indian businesses both collect and disburse payments via almost 100 payment methods including Visa, MasterCard, Rupay, UPI, IMPS, NEFT, PayTM & other wallets, Pay Later and various EMI options.
According to them, over 3000+ businesses have processed more than Rs 2500 Crores of payments using Cashfree offerings. Cashfree is backed by Silicon Valley investor Y Combinator and was incubated by Paypal.
They offer really unique features such as:
- Plug-n-Play international payments by connecting Paypal account
- PayTM account linking to offer PayTM was a wallet option
- Payout APIs to send money to any bank account, UPI ID, PayTM wallet instantly
- Collections by NEFT-IMPS
- Marketplace vendor settlement
- ‘Pay Later’ options like ePayLater, Lazypay, OLA Credit, and Cardless EMI options like Zestmoney and Flexmoney
We have integrated Cashfree with ProfitBooks so that our customers can send invoices with a payment link.
Setup Fee : Zero
Annual Maintenance Fee: Zero
Transaction Fee: From 1.95% to 2.95%, 2.5% for cardless EMI
Brief Review Of CashFree:
Our personal experience with CashFree has been really good. Their rates are low and technical support is very responsive. I like the fact that CashFree folks are continuously evolving the product.
Top clients of CashFree:
Dunzo, Wedmegood, Xiomi, Eventshigh, ClubFactory, HappyEasyGo, Milaap, Ketto
The payment gateway solution provider, PayU India, rebranded both its products PayU Enterprise and PayUmoney to establish them as clear independent businesses in May 2015. Now, PayUbiz focuses on enterprises and is used by large enterprises such as Snapdeal whereas PayUmoney is the consumer brand of PayU India and has a wallet solution for consumers and payment acceptance solution for SMB businesses.
PayU India is the flagship company of Naspers group which is a $25 Billion internet and media conglomerate listed on London and Johannesburg stock exchanges respectively. In India, they claim to serve more than 4000 merchants.
Setup Fee : For PayUBiz, plans starts from Rs. 4900 and go upto Rs. 29000. For PayUMoney, its Zero.
Annual Maintenance Fee: For PayUBiz, its Rs. 2400. For PayUMoney, its Zero.
Transaction Fee: For PayUBiz, its between 2.20% to 3.90% based on the plan. For PayUMoney, its 2%.
Brief Review Of PayUMoney:
We evaluated PayUMoney for accepting payments in ProfitBooks and were really happy with the overall experience. Signing up is very easy and you can upload the documents directly on their site for verification. We specifically liked the option to create ‘Pay with PayUmoney’ button. Its easy to create invoices and send payment links to your customers. We also found the support to be responsive.
As wallet service is integrated with the payment gateway, it adds extra value to the overall proposition. We are not using it now but would highly recommend this payment gateway for a startup.
Top clients of PayUMoney & PayUbiz:
Jabong, BookMyShow, Freecharge, Zomato, Goibibo, Olx, Ola, ShopClues, Pepperfry
EBS is owned by France-based Ingenico Group, which is a global leader in payment processing services. You will find mixed reviews for this payment gateway. Some of the ProfitBooks customers are happily using it since past 4-5 years but some reviews are really very negative. All we can say is that EBS has been around for a while and considered as a reliable payment gateway.
EBS has recently lowered their charges due to competition and can be opted by small and medium sized businesses.
Setup Fee : From Rs.4799 to Rs. 23999 based on the plan
Annual Maintenance Fee: Rs.2400
Transaction Fee: From 1.25% to 3.75% based on the plan
Brief Review Of EBS:
EBS offers multi-currency processing and has significantly lowered the onboarding time for new users. It offers a decent UI and a good amount of payment processing options. However, I feel that the features like ‘Auto Pay’ are a double-edged sword and some merchants may not like it.
Top clients of EBS:
BabyOye, Snapdeal, FirstCry
This one is our favourite. Started in 2012, Instamojo initially offered a way to collect payments for digital goods. But now thousands of users are using it to collect payments for ebooks, reports, tickets, tutorials, merchandise, invoices, services, and much more.
Instamojo is super easy to set up. They have recently introduced instant onboarding. Now, you don’t require any documentation to begin a trial account with Instamojo, simply answer a few questions and get started in minutes. For a full account, the bank statement and PAN card remain the only requirements. You can create a payment link or button, a page where you can list your products or services or directly request a payment.
Setup Fee : Zero
Annual Maintenance Fee: Zero
Transaction Fee: 2% + Rs.3
Brief Review Of Instamojo:
We use Instamojo as an alternate payment gateway for ProfitBooks and are extremely happy with it. Support is very responsive and helpful. They keep releasing new features every now and then. With frictionless onboarding, low transaction rate and intuitive user interface, I would strongly recommend Instamojo as the best payment gateway for small businesses.
Top clients of Instamojo:
Snapdeal’s app Shopo, Online Prasad, UrbanClap, YourStory, Next Big What and others.
We would also like to make a brief mention of CitrusPay here. We are using Citrus at ProfitBooks to collect online payments for past 3 years. Our personal experience with Citrus support has not been very good as we found it non-responsive. Apart from that, we did not face any issue with the payment gateway.
Top clients of Citrus Pay include ProfitBooks, Emirates, Etihad, Airtel, Meru, Zivame, Esselworld, Kaya, PVR Cinemas and Healthkart.
Citrus has been acquired by PayU in Sep 2016. It will be interesting to see how this merger shapes up and what it means to the existing customers.
Other Payment Gateways to consider
DirecPay is owned by Times Group,and has been around since past few years. It has not evolved with changing times and still offers limited payment options as compared to other payment gateways. It asks for a lot of unnecessary documents and still takes more than a week to activate. We found it tough to contact them when we required their assistance.
Razorpay is also a good option if you want to accept payments online. It comes with a lot of features. Recently, they have started supporting subscriptions and recurring payments in India.
EaseBuzz is recommended if you want to go live quickly. It processes your application within 24 hours.Help you get payments ASAP.
Atom payment gateway is the last one on this list. It started offering services in 2006 and claims to have 1500+ merchants onboard. They also offer point of sale (POS), IVR and wallet options.
HDFC Payment Gateway and ICICI Payment Gateway both HDFC bank’s and ICIC banks’s payment gateways respectively .Though backed by reputed banks, they are very expensive and difficult to set up as compared to the options mentioned above. These can be useful only when you have a very high volume of business transactions.
Top 3 Mobile Wallets in India
In 2015, we saw the rise of ‘payment wallets’. Suddenly, a lot of wallet services popped up and started offering huge discounts to acquire new customers. Some of these popular wallets also offer payment gateway services to the merchants. These wallets can be integrated as an add-on along with the above-mentioned payment gateways.
What started as a mobile & DTH recharge service is now a $4 billion company. You can start accepting payments from PayTM users using their Pay With PayTM service. You can integrate this payment gateway in your website. Unlike other traditional payment gateways, it will allow payments only from PayTM wallet.
This service is used by Uber, Bookmyshow, Domino’s Pizza, Food Panda and many big companies.
Similar to PayTM, merchants can accept money using MobiKwik wallet. As on 2015, there are over 25 million users that have MobiKwik account and 650+ merchants who are using its payment gateway service.
Its used by online portals like TicketGoose, YepMe, ShopClues and Snapdeal.
Oxigen Wallet is India’s first RBI approved non-bank wallet to be integrated with NPCI allowing instant money transfer from the Wallet to 60+ banks and vice versa using the Immediate Payment Service (IMPS).
Operating since 2004, Oxigen services already has over 1,30,000 retail touch points with over 40 million monthly transactions. You can use the Oxigen Checkout Services by registering as a merchant partner.
Collecting International payments
There are many companies in India – prominently tech startups that serve international clients. I would categorise these companies into 3 broad categories:
- Companies that raise one-time bill. For example, tech firms offering software development services.
- Companies raising recurring invoices. For example, tech startups working on SaaS model.
- Companies selling goods to international customers from e-commerce platform.
For collecting one-time payment, I would strongly suggest using Payoneer. It supports the largest number of currencies. We use it to collect payments from counties like Pakistan or Bangladesh where no other payment gateway works. Payoneer has some unique features and offers the lowest rates.
For recurring payments and e-commerce, Paypal is the best payment gateway. Their transaction fee is the highest but it’s the most reliable payment gateway to collect international payments. Being an international payment platform PayPal except for the majority of international cards, and the Good news is, Paypal has started supporting domestic transactions from India as well. I will soon be posting a review on that
Nowadays, Indian payment gateways also provide multi-currency options. But these come at a higher price and less reliability.
Payment Gateway + Billing Solution
What if the payment gateway is already integrated with your billing or invoicing software and you never have to worry about any setup hassles? This is what ProfitBooks billing software offers. Just upload a few documents from the application and you are all set. When you send invoices to your customers, they’ll see an option to pay using credit/debit card, netbanking and wallets.
The transaction fee is super low – 1.9% of transaction value or flat Rs. 99 – whichever is lower!
Know more about ProfitBooks and test drive it for free.
The whole payment gateway outlook in India is changing rapidly. Apart from traditional payment gateways, we now have options to accept money using mobile wallets. The government is also pushing for digital payments by launching UPI and Bharat QR.
The government of India is on a mission to empower small businesses and startups in India. In the coming years, we will see a rise in new payment gateways. Making domestic payments and International payments easy and quick. We will also see a rise in different modes of payments like bitcoin and NFTs in the coming years.
As per my experience, you should give importance to a number of payment options provides, ease of integration and most importantly support while choosing a payment gateway in India. we would also recommend using 2 payment gateways to make sure you never miss a payment from your customer.
I would like to hear your feedback in the comments section below.
Also read –
Best payment gateways for WordPress
How to sell online in India
10 Ways to fund your small business
Learn about new payment method – UPI
How to create professional invoices
Want To Systemize Billing? See How ProfitBooks Can Help