Challenges of Online Payment Systems and Their Solutions

Common Challenges in Online Payments

One of the first things for a business to solve when going online is to ensure a safe and secure online payment system. While good products pull customers to a website, good experiences retain them. A seamless checkout and payment system is a crucial part of that customer experience.

Thankfully, with technological advancements, there are multiple methods of payment that have made online transactions simpler. But technology is a double-edged sword, and brings along its share of challenges.

According to a recent survey conducted on digital payments across India, the majority of respondents stated that their transactions failed while using digital payment methods.

E-commerce entails a set of complex steps while completing a transaction and even a minor glitch can terminate the task. Considering there are multiple payment options such as UPI, bank transfer, debit/credit card payments, mobile wallets, and so on, businesses and consumers expect online payments to be quick and efficient.

However, there are several challenges of online payment that affect the success of a transaction as explored further in this article.

5 challenges of online payment systems with solutions

All of these are major operational challenges of online payment that affect the merchant and buyer alike. Here’s a look at some of the most commonly occurring problems faced by businesses and their customers along with ways to resolve them.

1. Low internet bandwidth

A solvable yet common issue, low internet bandwidth is usually responsible for failed online payments. No matter how advanced your virtual presence is, low internet bandwidth can be a critical concern especially if you use an integrated payment gateway.

The payment process can be interrupted due to non-responsive servers. In many cases, it results in the deduction of payment from the customer’s bank but does not reach the merchant – a situation that results in further hassles for the customer as well as the business.

How to overcome low internet bandwidth issues

Ensure that your website, mobile app, and the payment gateway that you have chosen can work seamlessly even with slow internet. It is always better to have a lite version of the site or app to ensure the connection continues uninterrupted.

Paytm Payment Gateway comes with intelligent routing, direct bank integrations, saved cards, and saved UPI IDs that makes the payment process superquick with minimum distractions and page loads. Owing to these features the transactions are a breeze even in the case of limited bandwidth.

2. Card data security

Online frauds including ID thefts, database exploits, phishing attacks, and card payment-related scams are common in India, and the number has only increased during the pandemic. Hence while being cautious of the data, it is also essential for e-commerce merchants to use a secure payment system that assures the least possibility of any data leak.

Consumers in India experienced a fairly high online fraud encounter rate of 69% in the past year, according to the Microsoft 2021 Global Tech Support Scam Research report. 31% Indians lost money through a scam-the highest globally.

How to overcome card data security issues

The best way to ensure card data security is by using a payment gateway that is Payment Card Industry Data Security Standard (PCI DSS) compliant. PCI includes a set of regulations that all payment gateways have to follow while handling card payments.

It encrypts the data and changes it into a series of random characters and numbers before it reaches your server. This means that you won’t be handling any payment information yourself. The encrypted data is commonly known as a token, and it is valid for a short period, making it difficult to crack.

Paytm Payment Gateway is PCI DSS Level 1 compliant and hence chosen by several small and medium sized businesses in the country. Getting PCI compliance on your payment system is expensive, instead an integrated system like Paytm Payment Gateway can be a wise and affordable choice. The compliance benefits can also be utilised when you use Paytm Payment Gateway on  e-commerce hosted platforms such as Woocommerce, Shopify and Zoho.

3. Technical integration

When it comes to transacting online, a payment gateway integrated store helps in securely processing the online payment from your website to your bank. But, a hassle-free integration of the payment gateway can be a daunting task. The process may need support and assistance. 

There are several steps as well as aspects of the payment system that you have to account for while making it a part of your website or app. Some of the points to consider are if it can be easily integrated without specific knowledge on programming and whether the system fits within your business infrastructure.

How to ensure a smooth payment gateway technical integration

Choose a payment gateway that is backed by robust and reliable support to resolve any issues that you might crop up during integration. Merchants also need to take into consideration the flexibility of the product so that they can seamlessly unify it with the platform they use.

It is equally essential to check on the support and assistance with the service provider when deciding on the payment gateway. Paytm Payment Gateway has a dedicated team of experts that offer assistance to business owners for smooth integration of the payment gateway with their app and website. The team helps you in deploying a well-performing payment gateway along with all the fine-tuning required for its usability.

4. Multi-currency transactions

Thanks to social media and other channels, it is now possible even for smaller businesses to reach a global audience. Sellers can cater to international clients without being worried about the success of those transactions.

However, when we compare domestic transactions with international ones, the latter can be slow and expensive. One of the reasons being the several features that the integrated payment gateway needs to cover including banking norms, currency exchange, and security.

How to smoothly process multi-currency transactions

Partner with a trusted payment gateway that supports international transactions. There are several advanced payment gateway options available for your website and app that can reduce the time taken to complete a transaction and ensure improved security.

Paytm Payment Gateway, for instance, is suitable for businesses with a global customer base, since it allows merchants to accept payments in almost all currencies in the international market. You do not need a separate API integration to accept payments. Additionally you can also enable real-time currency conversions with a single click and be assured of instant settlements.

5. User experience and checkout challenges

Cart abandonment is a huge challenge for businesses and one of the main reasons for this is a long and tedious payment process during the final stages. Integrating a good payment gateway can help carry out the transaction successfully, but the ease and speed of doing it are also equally important. Complex steps, multiple details, and pages taking time to load can distract the user and eventually entail huge losses for the merchant.

How to overcome user experience issues

Ensure that the payment gateway you go ahead with offers a comprehensive user experience. The logos and steps should be clear and assist the user in placing the order faster. For merchants, a secure payment gateway with a seamless user experience translates into higher sales and repeat customers.

One of the Paytm Payment Gateway’s key features is the JS Checkout that offers a simple and quick checkout experience without any redirections for the buyer. Paytm Payment Gateway also lets you customise the checkout page to maintain a consistent brand theme for a seamless shopping experience.


Many businesses have been able to maintain a steady growth curve with the help of digital technology, but many others are just starting to explore its potential. As technology continues to advance and determine the success of every online business, merchants need to be equally aware of the products available that can turnaround their businesses.

As far as the challenges of online payments are concerned, a robust payment gateway can potentially minimise most of the issues and significantly improve the customer experience. Paytm Payment Gateway is being trusted by hundreds of merchants to solve their payment challenges and maximise the success rate of transactions.




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