Gone are the days of brick and mortar shops. It’s the time where everyone prefers sitting at the comfort of their home and ordering needle to a car online. It’s the age of e-commerce so understanding and having a trusted Payment Gateway system for your business is a must to support your business online.
Let’s have a close look at a Payment Gateway and how it works.
What is a Payment Gateway?
When you walk into a store, you fill up your cart, the cashier takes cash at the billing counter, places it in the cash register and you can walk away with your goods.
A payment gateway does the same but, online. A channel between the customer, the merchant & the bank.
How does a Payment Gateway work?
Let’s take at look at different steps involved when you are making an online payment using your credit/debit card.
The process begins when you order a product from a payment gateway enabled website or mobile app of the merchant.
- Customer selects the products, adds them to cart, proceeds for payment and enters the credit/debit card details on merchant website
- Merchant’s website securely encrypts the card and other payment related information and sends it to the Payment Gateway
- Payment Gateway sends this information to acquiring bank processor or Payment Processor. Acquiring bank is a bank or financial institution that processes payments on behalf of a merchant.
- Payment Processor forwards these card details to the card network. For eg: Paytm Payments Bank Rupay Debit Card transaction will be forwarded to Rupay in this step
- Card network clears the payment and requests authorization from the issuing bank or customer’s bank. For eg: Paytm Payments Bank Rupay Debit Card transaction will be forwarded to Paytm Payments Bank in this step
- Issuing bank approves or declines the transaction and passes the transaction results back to card network. For a successful transaction, the customer is charged and the amount is transferred to acquiring the bank.
- Card Network sends this information back to the Payment Processor
- Payment Processor sends authorization results back to the Payment Gateway
- Payment Gateway sends this information to the merchant application and based on the successful response, merchant fulfills the order.
- At the end of the day, a process called Settling takes place and the Payment Gateway sends all amount to the merchant’s bank account.
Do you need a Payment Gateway?
Let’s run you through some facts:
“The number of Digital Transactions grew from 79.6 Cr in 2016 to 244.8 Cr in 2018, a three-fold increase”
“The total value of these transactions grew 88% from 2016 @ INR 108.7 Lakh Cr to INR 204.8 Lakh Cr in 2018” (information source)
“India has seen the greatest Penetration of Smartphone YoY growth more than any other country i.e 16%” (information source)
Do these facts move you to set up an online presence for your business? Get in touch with us now!
How to set up a Payment Gateway?
Setting up a Payment Gateway can be as easy and as tedious depending on your scale and line of business.
A simple list of steps that On-boarding of any Payment Gateway would include are:
- Signing up, Free Demo
- Selection of Plans
- Document Submission
- The Risk teams at the Payment Gateway will vet and verify your documents
- In a span of 2 days – 2 weeks, a business should have fully-functional Payment System up and running
Business with Paytm: The Paytm Payment Gateway
Paytm offers a number of products when it comes to payments. Right from basic payment products that seamlessly integrate into your website and app, Paytm also has specific products developed to address diverse use-cases that businesses have.
To name a few, Payment Links, Subscription Payments, QR Codes for offline payments and many more. You may go through each in detail on the website.
Considering each business has scales and volume of payments, Paytm offers various plans that match your scale and volume of payments. For instance, a small business can accept up to ₹50,000 for free, yes, free.
Each customer is different and so are their payment preferences. Paytm Payment Gateway enables you to accept payments from every possible payment instrument, including DC, CC, Net-banking, UPI and Wallet.
To get started, you will have to sign up on the platform and follow the steps here to ensure a smooth on-boarding.
You can also access additional information by raising a query on our help section.
Happy Payments to you!