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Indian Payment Gateways – a big joke?

Thinking of using Indian Payment Gateways for your online service? Don’t go for them, they are a big joke. Here is info about some of the payment gateways.

CCAvenue: They are considered to be the best providers in India. (There is no competition in the market) They provide online order processing via Net Banking as well as by credit card. They charge Rs. 7500 as setup fees, 7% transaction fees for Credit Card Processing and 4% transaction fees for net banking. They also charge Rs. 1200 per year as Annual Software Maintenance Cost. (lol just another way to get yearly fees) They have other plan which costs Rs. 25,000 as setup fees, 5% transaction fees for Credit Card processing and 4% for net banking. The annual fees they charge is Rs. 2400 as Software Maintenance Cost.

But note that, it is not so easy to get account with them if you are running a web development firm. My personal experience was very bad with them. I felt as if I am begging for an account.

I applied for a basic account (Rs. 7500 one). Within 4-5 days I got email saying my account got rejected because I am running a web development firm and it is owned by a single person. This one was one of the worst excuse that anyone could give. But after requesting them couple of times, they approved only net banking facility on my account. I was left without credit card processing which was my primary concern for applying the account.

Few days back I decided to ask them again to activate the credit card processing. I sent them an email and talked to their person in legal department over the phone. They took more than a week to decide and finally today she told me that if I want credit card processing on my account I will have to deposit Rs. 30,000. And they repeated the same reason about having a single ownership web development firm. They also told me that, they are asking for this amount as security deposit for chargebacks.

So in short, they are giving silly reasons despite of me signing their legal documents which says they have right to sue me if I don’t pay them chargeback money.

I am currently using 2checkout.com, they are 10 times bigger than CCAvenue and they activated my account within 1 hour after the signup. The only problem I have with them is, payment delay. It takes approximately 20 days to get the payment.

But I think applying for CCAvenue is just waste of money if you are running a proprietorship web development / hosting firm.

Transecute: This is another payment gateway service from India. (I think it is service of Directi) But like CCAvenue, they are also useless. They charge Rs. 30,000 as setup fees and 5% transaction fees. But one good part is, they do not charge any annual fees.

ABCPayments: This service is by IndiaMart, InterMesh. Their rates are almost same compared to CCAvenue. Rs. 7,000 setup fees, Rs. 2,000 per year as annual rent and 7% transaction fees. The same plan is available for Rs. 10,000 one time and no yearly fees. The other plans are Rs. 10,000 and Rs, 16,000 with annual rent as Rs. 4,000 and Rs. 6,000, transaction fees %6 and %5 respectively. They also offer net banking but it is limited to few major banks only. As of October 2009, ABC Payment has shut down their service.

Payseal ICICI: They have not provided any rate related information on their site. As far as I know, they charge Rs. 25,000 as setup fees and 5% as transaction fees. (I have emailed them for exact rates) For integration with this payment gateway, you need Tomcat installed on your server. (Or any application which can run JSP pages)

PayGateIndia: The rates mentioned on their site range from 0 setup fees to Rs. 8,000 setup fees. Their economy package costs Rs. 0 as setup fees but 8% as transaction fees and Rs. 750 per year as annual cost. Their rates are very cheap compared to other payment gateway service providers but I am not sure about credibility of this payment gateway. They seem to be reseller of ICICI Payseal. (I have emailed ICICI to confirm their validity)

Eazy2Pay: Again, like ICICI, these guys too do not have rates mentioned on their site. But after exchanging few emails, I got the details. It starts with Rs. 10,000 setup fees and 5% transaction fees. Fees is one time fees and no annual charges. Their best plan is Rs. 25,000 setup fees and 3.5% transaction fees. They have few big companies in their client list. So it holds some credibility in its bag.

Update – June 30, 2007:

Cashwala or EBS - This one is by UTI Bank. Their pricing seems to be pretty high, Rs. 11,000 one time charge, 6% transaction rate and Rs. 6000 every year as Maintenance Charge. Check more plans here

But to cut everything in short, compared to international payment gateways these guys are way too costly. Currently only few players are in market so they are charging whatever they want but once Google comes into play (I think they are currently setting up Checkout service in India, it might take longer time too), their rates are going to reduce a lot.

Currently PayPal and 2checkout are good payment gateway providers and their transaction and setup fees are also very reasonable. But the only thing they lack is, time to deposit the funds in our accounts. It takes approximately 15-20 days.

Update: Rejoice!!!! Paypal has introduced direct funds transfer to your Indian Bank Account.. The best part is, they do not charge any fees for funds more than
Rs. 7,000 (otherwise it is Rs. 50). The whole process takes 5-7 days. Thanks Venkat for the heads up.

I hope Google Checkout starts in India soon.

331 Comments

  1. Santosh 08-Oct-2006 at 1:47 am

    I HAVE TAKEN EASY2PAY its from idbi bank

    happy with it…
    all set to start a big one..
    but gives good option for my father’s tyre export customers to pay via credit card from other countries..
    and it immidetly reflects the amount in my acocunt..
    cool one..

    rest all sucks..
    heard good positive inputs for transecute.
    me too waiting for google checkout and full fledged paypal services in india..

  3. Aseem N 08-Oct-2006 at 8:04 am

    Hey… I had spoken to CCAvenue guys through their online chat. They seem to support a very limited number of businesses. And Website development/hosting dsnt not figure out in their list. You need to have some product to seel they say. Well Paypal rox… even if it takes time for the money to reach your account, its still the cheapest way to go about.

  4. Thilak 08-Oct-2006 at 9:52 pm

    I’d rather use PayPal, but I haven’t tried 2checkout.

    PayPal is the best because its popular and lots of people use it

  5. Pingback: DesiPundit » Archives » Indian Payment Gateways - a big joke?

  6. Donthecat 09-Oct-2006 at 12:38 am

    Good post there, Deep. Something I been wanting to do for sometime now, but cudn’t find the time.

    My experience with CCA left much to be desired. ICICI support sucks. I generally propose Paypal or 2CO to my clients.

    I guess most of the Indian banks are stupid not to explore the online payment scenario in a IT savvy country like India. Lets hope the situation changes

  7. Deep 09-Oct-2006 at 10:39 am

    Yup, you are right. I still haven’t got any reply from ICICI till now and it makes them as par with my expectations (bank with poor customer support)

    In india, service providers take advantage of the situation. Earlier (and now also), mobile providers charging very high call rates, now ISPs charging high rates and now these Payment Gateway service providers…

    I really want google to start their service in India, so that these people will run behind the customers than making the customers run behind them.

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  11. CharhdiKalaa 10-Oct-2006 at 7:13 pm

    hey, thnx for the review.
    we r planning to open an online shop operating from india, aiming at NRI customers but are unable to decide our Credit Card Payment gateway, its so confusing. and can any1 suggest good shopping cart software or website?

  12. Deep 10-Oct-2006 at 10:28 pm

    Hi,
    If you are going to sell non-tech stuff online (main services or ebooks) then I think CCAvenue is good option. In international payment gateway, Paypal or 2checkout are the best.

    About shopping cart software, I would suggest CRELoaded (It is modified version of OSCommerce)

    Regards,
    Deep

  13. Pingback: Indian Payment Gateways Compared: Humdigg discussion

  14. Sai 21-Oct-2006 at 4:38 pm

    Good reviews on Indian payment gateway situation. Prepares new comers to the reality. I have read somewhere that if we need to use some of the global merchant accounts, we need to have a US savings account. Is that true? I am planning to start a portal in India where transactions will be only in INR. ANy idea as to how forex etc would work in this case?

    Thanks,
    Sai

  15. Deep 21-Oct-2006 at 4:48 pm

    Hi Sai,
    I have beem using 2checkout.com and paypal.com for over a year now, there is no need to open account in US Bank for these 2 payment gateways. They send you payment by DD, Cheque or Wire Transfer. They convert the amount to INR according to current conversion rate of that day.

    Regards,
    Deep

  16. JKAnand 29-Oct-2006 at 9:17 am

    Hi Friends,
    Planning to start a online store
    which can accept payments through credit cards
    and deliver products through mail.
    anyone can suggest whom to go for ccavenue
    oe bank gateways which is cheaper and reliable
    thanks
    JKAnand

  18. Vinayak 30-Oct-2006 at 5:06 pm

    HI,

    I wrote blog of similar nature in utter disappointment when I tried to find out about Indian payment gateways.

    http://www.itvidya.com/hold_back_information

    I tried to get information from ICICI owned payseal.
    After couple of email transactions I gave up.
    They are just too uncooperative.

    May be there are not many players in to the market.

    Major culprit is chargebacks. When user purchases anything using their creditcard, if they do not receive desired product, they can ask their money back, this money is taken back from seller.

    In UK, any business who applies for merchant account for credit card processing terminal or online payment gateway has to go through bank checks. This determines if seller can pay back if purchaser ask for refund.

    That is major problem in allocating payment gateway accounts. I believe they offer different rates to different people based on risk involved into industry. They typically cover risk against insurance. This risk insurance determines transaction fee.

    Vinayak

  19. Amod 08-Nov-2006 at 12:46 pm

    Hey Deep,

    Thanks for this post. It really sucks the way Indian so called service economy treats the customers.

    If there are enough supporters maybe we can start an online campaign for PayPal / Google services who will need to tie up with Indian Banks and / or Remit2India.

    Looking for comments on this.

    Thanks all.

  21. Mighty Guy 28-Nov-2006 at 6:05 pm

    Hello
    Thanks for the post . i was about to signup with ccavenue since ure now#13 to recommend 2co i decided to go with them :)

    Thanks

  22. Viraj 29-Nov-2006 at 12:49 pm

    We want to start an online store selling software products.

    I have seen lot of people recommending 2CO. I have also checked out shareit.com, they seem to be good too. I want to know if it is mandatory for the product to be priced in US$ if I use 2CO?

  23. Deep 29-Nov-2006 at 12:55 pm

    Actually, you can show the price of the products in INR and at the time of checkout, you will have to convert the same to USD and passon the value to 2CO as it does not accept payments in INR.

    And yes, your customer will be charged USD not INR. Better decision would be to show the price in USD.

    Regards,
    Deep

  24. Deepak 16-Dec-2006 at 4:56 pm

    Thanks for the great information. I am new to this and trying to get facility of online payment in multi currencies. Is there any gateway who accepts payment in INR without conversion. Preferably with low setup fee.

    Thanks again.

    Deepak

  26. Dipanjan 16-Jan-2007 at 3:05 pm

    Deep, I am starting an e-commerce venture and found your comparison on the payment gateways. Thank you so much for getting all in one place.

    I wanted to know how good is CC Ave for a product-selling e-commerce site?

    Appreciate your feedback on this.

    Cheers!
    Dip

  27. Deep 16-Jan-2007 at 3:18 pm

    Yes, it is good for ecom. sites. Problem is just with single owner web development companies. Do let me know if you need it at discounted rates. I can provide you at good rates :)

  28. Alekh 02-Feb-2007 at 9:55 pm

    Yeah, the payment situation seems hopeless in India. I was looking for a payment solution for my site http://www.buyselloldbooks.com/ so that sellers can accept payment for old used books on the site. I contacted Payseal ICICI over 3 weeks ago by email and still have not received a response from them!

  29. sam 04-Feb-2007 at 2:35 pm

    Hey Deep,
    This info and review are the most important thing for a beginner.

    Anyways, i need an info. One of my client want to charge registration processing fee to users all over the world. The users will pay via credit cards. I spoke with CC Ave and got the info that currently Master card is not working. If i go with 2CO will the users residing in different parts of the world be able to use all the major cards to pay online?

    Also, CC Ave provides live support and Net Banking. What about 2CO?. With the help of documentation will i be able to integrate their shopping cart?

    Pls sugguest me the best possible solution.

    Warm Regards,
    -saM

  33. Trishul 09-May-2007 at 10:58 am

    I happened to stumble upon their website while looking for an Indian Payment gateway. Their rates advertised seem to be lower than the others, not sure about their credibility though.

  34. Rohit 15-May-2007 at 8:31 pm

    We have tried to also connect with Tech Process which incidently is a ICICI Group Company probably also connected to Bill Junction.

    This is one of the wierdest services I have encountered. They seem to do a decent volume of transactions but they just suck at their service offering. The features they offer are very basic though they promise the sun and the moon before they sign up. The downtimes are often and long during which there is non-existant support. Feels like working with a government department at times

    Basically if someone wants an amatuer payment gateway then this is the one to go for. Else stay away.

    Rohit

  35. shoubhik 19-Jun-2007 at 2:57 pm

    Hey,

    I have a question and need assitance.
    If I use Paypal for my Indian website , then do I need to have a US bank account.

    Or
    Paypal will send check to me which I can deposit to my bank account.
    Any assistance will be greatly appriciated.

    regards,
    shou

  36. Deep 19-Jun-2007 at 10:07 pm

    You don’t need US bank account for that. They will send it to your indian address and you can deposit the DD here itself. Gets cleared in around 4-5 days.

  37. Manmeet Singh 26-Jun-2007 at 2:07 pm

    Hi Deep,

    Thanks for providing such a informative write up. How much time international payment gateways like paypal , 2 Checkout & others take to remitt the money. I have heard that it is very late & takes more than a months time & there is no notification from their side on payments. Are there any additional chargeback fees incase of 2 Check Out ? Please help me to arrive at a solution.
    Also let me know if I have to choose any Indian payment gateway, which is the most suitable one processing Visa & master cards

    regards
    Manmeet Singh

  38. Deep 29-Jun-2007 at 2:37 am

    Hi Manmeet,
    You get Paypal DD in around 15 – 20 days and it takes around 5 days to get cleared.

    2checkout has facility to directly transfer the funds to your bank account but the limit is USD 300. If you choose bank check, then the limit is USD 100 but the disadvantage is – it takes approx 20 – 25 days to just clear the cheque (They dont send DD) and around 10 – 15 days for arrival of the cheque.

    For Indian payment gateways, read the comments I have posted few threads back.

    Regards,
    Deep

  39. Ashish 30-Jun-2007 at 1:36 am

    Hello Deep,

    Really nice article and you have written the black hidden truth about the payment gateways of India.

    Google Checkout service is currently available only for US and UK. Any idea, when will be launched for India.

    Btw, If we accept credit cards payments through paypal (2.9% + $.30 Transaction charge) and for netbanking use CCavenue then what you say on that…?

    Or any other service for just support netbanking payments?

    Can you tell us before charging RS 7500.00 CCavenue explain all the things like what problem with your application or all netbanking will enable for you… or later after payment and howz the overall service?

  40. Deep 30-Jun-2007 at 3:37 am

    Ashish – Glad to hear that you liked the post. I have just updated the post with 2 more payment gateways. I have no idea about the google’s plan to launch checkout in India but they seem to be employing people for the same in Hyderabad.

    About your paypal and ccavenue combination – I am using it the same way. But as mentioned earlier,Paypal takes approx. 20 days to get the DD delivered…

    About any other providers with Net banking – I think ABCPayments offers that.

    About CCAvenue – Yes, they did tell me that they wont be able to enable credit card service on my account. About their service – they are pretty good and quick in taking care of the customers.

  41. Adi 06-Jul-2007 at 1:00 pm

    Hey Deep,

    Thanks for that super article on terrible payment gateway services.

    We partnered with CCAvenue first, then with Techprocess. Personally I think both their services suck like hell! The worst hit are my customers who try to make their payments through these payment gateways. Its one helluva frustrating ride for them. CCAvenue – it takes forever to authorize the transaction. Most of the time customers get frustrated and abort the whole process. Techprocess is much much faster that way, but wait! – the transactions never go through – Techprocess is almost always successful in bringing up an error page! Whoa! We drip blood to get customers to buy online in India, and then we suffer because of crap like this!

    So we decided to move out. Next POA – Upgrade. Sign up with a payment gateway so we accept payments directly on our site. Researched for three days – here’s the results. ICICI’s PaySeal, HDFC or Citibank offers this service. PaySeal.com has been down for the last three days – brilliant! Call up ICICI customer care, they dont even know such a company exists – beautiful! HDFC – Sent an email, no reply so far. Citibank – can’t find a contact! Any help in this regard will be welcome.

    Thanks to Deep and all the posts here – there seems to be hope – Ill just stick with good ol trusty PayPal. One question to you Deep, our products are priced in INR, do we have to convert to dollars before we send the value to PayPal? If yes, how do we do that? And has anyone lost money while converting back and forth from INR to Dollars (when sending the value to PayPal) and then back from Dollars to INR (while getting your DD from them)?

    Thanks.

  42. Deep 06-Jul-2007 at 1:11 pm

    Hi Adi,
    Sad to hear your story, give it a shot to EBS, it is a company of UTI guys, they are pretty costly compared to others but they claim that they are better than everyone. I talked to their reps and got some info. Just fill the form on their site, they should get back to you within 24 hours or so. But again, I have no idea how they are so the decision will be yours..

    About Paypal – yes, you will have to convert them back to USD before sending it to Paypal. You need to write a code which will convert the INR to USD and then send it to Paypal.

    Paypal will send payments in INR (they have USD option too).

    I hope this helps.

    Regards,
    Deep

  43. Adi 06-Jul-2007 at 1:35 pm

    Hey Deep,

    Thanks for the information. Ill check EBS out.

    Another PayPal Q for you. When the customer is taken to the PayPal website, they would see the total amount in dollars and then a request to pay by credit card or paypal account. Seeing the amount in Dollars can be intimidating to some. Is there any to work around this – request PayPal to display total amount in INR?

    Also, could you tell me an Indian site which uses Paypal, would like to use it and check the process out for myself.

    Thanks.

  44. Deep 06-Jul-2007 at 1:52 pm

    Hi,
    I don’t think so you can show amount in INR on Paypal, they can show in AUD, GBP, USD and couple of other currencies but not INR.

    About paypal account or credit card directly – they have 2 options, if a customer does not have account, they ask you to enter the credit card info or signup..

    Checkout paypal’s merchant tools or somehting, there might be some option to accept credit card information on your site itself but I am not sure about it..

    About Indian sites using Paypal, I am not sure about any…

  45. Mayank Behl 07-Jul-2007 at 11:16 am

    Hi Guys!

    As far I know, Abcpayments is the best payment gateway in india. I am using it for the last 3 years and i hardly remember any problem faced in using it.

    It has fantastic features like Multi Currency Support,Technical Support, No Hidden Charges, All Major Payment Modes, Online Merchant Interface, Highly Secure, Compatibility, Prompt Payments etc.

    So guys, Cheer up! There is a paymentgateway in India you can rely upon..

  47. Avinash 14-Jul-2007 at 7:11 pm

    Does anyone know when google checkout is gonna be launched? I’ve been searching for economical payment gateways for a month now… the best thing to do is to first become an affiliate or reseller for the payment gateway you want to use for your website(MERCHANT) and resell it to yourself this way your setup fee will be very low…If I were a reseller and a merchant with EBS then I’d have to pay Rs18000 setup +3.25% TDR… I think paysignet.com is the best among the worst…. there’s this new mobile payment gateway called paymate.co.in… no setup fee 3% on transaction value…
    Somebody I know is using the ICICI bank payment gateway and is being charged 1.9% TDR only + fixed deposit of Rs30000 which is a superb deal… I tried contacting payseal… their site is down… does anybody have anything new on payment gateways?

  48. Deep 15-Jul-2007 at 1:47 am

    Avinash – CCAvenue is smarter in this, they charge 10K to become their reseller and out of that you can buy one credit / account for 5K instead of 7500. So in short, they keep your 5K as their so called fees. (Indirectly ofcourse)

  49. Trishul Rai 15-Jul-2007 at 5:13 am

    Deep I think you should also update your article with fees associated with using foreign gateways like paypal that do not process the payment in INR. I have seen that most people when doing an analysis of the Indian gateways and foreign gateways, only look at the TDR, but do not take into account the “Foreign Currency Transaction Fee”.

    When you process the payment for your site in USD and your customer is using an International credit card (issued in India) he (i.e. the customer) is charged a foreign currency transaction fee (ranges from 3 – 3.5%). Take any credit card you have and take a look at the fee structure associated with that card and you will find this fee listed. The Indian banks don’t even show this as a separate charge on the customers statement, but very conveniently masks it within the dollar/rupee conversion rate. This means that when your customer buys item X from your site and pays say $100 for it through paypal, he actually gets charges $103.5
    So in totality being an Indian customer of paypal you also need to consider this fee in addition to the TDR.

  50. Deep 15-Jul-2007 at 12:02 pm

    Trishul – I think credit card guys add around Re. 1 – 2 extra on the dollar rate. For example:

    if your total amount is USD 100 i.e. Rs. 4,000 considering Rs. 40 as the rate, so credit card companies charge around Rs. 41 – 42 per dollar.. so you pay Rs. 4200 which makes USD 105

    And like you said, Yes, that is the disadvantage there and 2nd bad thing can be, the conversion rate these payment gateways use to transfer the money. It is again generally difference of 50 paise to Re. 1 per dollar.

    Actually there is lot of scope for Indian payment gateways here, they can do really well but they have to cut down their costs. High costs just does not make any sense to a small businessman.

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