Here’s what you need to know about Payment Gateways!


E-commerce is on a spurt. We all, frequently, purchase things on the internet. But have you ever wondered how does a website communicates with a bank? How the bank transfers money to the website? How is the security of the transaction ensured? Here’s where a Payment Gateway comes into picture.

A Payment Gateway is nothing but an online substitute for the ‘Credit Card Processing’ facilities that we find in a physical store. So, apparently it is necessary an online store to accurately process all the transactions. A payment gateway acts as a link between the website and the bank. It may appear seamless to the customers, but it is very important for their transaction security. PayPal, 2Checkout, Google and Amazon Payments are a few well known Payment Gateways in the world.

How does it work?


When you order something on the internet, the encrypted details of your credit card are sent to a Payment Gateway. The information is offloaded instantly. Thus, the risk of a hacker exploiting the information is reduced. Now, The Website’s bank will receive the information from the payment gateway and communicate with the card companies (Visa, MasterCard, etc…). The card company will, eventually, complete all behind-the-scene checks and pass an approval to the payment gateway.

Advantages of a Payment Gateway

  • It is quicker than cheques or a physical credit card system.
  • It is much safer than other mediums such as manual credit card processing.
  • The customer doesn’t have to open a third-party website such as PayPal.

Choosing the best Payment Gateway

Several factors that must be considered while choosing a Payment Gateway-

  • Gateway FeeCompare the fees of various gateways before you choose the right one. Some Gateways, like PayPal, may seem right for small transactions but not for large transactions.
  • FeaturesAccording to your needs, choose the gateway which provides the best features such as Multiple user account and recurring transactions.
  • Integration & SupportIt is important to compare the integration and support systems of various gateways. Also, make sure the Payment Gateway that you choose is recognized by your bank.

Payment Gateways in India:

Here’s a comparative table of all major Gateway’s operating in India-

Payment Gateway Fee(INR) Credit card Fee (%) Debit Card Fee (%) Net Banking Fee (%) Annual Fee(INR)
CC Avenue 0-40,000 5.00-2.50 4.0-2.50 4.00-2.50 1,200-3,600
HSBC Bank 50,000 2.75 2.75 NA 2,500
Axis Bank 6,000 6 6 6 2,400
HDFC Bank 50,000 3.50-6 3.50-6 12,000
ICICI Bank 30,000 3.00-4.00 3.00-4.00 NIL
TechProcess 30,000 2.5 2.5 2.5 5,000
Atom 20,000 2.25 0.75-1.00 2 5,000
DirectPay 10,000 6.5 6.5 6 2,400
PayU 6,000-36,000 4.90-2.75 1.25 4.90-2.75 1,200-3,600
EBS 12,000-36,000 5.00-3.25 5.00-3.25 5.00-3.25 3,600


An online store which is in its initial stage must keep the cost low. It should choose a payment gateway which offers a free SSL certificate  and doesn’t require feeding own components in the server. An already established online store, with a clear sales target, should opt for a Gateway that enables the store to use its own Merchant Account and SSL certificate. A gateway that provides all security measures and advanced integration methods, should be the apparent choice.