written by | May 26, 2022

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What are the Payment Gateway Charges in India?

Accepting online payments is easier with payment gateway charges integrated into your website or app. It also helps with transaction management to keep operations running smoothly and provides rapid refunds and a real-time bank settlement service. As a result, you may think of payment gateway fees as the cost of delivering all of these services.

By connecting payment processors (the service that charges the card) and merchant account providers (the companies that supply merchant accounts), payment gateways enable merchants to accept credit card payments (the service providing your payment systems). Gateways are payment systems that process credit cards online through an e commerce site or in-person through a credit card terminal. They are normally given a fee and allow businesses to accept credit cards online or in person.

Did you know?

Cashfree Payment Gateway is the cheapest payment gateway in the country.

What is Payment Gateway Fee in India?

When consumers purchase goods or services online, they must use a credit card, debit card, PayPal account or another payment method. To accept these types of payments, the company selling the product or service must pay a fee for each transaction. This is where the payment gateway fee comes into play. It is usually calculated as a percentage of the transaction amount. It varies depending on the level of risk involved in the payment transaction and the payment method chosen by the customers.

The expense incurred by business owners to support online payment processing through the chosen payment gateway on their website or app is referred to as payment gateway charges in India. It is normally calculated as a percentage of the transaction value and varies depending on the type of payment method clients use and the transaction's level of risk.

Also Read: Guide to Payment Gateways and How They Secure E-Commerce Transactions

The Factors that Affect Payment Gateway Charges

Payment gateway charges assist service providers in covering various costs, including operational, software and payment security, in mentioning a few. The fees that various payment enablers demand are not arbitrary figures. Several variables influence them, including

the interchange rate and this rate is linked to the surge in credit card transactions in India. 

According to data, credit cards were used in over five lakh ATM transactions and 174 million POS transactions in December 2020. The exchange rate and the payment gateway charges meaning is that credit card firms like VISA and Mastercard charge the receiving bank for each credit card payment. This rate includes the issuing bank's transaction processing costs and efforts made to reduce the possibility of fake transactions.

The interchange rate is determined by the type of card used for transactions, the risk associated with the linked firm and the mode of payment used (online transaction or POS machine swipe).

The Fee for Merchant Account

Interlinking the credit card network with a merchant account is required to take credit card payments online. The account allows you to accept credit card payments online, with the money being deposited into your bank account at regular intervals by the merchant account provider.

Payment Security

Payment gateway fees can vary depending on how customers use their cards to make purchases, such as in-store, online, or over-the-phone transactions, each of which carries a different level of risk.

For example, collecting payments in your offline business using a card swipe machine is less risky than accepting payments online, which are extremely sensitive to cyber-attacks.

Components of Payment Gateway Charges

The interchange rate, which is the amount that credit card issuers like Visa and Mastercard charge the receiving bank for each credit card payment, determines the payment gateway fees. In addition to the interchange rate, merchant account providers impose payment security fees and merchant account fees, which vary based on the business type and gross volume of transactions. All of these elements go into the numerous components of payment gateway fees.

Setup Fees for Payment Gateways

A payment gateway setup fee is a one-time transaction fee assessed at the payment gateway connection. This fee is typically charged when a merchant account is established.

Charges for Annual Maintenance

The annual maintenance charge is a recurring fee paid to the payment gateway provider each year to cover operating expenses and maintain software, security and payment technology. This might also be a monthly charge.

Discount Rate for Transactions

The Transaction Discount Rate (TDR) or Merchant Discount Rate (MDR) is the price that the payment gateway charges for the processing transaction fees to their bank account. It is usually a predetermined percentage charge like 2% tax per transaction based on the customer's payment mode. The payment gateway may charge a higher cost for overseas transactions.

Integration Charges

The amount we pay to the payment gateway fees to integrate the payment gateway into a website or app is known as the integration charge. Various payment gateways charge different fees.

Why Should You Consider Payment Gateway Charges?

Payment gateway fees are determined by several factors, including the type of transactions performed, transaction frequency, market type and overall income made by a company.

You may make an informed comparison by knowing the payment gateways charged by various service providers. Consider additional considerations such as the number of payment sources, modes supported, payment security, success rate and other perks while keeping these fees in mind. Keep in mind that these fees should not be the main factor in using a payment gateway.

What are the Paytm Payment Gateway Charges for Your Business?

If you only know Paytm as a tool to make online payments, it's time to broaden your understanding. You can also collect payments from your customers online via a website or mobile application using the Paytm payment gateway.

When you consider the overall picture of online sales and profits, the payment gateway fees paid to a service provider are few. Integrating the most appropriate payment gateway will provide you with fascinating benefits.

The Paytm payment gateway has several functions, including

  • Simple integration.
  • Programmer-friendly APIs.
  • Compliant with PCI-DSS.
  • A high success rate supported by over 250 million saved cards.
  • Refunds are available immediately.
  • It is simple to accept international payments.

Also Read: What are the Different Digital Payment Methods?

The Paytm payment gateway with the lowest charges for small/medium businesses are detailed below:

Instrument Type

MDR

UPI – Standard

0%

UPI payment gateway charges – Subscription

Rs. 5 per mandate

Credit Cards

 

 

1.99%

, Rupay – 0%

Debit Cards

Mastercard and VISA – 0.4% for transaction amount below 2000; 0.9% for an amount greater than 2,000.

Paytm Wallet

 

 

1.99%

Net Banking

 

 

1.99%

Payment Gateway

2.8%

Begin by reviewing the features of available payment gateways and then matching them to your company's requirements. Before making a final decision, consider all aspects of the payment gateway selection.

Conclusion

For their website or mobile app, payment gateway fees are the costs that merchants must bear to accept online payments through their selected payment gateway. For the most part, it's calculated as a percentage of the total purchase price. It is subject to change based on the customer payment method, transaction value and degree of transactional risk.

Accepting online payments is easier by integrating a payment gateway into your website or app. It helps with transaction management by providing rapid refunds and real-time bank settlements to keep things running smoothly. As a result, you may think of the fees for payment gateways as the cost of providing these additional services.
Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: Which payment gateway has the lowest payment gateway charges?

Ans:

Cashfree is becoming increasingly popular because it is the most affordable payment gateway in India compared to the other payment gateways. This payment gateway provides a quick payment service and a return option that is available immediately. The company was founded in 2015, and it already has more than 15,000 customers who use its services.

Q: Is there a payment gateway charge that merchants must pay?

Ans:

The fee is often levied to the merchant who uses the payment processing services provided by the payment processing company. According to a recent study, payment gateway charges, meaning and processing fees are typically established by credit card networks and vary from one service provider to another depending on which credit card that network is linked.

Q: Is there a payment gateway fee for using UPI to make a transaction?

Ans:

Currently, UPI payments in India are completely free, and there are no additional fees associated with making a UPI payment. You can transfer ₹1 or ₹1,000, or any amount in between. However, published news items suggest that some banks may begin UPI payment gateway charges transactions soon.

Q: Is Cashfree a good payment processor?

Ans:

Cashfree is regarded as one of the most reliable payment gateways. You can use it on your website, portal and apps, and it is recommended.

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The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.