Problems using Payment Gateways in India               Home         Payment gateways in India

Kindly note that this content was written several years ago, and may not be relevant in 2020 onwards. This information is archived for reference. If most of  your customers are outside India , making payment through credit card, having a payment gateway is worth the expense and effort. If your target market is India, most customers are unfamiliar with the internet (the usage of  internet in India is among the lowest in the world) . A better option would be to open an account in a private bank like ICICI bank , which allow deposit of cash or cheque anywhere in India. These banks will charge a fee for using their anywhere banking facility.

The payment gateways in India have very high setup fees compared to international payment gateways as volumes in India are low. The setup fees for CCAvenues for Indian merchants are more than 4 times what they charge foreign customers.  Also the payment information should be passed from the website of  merchant /seller of product  or service to module of the payment gateway processor accurately. Our experience is that  there are  few reliable hosting companies in India. If your hosting is not reliable , you will not be able to accept payment from customers despite spending so much on the payment gateway. Also many of the payment gateways are subject to attacks from internet hackers.

In January 2006, there was a report in the print edition of  Times of India, Mumbai about how a fraudster had misused the payment of gateway of CCAvenues. ( Unfortunately could not find the link on the Indiatimes website) . A  hotel booking website was opened. The credit card of  NRIs was charged for services never used in February 2005. When a bank (issuing the credit card)  approached  the payment gateway, CCAvenues, they realised that the sub merchant registered with them had disappeared. Customers lost about Rs 15 lakh and Avenues India had to compensate them.  The fraudster again tried to replicate his success by  approaching CCAvenues for opening a new account for his new website. While verifying the credentials of the new customer, they realised that this persons profile matched the scammer. CCAvenues approached the police, who arrested  him

A payment gateway with lower setup fees - TransactIndia also existed, but many users have complained about their service

They apparently collect money from your customers and do not  make the payment to your account  as  agreed . Also some times the payment gateways servers are down. Read more

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