Whirlwinding growth of eCommerce has not only changed the conventional ways of online payment, but has also succored the online payment industry in such a way that now it has become an integral part of our lives. No matter how big or small the payment is; every institution in the ecosystem has shown its dependency in the various modes of online payments.
As per a research report on Statista, the online payment industry's total transaction value is expected to show an annual growth rate of (CAGR 2016-2020) of 19.48% resulting in total amount of mUSD 66,300.0 in 2020.
Recently, Indian government and RBI jointly made an attempt to incline the economic model towards a more cashless economic structure, and it is surely a huge step to boost the e-payment business.
Of late, payment gateways have witnessed a meteoric growth, as not only e-retailers, but also brick and mortar retailers, vendors, banks, and customers have encouraged the concept of going cashless and paying online through various devices.
Undoubtedly, payment gateway has developed as the most trusted mode of payment, but, the question that arises is whether it is completely flawless?
Well, I don't think so. There are certain loopholes which can often create issues and make things really difficult. However, this can be curtailed by choosing an appropriate payment gateway, which can actually make things much more convenient for you and your customers.
Having said that the decision of selecting the right payment gateway is always a tricky one. Here are a five recommended tips that you must consider before narrowing down your search for an appropriate e-payment model:
Selecting 'The Best'
When it comes to choosing the perfect platform for online payments the first and the foremost thing is to find out a payment gateway that supports all modes of transactions, be it credit cards, debit cards, smart cards, electronic fund transfer via bank's website and/or any other mode of electronic payment. Every entity in the ecosystem has different requirements, and while nailing down a payment model, not considering this point could lead to functional issues.
Ease of transactions
Irrefutably, fast and hassle-free transactions are the most important attributes for any online payment gateway. However, there are many payment models that are very slow in operations, especially in terms of seeking permissions from the partner banks or merchants.
An important point to remember here is that the time taken by a payment gateway must be in correspondence to the timeline of the online business. Besides, it is also important to ensure that the payment gateway reduces risk of failures and losses, and facilitates ease of integration.
People normally misunderstand the concept of ‘cost of transaction’. Many people think that it is only about saving some money and enjoying some affordable services, and miss out on the more important aspects like reducing the risk of failures, automated balance update, optimal use of real time tools like query and call back system, faster turnaround on issues relating to transactions and much more.
While, selecting appropriate e-payment model, one should be cautious of the misleading platforms that offer exceptionally low charges or free services. Often such providers are either fake or provide unsatisfactory services, which aren't capable of offering what they claim.
Settlements and reconciliations
Today the customer and /or the institution are all hard pressed for time and so in context of real time settlements the channel has to be robust. Unsatisfactory and delayed settlements can create a room for bad customer experience. Interestingly, payments and services are two important factors which can make or break any partnership between the online service provider and the customer.
For faster transactions, end consumer usually opts for Immediate Payment Service (IMPS), express and turbo checkouts; in such cases it is necessary for the payment gateway to process the transaction accurately, saving the consumers time along with ensuring data security.
Compromising on safety could lead to disasters beyond control. And when it comes to monetary transactions, safety is paramount. Vital features pertinent to all payment gateways are - guaranteed authenticity, effective fraud prevention and detection tools, data security, multi-currency payment processing platforms among others. While all the features are important, fraud protection is the most important security feature that should not be missed. The absence of any of these features can lead to major fallouts.
The road ahead
India is emerging as a leader in payment systems with products like IMPS, UPI, e-KYC adding a new flavor to traditional businesses like insurance, lending etc.
The recently launched Unified Payment Interface (UPI) is expected to revolutionize the mobile payment space in India a significant way. UPI will allow users to make payments using their mobile phone as the primary device without the need to download an app to send or receive money.
In the coming years, I foresee direct debit products will take a huge leap and will have a large share of financial transactions market. The ecosystem that is being built by RBI for the payment industry and with Government’s vision of going cashless, we might experience better days and see newer trends & innovations soon.