[Guest article by Santosh Panda, Founder of Ayojak. This post is based on Santosh and his team’s experience with few Payment gateways in India. The post is written in the spirit of expecting better services from payment gateway and is not about any specific payment gateway. The problems mentioned here might be experienced by many ‘e-commerce Merchants’ in India.]
Abbreviations: PG – Payment Gateway
Payment gateway is backbone to India’s e-commerce but if you are a startup and observe the current situation (which is improving steadily), you will hear inner voice ‘what the heck why no body is doing something about it’. This inner and expressed voice you will see in almost all blogs in India. But then life goes on, each startup has a problem to solve.
Let me explain how & why I think Payment gateway solution providers are pushing Startups in India to few years backward!
1. Time to Market
If you are developing an e-commerce app and want to release it in few week’s time, it is impossible that you will get payment gateway approved.They take lot longer. They don’t have a ‘sandbox’ environment where you can at least experiment your payment process and solution and fast forward your time to market.
When we first asked for a payment gateway solution during June 2008, one of India’s top solution providers didn’t respond for several weeks. We had few customer waiting to use our service but we were waiting for PG solution to respond to our query.
Hopefully PG providers will respond to market need and move things faster. We are talking about online payment not trunk call as it used be in 70?s.
2. Usability
Usability for me is simple as Jakob Nielsen’s following paragraph.
Jakob Nielsen defines usability : Usability is a quality attribute that assesses how easy user interfaces are to use.
Usability is defined by five quality components:
Learnability: How easy is it for users to accomplish basic tasks the first time they encounter the design?
Efficiency: Once users have learned the design, how quickly can they perform tasks?
Memorability: When users return to the design after a period of not using it, how easily can they reestablish proficiency?
Errors: How many errors do users make, how severe are these errors, and how easily can they recover from the errors?
Satisfaction: How pleasant is it to use the design?
Let me share some of bad usability I have encountered
2.1. Payment gateway only shows ‘bank names for credit card’ but doesn’t show ‘bank names with VISA credit card or Bank Names with Mastercard credit card’, so a user proceeds all the way to payment page and while entering ‘card number’, they realise that it only allows 16 digit!! Little they have idea that this payment gateway is only supporting VISA !! User will be pretty mad about it and first reaction is ‘why this ‘e-commerce portal’ didn’t inform me’.
2.2. All payment gateways have a set of steps to go through for a user’s payment processing. Most of of them doesn’t show a simple flow diagram image on their payment landing page or ‘how it works’ link. User has absolutely no idea where he is being led to. Note : Payment gateway takes ~70% of transaction fees and they do a sloppy job.
2.3. Payment gateway asks same question several times!! Take ‘Billing info’ for instance, when payment gateway provider can ask user to submit their billing info on their payment page than why do Payment gateway insist ‘e-commerce portal’ to collect on their web page.
2.4. Payment gateway never inform user on their payment page about unavailability of a bank due to maintenance. They let user proceed to payment and transaction is bound to fail.
Note : Some payment gateways have informed maintenance information just 1 hour before the scheduled maintenance!! Ok, but why can’t their solution make it automated? Simply show a message on payment page, so buyer is informed and doesn’t do a transaction for that bank!
3. Customer Relationship Management
A basic CRM solution/process from Payment gateway will help ‘e-commerce portals’ in a big way to manage their customers. For instance,
3.1. Every transaction request that reaches to a payment gateway page should be tracked and saved. Merchants invest heavily to win every customer, hence having every customer (who attempted to buy services and dropped off) info will build towards successful relationship management. Lot of analytics depends on this.
3.2. If there is a transaction that gets failed due to ‘payment gateway and Bank’ , such transaction should be communicated to Merchant in real-time. NOTE – currently all the payment gateway that we have come across miss this point.
3.3. They could provide an API at least to pull this real time transaction and customer info and allow e-commerce merchant to integrate with their backend CRM. Or basic ‘transaction feed’ will enable ‘e-commerce portal’ to do the backend CRM job.
There are several such scenario where ‘e-commerce merchant’ lives at the mercy of payment gateway.
4. Cost of Support
Due to poor integration between the ‘Payment Gateway’ and ‘Bank’, several support requests get generated to the ‘e-commerce portal’. For the ‘e-commerce portal’, these payment failed/issues are uncalled support, they have better things to do such as their service & product support. The cost of support due to bad payment gateway increases as volume of transaction increases!!
5. Payment Gateway helping your Competitor
Your ‘e-commerce portal’ Startup might be first to market, innovative and steadily building up but watch out : your payment gateway partner may be helping your competitor to win your customers!! Because customer had bad experience with your payment gateway partner, so customer will jump the ship i.e. to your competitor.
This is based on our experience and learning. As they say ‘when you are young if few mistakes happens, quickly learn from it’. After learning from these mistakes, we did take few strong actions like having own better CRM solutions for payment handling, support tickets are getting managed by apps like www.zendesk.com , real-time updates getting generated for each transaction request that goes via our ‘e-commerce portal’ and thanks to our payment gateway partner: at Ayojak, we have 99.99% transactions successfully handled,.
Related Question: Who is held responsible in case of a fraud transaction on a site?
I will not fully agree with the author. The ‘ccavenue’ process was a bit long, but once done the integration was hassle-free. Have you tried using ccavenue?
Vivek,
Its just not about one payment gateway or another one or few successful transactions.
Basic point is they have low value added service, for example read the paragraph on ‘Customer relationship management’ .. also as a ‘e-commerce solution provider’, you will need far deep integration or data from them, which is rare in any PG provider.
Happy to hear your thoughts.
This is a great post. I’m looking forward to see such posts about real issues being faced by entrepreneurs in the trenches.
Hi Santosh
Great post, cudnt agree with u more that there is a need for a new age payments product in India. Can u clarify the last line “and thanks to our payment gateway partner: at Ayojak, we have 99.99% transactions successfully handled” ? Do you mean you are able to handle 99.99% transactions or do you mean 99.99% of all attempts on your site result in successful payment transactions? If the latter is true, that seems quite amazing. Would want to know your gateway
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Hi Upasana,
The full team would have taken a month GOA break had this ’99.99% of all attempts on your site result in successful payment transactions’ been reality with our India PG providers 
.. We use EBS and TPSL, we have tried few other one also.
I mean ‘able to handle 99.99% transactions’
What is TPSL? Do EBS & TPSL cover all types of payments? How was your experience with CCAvenue? Does it make sense to go for a Bank PG for a lower TDR?
Hi Santosh,
Thank you for a very insightful article. The state of payment gateways in India is such a major hindrance to Ecommerce. Still waiting to see a Paypal like in India (Don’t even think of ‘PaisaPay’).
Now can you tell me a lil more about the various PGs you have encountered. We are in the process of applying (Already talking with CCavenue who absurdly won’t clear your proposal till the is launch, which means more delay).
What and Why TPSL? How does EBS compare to CC Avenue (No mastercard On EBS).
Regards,
Shaishav
I do not know much about this business, however as a consumer my biggest gripe with PGs and e-commerce site is that when I do a transaction, their transaction remark (or invoice) in my bank statements is so generic and always same that if a month later I want to know (or categorize) these transactions, I would not be able to differentiate between any 2 transactions. For example, if I make 2 transaction from different sites who are using same PG (say ccavenue), both transactions will show ccavenue. Not sure if this limitation is from PG to bank relationship or what, but find it very annoying.
I might need to disagree with few points:
1. Nowadays time to bring it live is 3 days for internet banking and 2 weeks for Visa and 20 days to 30 days for Master card.
2. They provide you sandbox with test mode and you can test it though and integrate, I don’t think so 5 hours would be more than sufficient to test all possible test cases and code integration for a guy who have already integrated dozen of payment gateways.
3. 2.3 I know EBS and they do have a way to pass the billing info on to their page.
4. Every request are been traced by the crm portal of payment gateway where it goes under failed / cancelled transactions
Vivekananthan,
Good points but here is my take. As I have mentioned, this post is written in spirit of expecting far far better services
2. I am talking about approval process, sandbox having support to different programming languages and environment. Example : do they have a quick code written in Python?
For example to write a Paypal, Amazon Payments,you need few mins to access their sandbox to test your code. Why should a PG provider not have a fantastic API & sandbox to do the same?
3. I am talking about duplicating that Billing info. Why not ask user to submit on their payment page rather than asking ‘e-commerce’ site to collect and pass?
4. is that available via feed, API? No
Hence when your solution aims to have 100,000′s of transaction, you need 3 person to continue to monitor that panel!
Why not pass the info to merchants via API/Feed, so they can automate and/or take instant actions in case any transaction failed/customer had difficulties.
Happy to hear your thoughts.
@Santhosh,
2. Accessing to sand box – It won’t happen in India becoz of varied pricing model, These guys feel that only clients needs to access the sand box or test mode. They feel it would help them to manage their system. More over Only people in India do accept payments in INR and not people in US or any other country. So they need to have a presence in India. But this is not the same with Paypal or Amazon payments. Paypal doesn’t even support INR still.
- Reg. Billing info duplication: I recently came across a client who already had their ecommerce setup when trying to look at their system the address field is just 255 varchar and they missed their billing or shipping address, they went on to the payment portal and found out and correct it. See I prefer collecting it in our end and passing across is the most robust way so you don’t miss any data on the way (from / to) payment gateway
-Available via Feed: Did you talked to any of the providers and requested for? I guess they might be interested in providing you that. But not sure about it…
I might agree that these systems needs more perfection from the current state but I would certainly say that they have came from worst to good and not still great. See in days like 2005 where you have lot of process in getting approval for a payment gateway, I still remember days where I met HDFC & ICICI Branch managers to get info and get things done, with hectic prices which I am sure a startup cannot afford. But when you compare those days with now its far better enough.
You need to accept the fact that you are still living in India. You cannot do everything without a time delay and compromise on quality. I accept that there is a great market for a new entrant or even an old entrant who can just listen to the past customers of existing payment gateways.
Vivekananthan,
Thanks for sharing thoughts, agree things are improving, but I am doubtful how far this existing players will go to introduce path-breaking solutions.
We all hope they do, or somebody else make inroad.
Santosh
Hi @Vivekananthan,
first very interesting insights through the comments.
You suggested taht you would fast track the EBS process (3 days net banking) i wondered if you could still offer your help? We are planning to launch a clothing store and the site is ready. Would appreciate your help
Thanks
Excellent post Santosh! Very well written. Another example of bad UI which we encountered: forcing users to fill both a land-line and a mobile number as part of address! Isn’t it downright absurd? But you have to live with it.
@Vivekananthan My personal experience with 2 separate PG provider has been of 3 months on average. Integration took few hours worth of coding and couple of days of testing but paper work and formalities eat up a lot of time. Of course, second time, we were aware and started the process well in advance.
@Abhaya
May I know who are your PG providers. I know EBS takes lot of paper work, bank statements etc., but there is also a way even with EBS were you get it immediate (3 days to activate Netbanking) just connect with me on my mail. I would get things done for you within a short period of time.
Thanks for the offer but we are already setup and running with EBS. I am just relating my experience, not my current status
Also the point is not what can be done if you know somebody. Point is how long will it take for a new user to get started who has no idea about the back door. When we started 2 years ago, setting up Paypal took 5 hours – which means, I decided in the morning to check out Paypal and by afternoon I was accepting payments. I wait for the day this can be done with an Indian PG.
@Abhaya
Great.
Even I look forward for these days like you decide in morning choose PG provider and get things done in the evening. Yeah that’s valid point
It’s not a back door on what I mention on getting things done, It’s just a Supplier & Vendor Relationship.
I did even asked couple of PG providers on why they just operate as Paypal but their answers are just one and the same – Process in getting banks approve our application (Documents) and if something happens who would be held liable? Say you can have adult site with paypal as payment processor and it cannot be in India due to policies. So the cure would be asking with the banks why do you have system like this. I don’t know much about these long policies….
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the most common problem we face with is when transaction fails due to banks/PG’s mistake. In such cases the amount is debited from user’s account but never credited to us.
User frustratingly emails us and loses trust on us. Banks sometimes take 30 days to credit this amount back to user.
Also, the payment gateways collect user information but never use it. We are still to figure what they hell do some PG’s ask for user’s address, etc.
I share the same thoughts friend. I can’t comprehend why they want the user’s PIN when even as a service provider I am not interested in it. I have used EBS and Techprocess (which I think again runs on EBS) and have had an OKAY experience so far.
Hi,
Well I don’t know the indian scenario completely, but I think What your problem is. From my experience there are mostly two types of payments.
1. Authorize–ship–Capture
2. Sale ( where Authorize and Capture) happens at the same time.
in our case as we have to Register something for the user, we follow the first case. We authorize the user’s CC, give them stuffs and then Capture the amount. Problem comes in when there is a timeout on during that call. You don’t know the final status. The payment gateways normally have the option to specify the capture delay thing . You can turn this off or set it to auto capture. I like things to happen under my control. SO we have the auto capture off and in case there is a timeout, we put the order in a cron, which later goes and cancels the payment requests. The payment gateways normally auto cancel the authorization in 30 days if you don’t act on them. I think you might be hitting the case and need to handle those on your end.
As for the billing info … come on you should know about AVS. Its part of the risk management system.
Dear Prasanth
Good to c somebody commenting abt TechProcess!!!
TechProcess is altogether is a different company. I will provide more info in next comment.
Regards
Amit Kr Gupta
TechProcess Solutions Ltd
Can you please include some more information? For example chargebacks fees etc? Some are listed in this page: http://www.creditcardpaymentgateways.in/learn/79-merchant-account-fees-of-payment-gateways-explained.html
Also can you please list all payment gateway company names in Indi?