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Archive for the month “May, 2014”

Which is the best payment gateway in India?

Answer by Ruturaj Vaidya:

Mostly i've came across CCAvenue n which is secure and supports to most of Bank's. also read this where you can find others details too!

Comparison of payment gateways in India
If you are an Indian startup and you have an e-commerce component

 to your application, you will need to review, evaluate and shortlist a
payment gateway that can handle online payments via credit and debit
cards.  And most likely this will not be an easy or fast process.  In
its current form, there are just a handful of payment gateway service
providers in India. Access to information related to a few them is
non-existent on the web.
I’m hoping that this post will help folks to do an easy and quick comparison between the various service providers.

Before we move on to the comparison, let’s consider some of the criteria that are important while evaluating a payment gateway:

1) Cost:

All payment gateways have an intial setup cost and then charge a
small percentage of the transaction. Few have an annual maintainence
cost (AMC) as well. The initial setup cost is a one time charge only and
 is mostly non-refundable. The annual maintainence cost is an annually
recurring charge. The transaction cost (TDR)  is charge per transaction
and is generally anywhere between 4-7% of the transaction amount. The
higher the volume, the more you can negotiate the transaction cost.
2) Support:

How helpful and responsive is the service provider when you run into a problem ? Do they provide off hours support ?

3) Chargeback policy and disputes:
What is the policy for chargebacks and refunds ? What is the policy for disputes ?

4) Ease of Integration:
Does the service provider provide an easy way to integrate the

gateway into your app ? Do they provide alternate means for integration
if tomorrow your architecture changes for some reason ?

Beyond these basic criteria, you’ll also need to consider additional

factors (depending on your requirements) like – what credit cards /
banks are supported by the payment gateway ? Do they provide mobile
banking option ? What is their rate of successful transactions etc ?
One often raised point is why not use PayPal as your payment gateway ?

 After all, they provide a great API for integration, there are plenty
of code samples already available and their rates are quite competitive.
Well, the reason why PayPal may not suit everyone’s requirements is

because they do not provide you the option to charge customers in Indian
 Rupees. If using one of the PayPal supported currencies meets the
requirements of your app, great. If not, you’ll need to consider using a
 payment gateway that will allow payments in Indian Rupees.
So, here’s a comparison of the major Indian online payment gateways (had to publish as a PDF since the spreadsheet wont fit on the blog).  The list includes a comparison of CCAvenue, DirecPay (operated by TimesMoney group), EBS (collaboration with Axis bank), ABC Payments (operated by IndiaMart), HDFC, ICICI Payseal and Transecute.

The troublesome part of it was trying to locate the correct pricing
plans for the various payment gateways, especially for DirecPay, HDFC
and ICICI. DirecPay, HDFC and ICICI for whatever stupid reason choose
not to list their pricing plans on their websites. You need to contact
them via email or snail mail (ICICI) with your business details and only
 then, based on the nature of your business, transaction volume etc. do
they send you a pricing plan. Sheer incovenience — I mean, so much
ground work to simply get info on their pricing plans ? Its been 3-4
days since I emailed DirecPay and HDFC for details about their plans and
 am yet to hear back from them.  I fail to see why they dont provide a
simple price info on their website rather than to go through this
archaic process.
The comparison document is by no means complete just due to the sheer

 difficulty in locating correct information on the web. I’m keeping this
 document ‘live’ – in the sense that if you have any input / update
suggestions to add any additional payment gateway to the list or to
update info related to any of the ones already listed in the document,
please send them in to me and I will continue updating the document.
So which payment gateway should an Indian startup use ?

To begin with, you should obviously analyse the various payment
gateways on some of the criteria that I listed above. On top of that, if
 you need to review data related to the success rate, average time to
refund etc. for some of these gateways, I would suggest reviewing the
statistics revealed by IRCTC
 – India’s biggest e-commerce site. They release monthly data related to
 transactions and payments, which includes how much each payment gateway
 contributed in terms of number of transactions, the amount contributed
by each as well as the number of days to refund etc. For instance, only
53% of the transactions using the HDFC gateway completed successfully
while ICICI gateway handled 17% of all the transactions that were done
on the IRCTC website. The data also provides great insight into what are
 some of the main banks / debit cards being used by customers. For
instance, 8.10% of all net banking transactions were attempted by ICICI
customers while only 0.32% of all transactions were done by Bank of
India customers.
Based on my research, if I were to use an Indian payment gateway

today, I would personally go with either CCAvenue or EBS – for the
simple reason that they make it very easy to get the needed information,
 have good online documentation and support wide range of credit/debit
cards. In case of the other providers, its like a black hole – you try
to seek out information and become a customer — and they try to make it
that much harder to access that information.
If you have used / worked with and Indian payment gateway, I’d like

to know how your experience has been ? If you were to recommend one to
others, which one would it be ?

Source- http://www.startupdunia.com/india-startups/comparison-of-payment-gateways-in-india-2087

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Which is the best payment gateway in India?

Answer by Ravi Krishna:

Though for a startup it might be a good idea to go with a single provider like CCAvenue/EBS as you grow its important to build redundancy. Hence one should integrate with at least two payment gateways.

Another thing to note is that aggregators like CCAvenue/EBS are just an intermediary between banks/credit card processor and the merchants. Removing this intermediary will improve payment success rate and reduce commission charged. So as you grow its important to integrate directly with credit card gateways like Axis bank/HDFC/Citi/ICICI. You will be surprised with success rate improvements.

After credit cards you largest chunk of traffic will be SBI debit cards and Netbanking (~80 million cards in circulation). For SBI debit cards billdesk and CCAvenue are the two options which still offer ATM Pin based authentication which has much higher success rate than 3D secure authentication.       
For net banking CCAvenue/EBS and Techprocess are the available options.

You will also need to invest on fraud monitoring systems to reduce your liability. Your payment gateway can provide some help here. It will also be useful to explore some third party solutions here.

And finally payments is all about extra half percent from the system (note that this extra half percent directly goes to your bottom line). So you should set up 24/7 monitoring and take immediate action in case of issues.

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What is the future in nfc payment processing?

Answer by Jonathan Matus:

The introduction of iBeacon in iOS7, with it's hundreds of millions of compatible iOS devices, and the refusal of Apple to support NFC has sealed the fate of NFC. Low Energy Bluetooth is widely available and growing. .

View Answer on Quora

How does Apple do payments so well?

Answer by Brian Roemmele:

Apple + Payments

This was actually a rather long journey for Apple.  To craft the magical experience that you and I now see at the iTuens store was not close to being trivial. To gain a perspective, as always one should, we will present the historic perspective.  This will help establish how Apple got to be into Payments and perhaps where it is going.

Warning: Jump to the last paragraph if you are a TL;DR person, as I am sure what follows will be horrifying.

Steve vs. The Record Labels

Throughout most of 2002, Steve Jobs and his team were crafting what we now know as iTunes.  Steve was in many cases personally negotiating with the major record labels on how the service will actually help the music industry.  The price per song he established primarily from a psychological standpoint.  At first most of the record labels did not accept a fixed price, let alone one that was not set by them.  The price point of 99¢ for a “hit” single was frightening to the industry. Clearly they wanted more, much more.

Steve vs. The Payment Card Companies

This was not the only issue Steve faced.  This issue always seems to be missed by most writers and researchers of Apple's iTunes success.  The price point of 99¢ was not aligned with the Interchange Rates (http://en.wikipedia.org/wiki/Interchange_fee) established by Visa and MasterCard.  Steve logically assumed that there had to be a price structure to support micro transactions and if there was not, he would will it in to existence.  I was on a team of outside advisors that had to break the news to Steve about how Visa and MasterCard set rates and how, at that time they did not cut any side deals. 

There were some negotiations with both Payment Card companies but they really did not go anyplace.  Thus our group suggested the Payment Card Aggregation method for billing that is still in use today.  This is based on a dynamic computer model of buying habits of a typical user and tries to take transactions over an unpublished maximum amount of time, reaching a prescribed dollar amount to group multiple purchases into a single Payment Card transaction.  Thereby reducing the effective rate to a more agreeable amount.   This is precisely why your light purchase days at iTunes may take up to a day or so to produce an email receipt.

Wholesale Payment Costs vs. Low Ticket Transactions

Today, there are many rates that could apply to an iTunes transaction.  In fact, at this point it is very likely that Apple has negotiated rate reductions.  However to give some insight on how costs could work out I will present some basics.  I will select 2 rates that closely match what costs Apple experiences.  I will use the EIRF wholesale Interchange rates and will be assuming a US based Visa Debit Card (1) or Visa Credit Card (2) (http://usa.visa.com/merchants/operations/interchange_rates.html) page 3 and 4:

1) Visa: Debit Electronic Interchange Reimbursement Fee (EIRF) (Exempt): 1.80% + 20¢

99¢ x 1.80% + 20¢ = 22¢ + (2¢ Visa dues and assessments) = 24¢ (Wholesale cost to Visa).

The final cost (Including processing fees of about 2¢) to process a 99¢ transaction it is about 26¢ (26%)

One Song at 99¢ – 26¢ (Processing cost)  = 73¢ – ~69¢ (To Record Label)  = ~4¢ Apple revenue


2) Visa: Credit Electronic Interchange Reimbursement Fee (EIRF): 2.40% + 10¢

99¢ x 2.40% + 10¢ = 12¢ + (2¢ Visa dues and assessments) = 14¢ (Wholesale cost to Visa).

The final cost (Including processing fees of about 2¢) to process a 99¢ transaction it is about 16¢ (16%)

One Song at 99¢ – 16¢ (Processing cost)  = 83¢ – ~69¢ (To Record Label)  = ~14¢ Apple revenue

Breakdown of a typical 99¢ transaction using a Visa Credit Card.

Thus Apple's true Interchange costs are perhaps between the very high cost of accepting Debit Cards and the lower costs from Credit Cards.  To help Apple out, don't use your debit card!

By no means is this the only rate that could apply in theory to Apple, there are many (For example: Business Card Not Present  2.45% + $0.15).  In a perfect world, to meet full Visa CPS Interchange, a card not present transaction requires a number of points, one of them is full CVV2 verification and with some Cards there are other points that must be reached.   Apple can not store the Payment Card CVV2 code and to request this number at every whimsical purchase would render the iTunes store useless.  I will have to assume that Visa requires Apple to meet the same security standards that all other merchants are required too meet.  Under current PCI (Payment Card Industry) DSS (Data Security Standards), transaction originating from Payment Cards can not store the CVV2 codes (http://en.wikipedia.org/wiki/Card_security_code), thus we can verify this in  “PCI Data Security Standard (PCI DSS)”, Page 30:

“3.2.2 Do not store the card verification code or value (three-digit or four-digit number printed on the front or back of a payment card) used to verify card-not- present transactions.”

Transaction Aggregation

As mentioned these are approximate costs but very close to the center of true costs Apple experiences.  This means that Apple is paying between ~16% – ~26% of transactions to the Payment Card Companies for a 99¢ transaction.  There are currently only two ways to mitigate this high rate:

  • Payment Transaction Aggregation
  • iTunes Gift Cards

The iTunes gift card has had explosive growth. Saving by Apple is achieved by creating perhaps a single transaction of perhaps $20 rather then 20 transactions of 99¢.  Moreover, if the iTunes Gift Card is purchased at a non-Apple location, Apple does not pay any Payment Card fees.  Payment Transaction Aggregation is in a similar vein, as mentioned above.  By grouping perhaps a $20 charge and aggregating transactions together over a few hours or a few days and then presenting this sale as a single transaction to the Payment Card companies, Apple lowers its effective rate, from the double digits to the low single digits.  This is Payment Transaction Aggregation in action and has saved Apple from potential losses in the iTunes store to the profits that are now famous.  Even more over, it did finally satisfy Steve Jobs.  This point is very important as we would not be speaking about an iTunes store if this problem was not solved.  I think it was a rather simple and elegant solution when you factor in all of the issues we faced.  In the future Apple could become closer to a PayPal model (using checking accounts), but this seems less likely.

One-Click Ordering

It must be clearly stated and recognized that the Apple iTunes experience is also partly an Amazon experience.  Patent number 5960411 (http://worldwide.espacenet.com/publicationDetails/biblio?CC=US&NR=5960411&KC=&FT=E&locale=en_EP) is one very powerful patent.   Back in the pre web 1.0 days, a young Jeff Bezos thought about the processes and procedures of an Internet transaction.  Jeff (his name is on the patent with others at Amazon) finally committed his ideas to a patent application in the mid 1990s and was later granted the famous one-click (http://en.wikipedia.org/wiki/1-Click) buying patent.  In the late 1990s Jeff was challenged with how to protect the intellectual property and took what was at the time a rather hard line on products that copied the concept.  This prompted negotiations with Apple and a number of other companies.  Apple was granted a license for one-click in early 2000.  We see the implementation of this license at iTunes and the Apple website.

Quality Ingredients

Thus we have established that Apple has innovated the way they handle transactions and also the way they process orders.  These are the primary ingredients, but there is more.  Apple spent a great deal of time with working with consumer anthropologists and merchant anthropologists both internally and externally to fully research every aspect of the transaction experience.  Apple is in a never ending study of how to optimize the entire experience.  After a Billion+ transactions all of us have come to relish this outstanding experience.  So much so that many are looking to Apple to become a Payment Company.

Virtual vs. Non Virtual Goods And The Apple Experience

Apple currently only collects payments for non-virtual, hard goods when they themselves are selling these goods.  Apple does not currently allow for third party companies to sell hard goods using iTunes accounts.   This seems to be missed by a great many people, even payment industry experts.  Why is this so?  The primary reason is that Apple can control every aspect of the buying and selling experience with the delivery of virtual goods.  This can never be the case for non-virtual goods.  Thus there is a very large possibility that the experience can become very un Apple-Like.  

Apple guards its user experience more than any company in the industry and this presents a rather large problem.  Amazon and to some extent eBay/PayPal had to go to extraordinary lengths to achieve “no questions asked” return policies.  Anything less would create a re-tweet firestorm today.  However on the opposite side of “no questions asked” return policies are 1000s of small merchants that very well could be innocent and be driven out of business.  It is a precious balance and Amazon is doing a rather good job.

For Apple to expand beyond Collecting Payment for virtual goods, they would have to create a customer service department and chargeback unit larger then the top 3 Payment Card issuing banks combined, perhaps needing to add over 10,000 people working in customer service at Apple for Payments alone.  I can personally state that Steve Jobs had absolutely no desire to be in that side of business.  I am fairly certain that under the new guidance at Apple this will not change.  However with Steve gone, I can't be absolutely sure.

Apple + NFC

On the other hand, I am 100% certain that Apple will become a facilitator of transactions for Payment Card Companies.  This means that Apple acts just as a conduit between the customer and the merchant on behalf of the Payment Card companies.  This takes Apple out of the liability loop entirely.  Apple Merchant accounts would not be used for this type of relationship.   There are two primary ways this can happen (there are others but I can not speak of them at this point), either by linking Payment Card(s) to an iTunes account and using this ID as a token to pay Merchants or to implement NFC on iOS devices and to associate Payment Cards in a “wallet” type setting.  In addition perhaps in conjunction to NFC I am rather certain we will also see this in the future, Brian Roemmele's answer to Siri (Commerce): Will Siri become a transaction completion system?

The Father Of The Starbucks Wallet

It is clear to me that Apple will move to the NFC option first and perhaps never implement an iTunes connection.  I draw these conclusions from a number of public sources (I am not using any private information or violating any non disclosures).  There is absolutely no doubt that Apple is committed to NFC technology.  Certainly not just for Payments but for other interesting new use cases. 

I spoke to this in a number of posts on Quora over the last year, some assumed I was insane (perhaps).  In this post I point out not only that the inventor of the NFC protocol, NXP one of Apple's significant chip provider for a currently unreleased device, Apple also has significant patents covering a spectrum of use cases with NFC: Brian Roemmele's answer to iPhone 4s: Why does the iPhone 4S lack NFC support?.  In 2010 Apple also hired one of the most creative “wallet” designers in the world, Benjamin Vigier.   This guy is a powerhouse with that designed the Paypal Mobile, Sprint MyMoneyManager, Mobile Wallet application for 2 top#5 US carriers, mFoundry Mobile Banking WAP platform, NFC Wallet for a top 3 US bank and led SanDisk mobile commerce and NFC activities.  However his grand achievement is the spectacular Starbucks Wallet: Online Payment Gateways and Processing: What retailer is the most successful in mobile payments?.  Starbucks is the most successful company in mobile payments at over $42 million in transactions thus far in 2012.

We will no doubt see how Apple implements these ideas in 2012-2013 and how well these new service compare to the wonderful iTunes experience.

How Does Apple Do So Well In Payments?

Apple does not operate in a vacuum, the success it has in Payments is directly tied to the success it has had with the iPod, the iTunes Store, iPhone and iPad.  We would not be speaking about Apple and the payments experience they create if they did not do so well in these products.  This point is also lost on many people in the Payments industry that hope to aspire to Apple’s unique and successful processes.  Thus to sum up why Apple is successful in a simple calculation:

iTunes + Payment Card Aggregation + One-Click + Spectacularly Successful Products Sold + Incredible Customer Experience = Apple’s Payment success.

View Answer on Quora

What is the best API for payment processing?

Answer by Dean Young:

While it is difficult to say what is definitively “the best” API, I can shine some light on what WePay does differently. What we’re really talking about here is differentiation. It could be pricing, API docs, or fraud. I’m going to focus on fraud, since pricing is commoditized and API docs come down to personal preference.

But first, to provide some background, if you have a marketplace or platform, you usually create a website where buyers and sellers can find each other to exchange goods or services. There are many examples of these kinds of websites, such as airbnb (listers and renters), TaskRabbit (hirers and rabbits), Lyft (drivers and riders), Kickstarter (makers and contributors), etc. etc. The marketplace is the ecosystem where both parties meet.

In this case, you indicated that you want to install “chain payments” (PayPal’s term), or what we like to call an “app fee”. An App Fee is where a buyer makes a payment to a seller, but a small fee is taken out of (or in addition to) the payment in exchange for using the marketplace/platform. This is essentially what payment processors do to take their own fees.

An important consideration in choosing a payments API vendor for your marketplace is how much risk you are willing to assume. The daunting thing about integrating payments is that you have to deal with both buyer and seller fraud.

Using a fictitious crowdfunding platform (JumpStarter) as an example, they have to do a lot of work upfront to ensure that their “makers” are as legitimate as possible. However, can they ever really know? Will the makers put a project out there, charge a bunch of credit cards, and then not deliver? Sure, that’s against the whole spirit of the community, but it happens! If someone raises $40,000 and doesn’t deliver, then everyone charges back through their credit card companies, JumpStarter is now liable for $40,000. Now multiply that by however many of those accounts are fraudulent sellers, and JumpStarter could be dealing with a whole lotta hurt.

That’s just the seller side. What if a bunch of buyers start charging back for movies, art projects, etc. that they are unhappy with, but they received the goods or services for already? Again, JumpStarter is liable for those chargebacks. That’s not even accounting for fraud rings, money laundering, and other compliance issues.

Risk is a legitimate concern, and something that WePay actively assists marketplaces and platforms with all the time. We create accounts for the end merchants on your marketplace, so you are never liable for chargebacks, fraud, or compliance. You should be focusing on perfecting your product, not the payments.

View Answer on Quora

How does Apple do payments so well?

I'm an iPhone app developer, and I'm astounded by how easy Apple makes it to collect payments from customers around the world. I have thousands of customers in countries I've barely even heard of.

I also publish apps on the Android Market. Google's offering is garbage compared to Apple's. Paid applications are only available in 32 countries, versus 90 for the App Store.

I believe this is one of the main reasons people expect Apple to enter the mobile payment space (e.g. http://techcrunch.com/2010/11/01/apple-mobile-payments/ ), and it's one of the reasons for Apple's current success (160 million active credit card accounts!).

Relative to its competitors, Apple's payment solution is many generations ahead. How did they do it?

Why can't anyone else even come close?

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What is the best API for payment processing?

Answer by Robert Oswald:

As Dean Young mentioned, "the best" is hard to quantify without knowing exactly what you folks are needing.  I'd invite you to consider Braintree and join merchants like Airbnb, Uber, Fab, The Economist, Bonobos and others in using our full featured, but easy to implement payment solution.

Some of the benefits of Braintree include:

  • Easy to integrate API
  • 2 day funding.  Get paid fast.
  • White glove service and support
  • Mobile first strategy to future-proof your business
  • Extensive fraud tools provided for free
  • Create a one click checkout experience with our Vault or with Venmo Touch
  • Products specifically built for Marketplace business models
  • Extensive international options

We're easy enough to reach by emailing sales@braintreepayments.com.

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