It all begin when a friend asked me about the possibility of setting up a ecom site for his traditional business.Since it involved both B2B and B2C segments, one of the areas of interest was online payment ie) user purchasing a commodity in his site and paying via credit card/debit card/NetBanking online. Though i have used this facility as a consumer almost on a daily basis , i wasn't aware of the underlying business model and hence decided to explore it. As usual, armed with Google, digged through the net and following is the overall summary
( Initial Setup Cost +Yearly Charges + Transaction Charges)
|CC Avenues||7,500, 1200, 7% / 40,000,3600 , 3%||Industry Leader.Most widely used . No 1 Player|
|ebs.in ( Axis Bank )||30,000,2400,3.25%||No 2 Player|
|ipayin.com||NIL,2500 + 3.99% / 25000,4500,2.99%||Integration into webpage seems to be easy. Not sure of quality of service|
|HDFC||Info not in public domain|
|ICICI Payseal||Info not in public domain||Seems they dont care about startups & smaller companies|
|PayPal||NIL,NIL,3.4% + .3USD||Cannot Receive payment in INR. Many international currencies supported. Apt for US faced ecom sites.Can take delivery in INR in Indian Bank Account|
Few points to note
- Irrespective of using CreditCard , DebitCard or NetBanking transaction overhead seems to be same.
- At least 3% transaction charges
- This point intrigues me a lot. When i pay Rs200 for a book in flipkart someone is getting Rs6 . Hmm I guess this is very high for waffer thin margin business like retail. I can understand if the underlying mechanism is credit card ,then the charges imposed by card issuing agency ( MasterCard , Visa,Amex ) will also be added to PG's cost of service.But if NetBanking is used and amount is immediatly debited from consumers bank account , what's the need for extra charges. Is banks imposing charges similar to card issuing agencies ?
- At a point when Govt wants to push cash less transactions for the purpose of transparency and eradicating black money ,this ( high charges ) is definitely a road blocker in this direction.
- Cost of service seems to be uniform even in matured market like US . Paypal asking prince is above 3% . But quality of service seems to be better there.
- Mostly merchants are not happy with current model of business
- Domain is so large that there is ample scope for more players
RBI should come up with a common platform , inline with NEFT, atleast for NetBanking ,where money transfers from consumers to merchants with least overhead and that could be easily tracked , monitored and audited.
If anyone reading has first hand feedback on any of the service provider please leave it in the comment section ,so that benefits everyone.