How to Start Your Own Payment Gateway in India

At the start of the year 2022-2023 Indian businesses are always high in their caliber Despite the bumpy years of the pandemic which may again knock on the doors of the country, the merchants here have the potential to survive But it will not be an exaggeration to mention that payment gateways have a big role in supporting commercial entities. Whether it is about in-store payments or online payments, payment gateways are always important It is the reason that many want to open a payment gateway service-providing company because it is a profitable sector.

If you want to start your own payment gateway, there are several requirements that you need to complete.

First, understand what is a payment gateway

Before you start your company as a payment gateway service provider, it is best to first understand its concept and functions

A payment gateway is an electronically managed channel that transfers the financial or credit card information of the customers to the merchant banks for transaction approval.

What does a payment gateway provide?

Along with data transfer, there are many other services that a payment gateway has to add to its services because without that it cannot get approved during registration.

·Tokenization or encryption system to encode customer financial data

Fraud protection system

· Speedy and seamless payment gateway integration

Disputes and arbitration

24x7 customer support

Recurring payment system

Virtual terminal

· How to set up a payment gateway

How to set up a payment gateway

How to set up a payment gateway in India?

Now comes the actual formalities that are mentioned below Read them and understand them carefully and then you will be able to know how to start your own payment gateway business.

· Partner with banks – To accept and process payments, a payment gateway needs to transfer credit card data and for that, it needs to have partnered with banks. Master Card, Visa, etc. are the major credit card options that a payment gateway should have and thus partnership with banks is vital

· Partner with processors – Of course, you need to contact the processors because a payment gateway transfers the credit card details but it is processed by the processing companies. So, you need to sign agreements with the best processors in your industry and geographical area.

· Develop a sales department – Your sales team will call the customers for processing and will take care of the promotion part. Besides, the existing customers act as a

promotion tool because your word-of-mouth publicity through them is beneficial for your business.

· Employ technical support – Technical support is the most important thing in a payment gateway because it is managed electronically and needs to be sound in technology You need to have a technical team to receive the complaints of the merchant clients and troubleshoot the problems

· Register your company – Yes, this is the most important step to finally come into shape as a business and get a payment gateway license in India You need a minimum of two directors to register your company. Through registration, you will get the license

Company registered under the companies act 2013

Minimum 5 years of the business plan is required

You need to have at least two directors to register

Apply to RBI under section 5 (1) of the PSSAct

RBI will check your application for credentials

RBI verifies for certain conditions such as –

üThrough which medium the payment system will transfer the information

ü Financial status of the management and also the integrity of the company

üTerms and conditions of the relationship between the payment provider and the customer. Etc…

You need the following to get the license in India

Procedure to get a license to open a payment gateway in India

Service tax registration number

Issuance of the authorization will happen to commence the payment gateway business

Compliance with payment card industry data security standard

Get code testing reports and system flow from the software certifying agency.

Processing of the application

Suggestion – Your business plan plays an important role in getting the license approved.

Address proof of your business Note – The complete procedure may take 6 months

The above requirements apply to a conventional payment gateway as well as a white-label payment gateway solution. Both work for the same purpose, the only difference is the latter one gives a platform to show its logo on the payment pages

How to create anAPI for your payment gateway

Every payment gateway works with the support of API which is an Application Programming Interface It needs some technical skills and requirements to create an API for a payment gateway Let’s delve into the technicalities of how things work when you develop a payment systemAPI.

What is a payment gatewayAPI?

A payment gateway API is an Application Programming Interface that allows the merchants to manage their payments whether they are online or happen through POS It helps to optimize payments for the merchants as well as the buyers Its prime role is to facilitate speedy and secure payments.

Security comes first in API development – While creating the API you need to take clarity from your payment gateway in many aspects. Find out what level of PCI-DSS your business relates to in case of using a particular API Ask the payment gateway provider how it ensures the security of the complete payment system Also, get enlightened about the developer

procedure of the payment gateway It is better if the payment gateway has an in-built fraud protection system and also understands how the payment gateway secures your interface.

A modern design is a must – API is a technology to manage things electronically and thus it keeps updating on every aspect according to the change in the market conditions and trends. The latest design is among the prime needs to create a perfect API RESTful is normally considered the most famous design for web-based services This design shows that a payment gateway uses the latest designs and also it is easier for the developer to integrate.

Efficient functionality – For effective management of customer transactions the API should be efficient in its functionality and should serve specific requirements. Once the payment processing starts, it is not possible to repeatedly solve the technical issues Effective functionality is even more important in the case of a White Label payment gateway like gatewayeast.com because it allows the merchants to use the gateway to place its brand logo. The more issues customers will face during the transactions more they will hate the logo of a business, which will thoroughly affect the brand indemnity in the market.

Easy to use for the developers – The technical and developer team of a merchant should be able to use the Application Programming Interface easily It is not possible to call your payment gateway customer support every time to call for troubleshooting assistance. By the time a matter gets solved, millions of transactions may get affected in case of any technical issue No merchant will ever want to lose customers

Tips for optimizing your payment gateway

What is payment gateway optimization? Payment gateway optimization which is also known as payment optimization is a system to identify the chances of authorization rates, reduce fraud and reduce false declines. In simple words, it keeps the payment system healthy and free from all issues that may adversely affect the payment system

Ways to optimize your payment gateway

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Now that you are clear on what is payment optimization, it is time to read the ways used to optimize payment gateway. Read below –

Use dynamic routing

Dynamic routing allows diverting the transactions between various payment service providers and also to the varied merchant accounts where a transaction is most likely to get approved However, the routing system considers multiple factors before it diverts a particular transaction to a payment processor. It chooses the path with the most cost-effective routing, highest approval chances, and fastest transaction approval It also reroutes the payments if there is any technical glitch in the system

Employ an advanced data analytics tool

Data analysis is the best tool to take the right decisions about transactions and analyze payment traffic and monitor approval rates. knowing every nook and cranny of the transactions is the best thing to manage the payments properly Yes, the major headache to manage transactions goes to a payment gateway but a merchant has to keep an eye on these transactions, after all, it’s his business.

Use the card updater tool

The card updater tool updates the merchant about the credit cards that are about to reach their expiry date In that case, the merchant can send a notification to the customer about his card which in turn prevents missed payments for the merchants. The customer can immediately take the necessary action and can start making monthly payments again In subscription-based businesses, the card updaters work very well

Offer multiple payment methods

Customers always want to pay through their preferred payment method no matter whether the merchant is from the same country or based in some other nation. For example – credit cards like VISA, Master Card, and American Express are quite popular in many parts of the world But the countries that do not provide it may lose millions of customers who use these cards. Similarly, today some customers want to make crypto payments which may not be very popular but they may not choose a merchant if this option is not available A merchant does not know in which direction his business will expand in the future depending on the opportunities. It is the reason, that merchants also try to provide all payment methods as much as possible

Conclusion

The success of a business depends thoroughly on the performance of a payment gateway. The more efficient the payment gateway the more successful will be a merchant All the above aspects explain the significance of a payment gateway and also describe why merchants depend on a payment gateway so much. If you are also looking to open a payment gateway in India, follow the above guide to stay focused and not lose attention to important aspects