Monday, August 31, 2009

Which Payment Gateway to use in India?

Every internet startup, sooner or later, faces this question - How do I charge money from my customer online? And there comes the ultimate question of which internet payment gateway to use on your website. This is a tricky question particularly in the Indian context, as payment gateways available in India do not come cheap and can have issues with reliability as well.

We were also faced with this ultimate question for, and we did our research.

There are 2 types of players in this field, one is a 3rd party service like ccavenue, ebs etc which ties up with many banks, and other is the bank itself providing its own payment gateway (like ICICI payseal). Broadly they are different in the following ways:

  • Both players accept all type of Mastercard and Visa credit cards. 3rd party players typically have more options than banks in terms of debit card acceptance, net banking options and other payments modes like cash card.
  • Banks are for high volume players. They have lower TDR (the % money they keep per transaction) plans and relatively lower setup fees than 3rd party providers, but if you have low volumes, they would turn out to be expensive.
  • 3rd party players have plans as cheap as Rs 5,000 setup fee, but the TDRs can go as high as 7%. They would never go below a TDR of 2.5% approx, which means that at higher volumes, you would need to switch to a bank to get a TDR below 2.5%
  • Banks need lots and lots of paperwork, and integration time is usually more than 2 weeks. 3rd party players typically have lesser requirements.

Here is my individual assessment of the players I contacted:
  • Paypal : I am starting with this as most people suggest it on internet. Biggest issue with paypal is that it doesn't support transactions in Indian Currency, and hence it adds a currency conversion fee on the credit card. Also, I feel that asking an indian consumer to pay in dollars would turn him away just because of the psychological impact.
  • CCAvenue : The biggest 3rd party player in India. Offers variety of payment options which no other player come even close. Heard that it is quite reliable too. They are also the most expensive in the industry. They don't offer any custom plan other than the ones mentioned on their site, and they don't negotiate either (atleast with small players)
  • EBS : Probably the second best player after ccavenue. The plans are cheaper compared to most payment gateways. They were very responsive when I dropped my phone no on their site and offered me multiple custom plans as well as some discounts. Somehow I didn't find too many existing clients for this.
  • ICICI Payseal : They are probably the only bank who offer to small enterprises as well. If you are willing to spend in excess of Rs 25,000 in setup fees than you would get a better deal here than any 3rd party player. However, 2 issues to note specific to them: Technology reqt of java in integrating their gateway and issues with downtime. I personally noticed their gateway being down for several hours on irctc as well as pvrcinemas recently.
  • Times of Money Direcpay : A relatively newer player in the market. One of its clients told me that they still face a few technical issues here and there. They responded pretty late when I dropped my contact no on their site and offered prices similar or higher than EBS.
  • We tried contacting to Citibank(Billdesk) but they didn't respond. We didn't talk to HDFC at all as we didn't get good reviews for them.
The final two we shortlist out of these for us were EBS and ICICI. Of these, we decided to go to EBS, because:
  • ICICI Payseal had technology dependency on Java. When discussed, they offered another gateway with no such limitation called Nix. But I couldn't find any documentation on that.
  • I believe that EBS should be more reliable than ICICI in terms of higher speed and lower downtime.
  • EBS offers more payment options than ICICI, though the difference is not that great for this to be the sole reason.
  • With EBS, even the plans with low setup costs like their silver plan has reasonable TDR for a small business. Once our volumes are high, we can upgrade to a better plan.


  1. Dear Sanjay,

    Thanks for this post. It is a nice summary. We too faced this dilemma. We have also taken EBS and presently our transactions are not many. We could not get any details from HDFC and AXIS bank as we need to be having merchant account with them before they give any detail. Some of the people who answer the calls do not have any knowledge of online transactions.


  2. Good article. Wish we had this before we decided on the gateway for our site ( Definitely useful people who are in the decision stage.

    We are with CCAvenue and have been pretty happy with their service.

  3. I think you made a good choice. At one point of time, reliability becomes the top most requirement since you don't want to spend sleepless nights wondering how many of the customers you are loosing because they are not able to use the gateway. It would be interesting to hear your thoughts 3-4 months down the line about EBS :)


  4. Does EBS allow you to accept payments on your site or do you have to redirect users to their gateway?

  5. It redirects to their gateway. All other gateways do the same for small merchants.
    I didn't ask this question in detail but there are certain other prerequisites like getting a security certificate from a 3rd party vendor (different from SSL certificate)

  6. Yet another good post Sanjay. You should turn this into a "Lessons Learned as a startup" series :)

  7. Are you using EBS currently? Can you please share your experience using EBS gateway? Have you tried any new ones?

  8. Yes we are using EBS. But it is too early to give any feedback.

  9. Good comparison.
    I recently bought the service from ccavenue for Documentation is tough. But ccavenue helped me through it. unfortunately EBS couldnot help reduce the documentation requirement.

  10. Sanjay great post, lots of valuable information.
    Does EBS accept payments in non-indian currencies? eg for customers outside india who want to pay in USD etc.?
    Thanks again!

  11. I guess they accept only in INR, but they do accept international cards. The card would be debited in INR, and it would be onto the credit card company to charge currency conversion fees.

  12. We are starting a company and cannot decide between CCAvenue and EBS. Now that you have been using EBS for a little while, what do you think? Are you happy with the service provided? If you were starting off again whom would you choose? Thanks in anticipation.

  13. Good article. Probably need a second version with a table which lists various criteria such as:

    1. Speed of set-up
    2. Set-up charges
    3. ongoing charges
    4. Transation size
    5. Tansaction volume
    6. Security/fraud prevention

    Give each solution a rating - 1 to 6 and possibly notes. A bit of work but would be very useful

  14. Due to a change in company strategy, we have not yet integrated EBS with our portal. I do not have any further feedback for them until we do so.

  15. We have integrated EBS payment gateway into our ECommerce portal and the portal is LIVE for a month. Some of the issues we faced :

    1) No Support over weekends and during Off hours. We faced payment gateway related issues during this time and we lost few orders

    2)Myself being a ECommerce technical architect from California. The Integration is not that good in EBS part. We see the payment gateways giving error responses & that was happening on EBS side.

    3) Because of (2) Customers complain that they see Authorization on their card, but we did not receive any message from EBS integration modules. I personally verified this with my Card Payments, & I experience the same problem.

    All the above issues are very serious. Waiting for answers from EBS.

  16. Hi,

    Im prabhu from EBS.

    First of all i would like to thank Sanjay for Posting a comparative analysis of the industry.

    Even though i have seen this post on August 2008 i decided to comment on this now only as there were some comments on Our Services and technicalities.

    let me first take this opportunity in addressing the issues stated above.

    First is regarding Support.

    We have an fully automated Support Engine Live and Running at

    As We need reference details like Transaction ID,payment ID,payment channel Details etc in solving a Transaction Related Query we Dont encourage phone Support.

    For the Quarter Ended march 2010 98.8% of the Support Issues have been responded in 30 Minutes and Resolved in 4 Hours.We Do accept that 2.2% of our Queries are Resolved late.this is not only because of us but also because of pple who post the query from a Diff Accoount ID or who mention Details Wrongly.However We are constantly working on improving our After Sales Experience.

    Regarding Integration Issues,im surprised as the above comment is the first on our tech Competency or comfortability.For your Kind Information,We offer Our Integration Kits in 6 programming Languages and we have our Ready made Kits available for 15 Shopping carts which can be downloaded from the below link

    We do have Integration Issues.but Normally our Integration happens in 30 Mins to 45 Mins for any major programming Languages or Shopping carts.And any Issues on integration is being addressed and resolved with in 2 Working days.

    Apart from the above we have pre integrated our solution with major Online applications where there is no need for the merchant to Integrate at all.

    third is Authorization issues.there Might be Several Reasons for this.and out of all Reasons None is related to EBS Directly.To understand this further,EBS acts as a bridge between Payment Systems and merchant.If the Internet connection is poor from the customers END,or if the banks Servers takes time in sending their response or Most Importantly if the Merchant haven't configured their Response URL Wrongly this problem occurs.

    Thats the Very reason we Ask our Merchants to Do a live Transaction as soon as we make the account Live.

    I'll be very happy to Assist you particularly if you can send me the details of your goodselves and the problems you are facing if any.

    You can reach me at

    before me concluding on this i would like to update something about EBS as this post is dated in August and in last 6 Months there were so many Developments from our end.

    1.Im happy in informing that More than 1200 business units believes EBS is Good.

    2.We have installed our State of Art Risk Management System which is first of its Kind in Payment gateway Industry in India.

    3.Our overall charge back Ratio is Lowest in India and our Fraud Ratio is Nil.

    4.many New payments options are enabled and many more is on Pipe.

    5.Our Inbuilt Shopping cart is Live.

    We always put safety first than comfortability as Our Business is managing YOUR Money.

    for any specific Queries on EBS you can always reach me on

    Once again thanking Sanjay for starting a discussion on EBS and giving me an opportunity in responding to the concerns!!



  17. Thanks Prabhu for the comment. It is good to see company representatives responding to the queries on forums such as this blog. I am sure the readers of this post will find it useful.

  18. Thank you very much Mr. Prabhu & Mr. Sanjay to share such kind of information

  19. integrate ebs and paypal onto ur site .both will cover almost all indian debit cards and international credit cards . it is best option till date

  20. Thanks Mr.Prabhu.I was confused in selecting a service provider and now im going with ebs.The most surprising part is to check whether you are responding properly i sent an email to you.I got a reply in 5 mins!!!Even though you just refered me to your marketing team thats fine with me.

    Expecting the same response in future too.

  21. Does Paypal allow Indian merchants to take payments from Indian customers. We tried doing that but got an error.

  22. the best option that you can imagine also.....but it will be only safe and not blocked if you know how to play with it......

    1.paypal dosent blocks/limits a business account if you are really authentic and your turn over is more than 2 cr(inr)

    2.always associate your company with a big brand name in the present country in which you are.........and then see the result by your own eyes..

    3.about the transactions i think the professionals know that if you have an outbound process then the charges of conversion are best and cheaper in paypal if compared to any gateway..

    i was really smiling when i was reading all the posts..dont take me wrong guys...

    but let me clarify that i am using paypal for my transactions probably for more than 2 years...and all the issues which happened related to chargebacks and all were resolved within 5 working days...

    OH!!! by the way guys....
    my name is Mr.Suraj Sharma
    I am the ownewr of the company TARANG TECHNOLOGIES

    i know after reading this many people would like to know more....

    For further clarification you can contact me on


  23. CCAvenue has also problem with service. Especially with regard to the money settlement days. They keep our money for 4-5 days and then send the money. If we ask them to settle earlier there reply is they are short of staff. I have called to a person named Mr Nandkumar in CCAvenue, but somehow he escapes and the issue is not solved. Also recently they had sent our money to some other bank account and till now they are clueless...There failure rate is also high.

  24. Hi Tabla,

    Pls send me your details to

    Normally we dont deactivate the services without reasons.


  25. With Paypal we can't receive payments in India. Also CCAvenue privilege plan now has TDR of 3% only. I think ICICI too should have reduced it.
    I've just now seen someone selling CCAvenue plans for 20% discount at: this site

  26. I paid up for the EBS gateway in Dec 2011. Facing serious problems in documentation. After sending me a list of documents required and accepting my setup fee, company has added another requirement of a very objectionable document on behalf of Citibank. They go back on their commitment after accepting the fee money. Am considering proceeding against EBS.

  27. helllo people....there is a lot of discussion going on about EBS and CCavenue....but for startups there are gateways which provide integration without any cost....a few are TRANSECUTe and 2CHECKOUT

    newer indian payment gateway is any one please give reviews on these payment gateways or anyother u think is better than ccavenue or ebs