Last Updated on May 20, 2021 by MoneyVisual
Payment gateways are perhaps the most useful technologies of today. Before the establishment of the online payment gateway industry in India, there wasn’t any secure and reliable way to make online transactions.
For this reason, people took a good amount of time to familiarize themselves with online payment systems. But with the arrival of advanced payment gateways in India, financial transactions have become secure, easy, and streamlined.
If we go by the stats, the demand for digital payments in India has increased by a whopping 106% in the last few months.
Online payment gateways have made the flow of transactions fast, secure and hassle-free.
Online payment gateway services allow the merchants to accept online payments via credit cards, debit card, UPIs and even online wallets, helping the customers to a great extent. Over the last few years, the digital payment industry has seen massive growth.
Out of all the areas, the e-Commerce industry is the biggest application area of payment gateways as they provide the customers with reliable and trustworthy ways to make payments. Let’s discuss more the importance of the online payment gateway industry in India!
What is an Online Payment Gateway? How Does It Work?
A payment gateway is basically an application or a service that makes the digital payment process synchronized and secure. It acts as a secure interface between a merchant’s website or app and the bank.
Here is how it works:
- The role of an online payment gateway begins as soon as a customer visits your store and adds products to his cart.
- At the time of checkout, your application or website that is registered with a trusted payment gateway sends the payment details such as the credit /debit or Net Banking information of the customer to the payment gateway service.
- Next, the registered payment gateway verifies the customer’s payment details and confirms them with the bank.
- Once the verification is done, the required amount is transferred from the customer’s account to your account, within a couple of minutes.
- Hence, an online payment gateway acts as a secured medium that ensures streamlined and safe online financial transactions.
What is the Need for an Online Payment Gateway?
The merchant account providers are collaborating with the payment gateway services because of a number of benefits. Some of these benefits include the following :
Secure & Reliable Transactions
Digital payment gateways use advanced encryption methods that ensure tighter security to both the merchants and their customers. Simply put, they protect the users from online frauds.
Increased Customer Base
Payment gateways allow customers from all across the globe to access your store. Because this technology enables accepting payments from different countries and in different currencies, you can expand your customer base to a great extent.
Faster and Relaxed Transactions
Perhaps the biggest advantage of having payment gateways is that they offer much faster transactions than manual payment processing. Neither you nor your customers have to wait in queues for processing a transaction no matter how big or small it is. With a reliable payment gateway at your disposal, you and your customer can accept/make payments 24*7 from anywhere in the world.
India’s Payment Gateway Industry Today
As we already discussed, the payment gateway industry in India has seen impressive growth in the past few years. These services provide end-to-end solutions for a highly satisfactory customer experience.
They are among the key tools of merchants that allow them to accept different types of payments. To assist the customers, even more, the reputed payment gateways have also integrated with a number of banking platforms.
Apart from this, the government initiative like Digital India has played a key role in making online payment gateways an integral part of living. With the advent of Digital India, e-Commerce platforms have become more and more popular and so are the payment gateways in the country.
With this increased demand for digital payments, the online payment gateway industry is expected to reach the $88 Billion benchmark by 2027.
The Future of Payment Gateway Industry in India
By looking at the stats and the current demand for digital payments, it is believed that the payment gateway market will boom shortly. As the digital ecosystem will grow, the services and platforms will take a step forward to their automation. This in turn will increase both the power and frequency of the existing digital platforms, services, software, gadgets and whatnot.
Soon, the rural areas of the country will also open more to the online payment markets, all thanks to technology and digitalization. Further, technological advancements will make online payment gateway services more powerful and efficient.
This will not only give a much-needed boost to our economy but will also transform the way financial transactions are conducted in the country, for good.
Further, the biggest advantages will be enjoyed by the e-Commerce industry as they’ll be able to expand their customer base and build a stronger relationship with their customers while nourishing their ROI.