This guide unlocks the secrets of online payments, offering a clear overview and delving into the unique needs of different business models. Whether you’re an e-commerce powerhouse, a subscription service leader, or a marketplace maestro, we’ll equip you with the knowledge to navigate the online payment landscape easily.

Dive into:

  • The fundamentals: Understand the core mechanics of online payments, from processing to security.

  • Tailored strategies: Explore payment solutions specifically designed for your business model, maximizing convenience and conversion.

  • Nuances and considerations: Uncover the key factors to navigate, like fees, integrations, and regional preferences.

Online payments: How money moves from your customer to your business

Imagine you’re selling delicious homemade treats online. When someone places an order and pays with their card, magic doesn’t happen (though it might seem that way!). A whole system behind the scenes ensures money moves smoothly from your customer to your business. Let’s break it down:

Online payments flow is simple:

  • You: The awesome business owner making delicious treats!

  • Your customer: The person buying your yummy creations.

  • The acquirer: Think of them as the “payment gateway,” handling transactions and routing them to the right places.

  • Issuing bank: This bank issues the card your customer uses and ultimately approves or declines the transaction.

The journey of money:

  1. Setting up shop: You need a business bank account and a partner like an acquirer or processor. Think of them like the “middlemen” connecting your website and the card networks (Visa, Mastercard, etc.).
  2. Secure checkout: You might use a “gateway” to encrypt your customer’s payment details, keeping things safe and secure. Imagine it like a special code that protects their information.
  3. Payment time!: When your customer clicks “pay,” the encrypted details travel through the gateway and acquirer to the card network.
  4. The big decision: The card network sends a message to the issuing bank, asking if there’s enough money and if everything is okay. Consider it like checking if your customer has enough ingredients for your treats!
  5. Yes or No?: The issuing bank sends a response back, either approving the payment (yes!) or declining it (sorry, not enough ingredients!).
  6. Confirmation time: You get a notification (like a “payment accepted” message on your website), and your customer knows their order is coming!

Beyond the basics:

  • International sales: Selling treats worldwide? You might need local bank partners to handle payments smoothly.

  • Recurring payments: Subscription boxes for your treats? You’ll need a system to charge customers and handle different pricing models automatically.

  • Challenges: Dealing with failed payments, plan changes, and other bumps in the road. There are tools and solutions to help!

Remember, this is a simplified overview. But hopefully, it gives you a clearer picture of how online payments work, helping you make informed decisions for your sweet treat business (or any business, really!).

Understanding online payment transaction fees and associated costs

Ever wondered why online payments involve fees? Don’t worry; you’re not alone! This post will help you understand the different fees associated with online transactions in India, keeping it simple and relatable.

Imagine your online payment as a journey involving four key players: you (the shopper), the merchant you’re buying from, your bank, and the card network (like Visa or Mastercard). Each player ensures a secure and smooth transaction, and fees are involved to cover their costs.

The biggest share: Interchange fees

Consider interchange fees as a reward for your bank for taking the risk of extending your credit or providing banking services. They form the major chunk of the costs and are set by card networks like Rupay, Visa, Mastercard, etc. The exact amount depends on various factors like:

  • Your card type: Rewards cards have higher fees due to the rewards offered.

  • Transaction location: International transactions usually have higher fees.

  • Payment method: Offline swipe transactions may have different fees than online payments.

  • Merchant category: The type of business you’re buying from can influence fees (e.g., airlines might have higher fees).

Card network fees: More than just processing

Remember the journey? Card networks also charge fees for authorization, cross-border transactions, and other services. These are like tolls you pay to use the "payment highway."

Additional fees: Not always hidden

Refunds, chargebacks, and specific network services may also involve additional fees. While these are less common, it’s good to be aware of them.


  • Fees vary: The specific fees you pay depend on the abovementioned factors.

  • Transparency is key: Many merchants now display payment processing fees upfront.

  • Compare options: Look for cards and merchants with competitive fees that suit your needs.

By understanding these fees, you can make informed choices and confidently navigate the world of online payments in India!

Additional Tips:

  • Look for debit cards with lower interchange fees compared to credit cards.

  • Consider e-wallets like Paytm or PhonePe that offer competitive fees and cashback options.

  • Choose merchants with transparent pricing that includes any processing fees.

How streamlining your online payment funnel drives conversions in India

Imagine a bustling marketplace filled with eager shoppers ready to buy. But as they approach the checkout counter, a long line forms, the process gets tedious, and some frustrated customers abandon their carts. This, unfortunately, reflects the reality of many online payment funnels in India, where friction and complexity can hinder conversions.

But fear not! By optimizing your online payment funnel, you can transform it into a seamless journey for your customers, leading to increased sales and a thriving business. Here’s how:

  1. Three steps, One goal:

  2. Every transaction flows through three key stages: checkout completion, fraud protection, and network acceptance. Each stage acts as a filter, potentially shrinking your pool of potential customers. The key to success is optimizing each stage for smooth flow and minimal drop-offs.

  3. Frictionless checkout: The first impression counts:

  4. The checkout process is where your customer interacts directly with your payment system. Here’s how to make it a breeze:

    • Simplify the form: Don’t overwhelm customers with excessive fields. Collect only essential information, like name, address, and payment details.

    • Embrace mobile: Optimize your checkout for mobile devices with responsive design and auto-fill options.

    • Offer local payment options: Cater to Indian preferences by integrating popular wallets like Paytm, PhonePe, Google Pay, and UPI. Familiar options build trust and encourage adoption.

    • Cash on delivery (COD): While digital payments are growing, COD remains a popular choice for many Indians, especially first-time shoppers. Offering COD builds trust and encourages hesitant customers.

  5. Secure transactions: Building trust is paramount:

  6. Fraudulent transactions can be a nightmare for both you and your customers. Here’s how to ensure security and peace of mind:

    • Implement robust fraud detection: Utilize machine learning algorithms to identify and prevent fraudulent transactions while balancing security with a seamless experience.

    • Comply with regulations: Ensure adherence to data privacy regulations like PCI DSS and GDPR to build trust and protect customer information.

    • Display security badges: Prominently display trusted security badges like Verisign and McAfee to assure customers of the safety of their information.

  7. Streamlined network acceptance: Every transaction counts:

  8. The final hurdle is successful network acceptance by the issuing bank. Here’s how to optimize this stage:

    • Collect complete information: Capture essential details like CVC, billing address, and postcode to provide the issuing bank with additional verification points, reducing unnecessary declines.

    • Partner with reliable payment processors: Choose a reputable payment gateway like Easebuzz with high network acceptance rates and strong fraud prevention capabilities.

  9. Beyond the transaction: The journey continues:

  10. The customer journey doesn’t end with the payment. Keep them engaged by:

    • Providing order updates: Send timely notifications about order confirmation, shipping progress, and potential delays.

    • Offering easy returns and refunds: Create a hassle-free return and refund policy to build trust and encourage repeat purchases.

    Remember, a smooth payment experience is not just a convenience; it’s a key driver of conversions and business growth. So, optimize your funnel, build trust, and watch your sales soar!

    • Leverage social proof effectively: Display customer testimonials, influencer endorsements, and positive reviews on your payment page to build trust and encourage action.

Understanding the payment landscape for Indian customers: Beyond credit cards

Beyond cards: The Indian payment powerhouse

Forget the “credit card only” mentality. In India, 60% of online transactions happen through methods other than credit cards. Understanding and offering these alternatives to your customers is key to boosting conversions and capturing a larger market share.

  1. Digital wallets: The undisputed champions, digital wallets like Paytm, PhonePe, Google Pay, and Amazon Pay rule the roost. These mobile apps allow users to store money, link bank accounts, and pay seamlessly with just a few clicks.
  2. UPI: Imagine sending money as easily as sending a text! That’s the magic of the Unified Payments Interface (UPI). This instant, bank-to-bank payment system is gaining immense popularity, especially among younger generations.
  3. Netbanking: Trustworthy and familiar, netbanking allows customers to pay directly from their bank accounts using online portals. Partner with major Indian banks to offer this widely trusted option.
  4. Cash on delivery (COD): Still a significant player, COD provides peace of mind to first-time online shoppers or those wary of digital transactions. Offering COD builds trust and expands your customer base.
  5. Debit cards: While less prevalent than wallets and UPI, debit cards still exist, particularly for smaller transactions. Ensure you accept major Indian debit cards like RuPay and Visa.

Tailoring your strategy for success:

  1. Embrace local partnerships: Partner with trusted and secured payment gateways like Easebuzz to offer your customers a smooth and secure experience.
  2. Go mobile-first: With over 600 million smartphone users in India, a mobile-optimized payment page is non-negotiable. Make it easy for customers to pay on the go.
  3. Localize your communication: Speak their language! Offer your payment page and customer support in Hindi, Tamil, Telugu, and other major regional languages.
  4. Transparency is key: Display all fees, taxes, and shipping costs upfront. Build trust by providing secure checkout badges and encryption certificates.
  5. Offer frictionless payment: Streamline your checkout process with single-click payments, auto-fill options, and guest checkout. Making paying a breeze.

Online to offline: Unifying payments for Indian retailers

Selling online is booming in India, but many successful digital businesses are expanding to physical stores too. While online shopping dominates, over 90% of purchases still happen in person, presenting a massive opportunity for online retailers.

The key challenge? Connecting your online and offline payment experience. Customers expect a seamless brand journey across channels, including consistent payment options. They might even expect online discounts to apply in-store!

Here’s how to bridge the gap:

  1. Leverage your online payment system:

    Forget juggling separate online and offline providers. Use your existing online payment infrastructure for in-person sales, too. This saves time and resources and streamlines your operations.

    Imagine a customer starting an in-store subscription that continues online. Their payment details automatically link to their online profile, making future purchases smooth and hassle-free.

  2. Go secure and modern:

    Ditch old magnetic stripe readers. They’re risky and outdated. Instead, invest in a modern reader that accepts EMV chip cards. These global standards for secure transactions protect both you and your customers.

    Consider offering mobile wallets like Phonepe, Amazon Pay, Paytm, and Google Pay in-store. They’re secure, convenient, and popular with Indian customers.

Benefits of a Unified Payment System:

  • Seamless experience: Customers pay the same way online or in-store, building brand loyalty.

  • Simplified management: One system equals easier reporting and reconciliation.

  • Happy customers: Secure and convenient payments build trust and encourage repeat business.

  • Offer cash on delivery (COD): While digital payments grow, COD remains popular in India, especially for first-time buyers. Offering COD builds trust and encourages hesitant customers to shop with you.

Unifying your online and offline payments will unlock a new revenue stream and create a seamless, secure experience for your Indian customers. Remember, a smooth checkout is vital for conversions and business success!

Streamlining recurring payments for Indian SaaS & subscription businesses

Running a SaaS or subscription business in India has challenges, especially when managing recurring payments. Whether you’re a seasoned player or just starting, ensuring smooth payment journeys is crucial for keeping your customers happy and boosting your bottom line.

  1. Master flexible subscription logic:

    • Pricing freedom: As your Indian user base grows, you’ll likely want to offer varied plans and promotions. Ensure your system handles models like flat-rate, per-user, tiered, freemium, and trials. Remember, Indians often respond well to bundled packages and discounts.

    • Proration power: Customers might upgrade or downgrade plans mid-month. Your system should automatically calculate prorated charges to ensure they pay the correct amount.

  2. Conquer Invoicing needs:

    • Large amounts & One-off bills: Customers appreciate receiving clear and customizable invoices for larger subscriptions or one-time invoices (common in B2B scenarios).

    • Local compliance: Address local invoicing requirements like sequential numbering and prefixes tailored to India.

    • Automation magic: Streamline the process by automating invoice creation and sending via email, saving you valuable time and effort.

  3. Minimize Involuntary churn:

  4. Payment hiccups: Around 9% of initial charges in India fail due to expired cards or low funds. Address this by:

    • Automated reminders: Send timely email notifications about failed payments with clear instructions to update information.

    • Dunning savvy: Retry failed transactions at strategic intervals (experiment to find the optimal cadence for your audience).

    • Partner up: Consider payment providers offering automated and customizable dunning solutions.

  5. Beyond the basics:

    • Localize for success: Cater to your Indian audience by offering payment methods like Paytm, PhonePe, Google Pay, and UPI alongside credit cards. Additionally, providing support in regional languages like Hindi, Tamil, and Telugu builds trust and encourages wider adoption.

    • Mobile-first mindset: With India’s massive smartphone user base, ensure your payment system is fully optimized for mobile devices, offering a seamless experience on any screen.

    • Cash on delivery (COD): While digital payments are growing, COD remains a popular option, especially for first-time customers. Offering COD as an option builds trust and encourages hesitant buyers.

    A smooth and secure payment experience is crucial for any business, but understanding local preferences and offering flexibility is key to winning over Indian customers. By implementing these strategies, you can build a resilient subscription model, minimize churn, and unlock long-term growth for your SaaS business in India.

Easebuzz recurri: Your All-in-One solution

Stop juggling complex billing systems and worrying about payment headaches. Easebuzz Recurri offers a comprehensive solution built specifically for SaaS and subscription businesses in India.

With flexible pricing models, automated invoicing, dunning management, local payment options, regulatory compliance, seamless integrations, and insightful reporting, Recurri empowers you to focus on what matters most - delivering a phenomenal product and growing your business.

How platforms and marketplaces in India can add payments

Running a platform or marketplace in India is exciting, but adding payments can feel like navigating a complex labyrinth. Fear not, fellow entrepreneurs! This guide will illuminate the intricacies, empowering you to offer smooth payment options while staying compliant and boosting your business.

  • Why payments matter: Think of payments as the final handshake in your customer journey. A smooth experience seals the deal, while a clunky one leaves users frustrated and abandoning carts. Offering payments directly on your platform adds value for your sellers and differentiates you from the competition.

  • The traditional hurdles: Previously, becoming a “payment facilitator” meant months of licensing, hefty fees, and strict regulations. But worry not; there are modern alternatives!

  • Modern payment solutions: Today, platforms like yours can integrate payment features without becoming payment facilitators. Two key considerations emerge

  1. Verifying users smoothly:

  2. Before accepting money, you need to verify the sellers’ identities. This involves complying with KYC (Know Your Customer) laws and sanctions screening. While crucial, it can feel intrusive.

    Here’s the balancing act:

    • Collect crucial details: Name, email, address, and phone number are essential.

    • Make it user-friendly: Phased data collection and pre-populated fields ease the process.

    • Stay compliant: Partner with reliable verification services.

  3. Moving money efficiently:

  4. Paying your sellers involves more than just a simple transfer. You need to:

    • Take your platform fee: This is your revenue stream.

    • Split and route funds: Divide proceeds among sellers and yourself.

    • Control payout timing: Decide when sellers receive their money.

    Compliance is key:

    • Licensing: You might need licenses for money transmission, depending on your location.

    • Partner with experts: Work with payment providers who understand regulations.

    Supported money movement methods:

    • One-to-one: Ideal for ride-sharing platforms where one customer pays one recipient.

    • One-to-many: Perfect for marketplaces where a customer’s purchase benefits multiple sellers.

    • Holding funds: Useful for ticketing platforms where payment happens after the event.

    • Account debits: Great for platforms charging monthly fees to sellers.

    • Subscriptions: Enables sellers to collect recurring payments (e.g. Easebuzz Recurri platforms).

Understanding payments in India: Your handy glossary

Navigating the world of online payments in India can feel like deciphering a whole new language. Worry not; this glossary sheds light on common terms you’ll encounter, making your journey smoother!

  • Acquirer: Imagine them as the bank on the shop’s side, handling your credit/debit card payments and sending them to your bank (issuer).

  • Bank transfers: This can be pulling money directly from your customer’s account (debit) or them pushing it to you (credit), both requiring their bank details.

  • Cardholder: You, the person proudly flashing your plastic (or using it digitally)!

  • Card networks: Like Visa or Mastercard, they connect merchants and issuers, deciding where your card works and charging small fees.

  • Chargeback: When you disagree with a payment, you can dispute it with your bank (issuer). The money might be reversed (chargeback) if found valid, leaving the shop responsible for proving it was legit.

  • Chargeback fees: Ouch! These are penalties the shop pays when a chargeback happens.

  • Digital wallets: Forget bulky wallets! PayPay, PhonePe, Google Pay - these store your card details or even cash digitally, letting you pay seamlessly.

  • Four-Party system: It’s a team effort! Think of you (cardholder), the shop (merchant), their bank (acquirer), and your bank (issuer) working together for each transaction.

  • Fraud: When someone uses your card details without permission, making a fake transaction. Be vigilant!

  • Interchange fee: A small fee your bank (issuer) charges the shop for using your card.

  • Issuing bank: The one that gave you your credit/debit card. They keep track of your balance and handle disputes.

  • Merchant category code (MCC): This four-digit code tells banks what kind of shop you’re buying from (grocery, electronics, etc.).

  • Network acceptance: Not all transactions go through smoothly. Sometimes, your bank (issuer) might decline a payment (insufficient funds, suspicion of fraud, etc.).

  • Network costs: The sum of interchange and scheme fees the shop pays for each card transaction.

  • Payment facilitator: Platforms like Amazon or Flipkart used to need special permission to handle payments directly. Today, most platforms can offer payments without this hassle.

  • Payment gateway: Like a secure tunnel, it encrypts your card information when you pay online and sends it to the shop’s bank (acquirer).

  • Payment method: How you choose to pay - card, wallet, bank transfer, the options are plenty!

  • Payment processor: This behind-the-scenes player handles the communication between your bank, the shop’s bank, and the payment gateway, ensuring everything flows smoothly.

  • PCI Data Security Standards (PCI DSS): These strict rules ensure that your card information is safe wherever you shop online.

Remember, understanding these terms empowers you to navigate online payments in India confidently.


What is online payment?

Online payment: Transferring money digitally without cash or checks. Like paying bills, shopping, or sending money to friends.

Which online payment app is best for cashback?

Cashback apps: Many offer cashback, but deals change frequently. Popular options include PhonePe, Paytm, Google Pay, Amazon Pay, and HDFC PayZapp. Compare current offers before choosing.

How to pay online payment?

Paying online: Varies by platform. Usually involves entering payment details (card, bank account, etc.) and confirming the transaction. Follow the specific instructions provided.

Which online payment app is best?

Best app: Depends on your needs and preferences. Consider factors like security, features, deals, and ease of use. Research and compare options before choosing.

What is VPA in online payment?

VPA (Virtual Payment Address): A unique identifier linked to your bank account for quick, easy, secure money transfers. Examples include PhonePe UPI ID, Paytm UPI ID, etc.


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