Evolution of payment gateway

Evolution of Payment Gateway

When it comes to payment methods, we have witnessed significant advances. From barter system to digital payments, we have come a long way. This blog outlines the evolution of payment gateway all over the globe.

Barter system begins

So, before we start talking about our protagonist, i.e. the best payment gateway for e-commerce, let’s have a quick glance at the payment methods used before payment gateway. Around 3000 BC the barter system was used. In the barter system, two or more parties engaged in an exchange that involved goods or services of the same value.

The closest a civilization came to discovery of coins

Around 1600 BC, China came closest to inventing the coin. Before 1600 BC, tools and weapons were widely used in China as a medium of exchange. To aid convenience, the Chinese started using miniatures of these tools and weapons. These miniatures were later made in the shape of a circle. At this point of time, this was the closest any civilization had come to the discovery of coins.

The advent of coins

In 600 BC, coins were minted for the first time in Lydia. They were made from a mixture of gold and silver called electrum. The king of Lydia, Alyattes, the fourth king of the Mermnad dynasty is credited to have minted the first gold coin. It was the official currency of Lydia.

China introduces cash to the world

In 806 AD, the printed notes were first used in China. Their western counterparts were not willing to implement this payment method at that time. But their usage grew over the next 500 years. Marco Polo was an Italian explorer who was one of the first explorers to provide a detailed report of his experiences in China. In his report, he wrote of the paper money being used in China, which made it a thriving economy.

Europe catches on

It was in the 16th century that European countries started using cash instead of coins. A bank in Sweden first introduced the concept of cash (paper money) in 1661. Eventually, more banks in Europe accepted the idea of paper money. These notes were issued to depositors and borrowers instead of coins. A bank was liable to pay the equivalent value of gold or silver coins if a person took these notes to the bank.

The world decides to go cashless

People realized that cash was merely a means to an end. It enabled you to buy the object you needed. So, the value was in a product and not the cash in the bank or cash at hand that bought it. That is when the idea of going cashless started to emerge. A notion developed that it was possible to transfer money without using these mediums. So you don’t have to carry cash and coins all the time.

Taking this notion forward in 1979, Visa introduced its breakthrough product: the credit card. So, what is a credit card? A credit card is a plastic card that enables us to buy goods and services on credit. The bank that issues the card decides a line of credit up to which a user can borrow money. This money is paid to the merchant who has offered goods or services. The credit card faced resistance initially when merchants didn’t have the necessary machinery at the point of sale. But eventually, it became a prominent electronic payment platform. This resulted in the development of the terminal ecosystem. A terminal is a device that facilitates electronic fund transfer once a card is swiped. This resulted in a significant increase in the sales of hardware manufacturers.

The internet era begins

By mid-90s the winds of change had begun to blow. The world witnessed an internet boom which took businesses online. This gave rise to several e-commerce giants. One of these online businesses is Amazon, who ventured into the business world as a start-up in 1994. It was followed by eBay in 1995. This increasing amount of online businesses made the terminal ecosystem insufficient. A better payment method was the need of the hour. This gave rise to companies that provided the technology of payment gateway.

So, what is a payment gateway? In simple words, a payment gateway is a means of making an online payment. It enables a merchant to collect money from the customer. It verifies the information provided by the user and the payment method and then authorizes the transaction. A customer provides sensitive data while making the transaction like card number, CVV, etc. To protect this sensitive data, payment gateway solutions use encryption.

Payment gateway companies focus merely on providing an interface between a payment portal such as a website and the acquiring bank. A few of these companies are PayPal, CyberSource, DataCash Group, etc.

Today, this new type of payment is not just limited to the western world. India has mirrored the scope for payment gateways as well. It has more than 1 billion mobile subscriptions, which is the second-largest in the world. There are over 240 million smart-phone users and these numbers are only going to increase. It is predicted that by 2020 over 600 million users will have internet access with 3G or 4G connections.

All of this provides a very promising future for payment gateway companies in India. Moreover, the government and regulatory bodies have created a congenial environment to welcome these companies. They have taken steps such as KYC relaxation for small transactions, 2-factor authentication exemption, etc. The most important action taken by the government was the promotion of cashless transactions. Indians were gradually shifting to cashless transactions, but the government regulations accelerated this process.

Today, these companies need to take care of several factors such as security, integration and transparency. Easebuzz is one such payment gateway company in Pune that focuses on facilitating online transactions. We are PCI DSS compliant. We provide end to end encryption that protects sensitive data and offers strong security to our clients. All of this makes us a perfect fit when it comes to choosing a safe and instant payment method in 2019.

Signs That You Need a New Payment Gateway

If you have any kind of online business, the payment provider you choose is one of your most important partners. It is an indispensable interface between you, your customers, and your bank and allows safe, convenient, and timely transactions between you and your customers.

Seeing the significance of your payment gateway partner keeping its performance in check is necessary. Keep a keen eye to check for any of the following signs that reflect whether your payment provider is benefiting or costing your business:

Sign #1: Not enough payment options
Customers like to have more than one payment option. With the level of distrust around online transactions still not vanquished, more payment options help instill trust in customers towards your offering. Credit cards, debit cards, and direct bank transfers are major payment methods in the market that customers expect from you if not more.

A good payment gateway should not only offer all three payment methods, it should also be easy to use for you as the merchant. Steer clear from gateways that require you to create or log in to more than one account, or download multiple reports. Concise, comprehensible, easy to access information about every transaction through your gateway should be stored in one central location, from where it can be downloaded and interpreted easily.

Sign #2: Customers need to register twice through your payment gateway

Greater the number of hoops your customer has to jump through to complete a purchase, the more likely they are to leave halfway. If your website requires your customers to register before they can start shopping, they might grumble a little but most of them will stick with you. Asking them to register a second time before they actually make the payment can be problematic. You want to choose a payment gateway that makes the entire purchase process easier, not more complex.

Sign #3: Expensive or weak fraud protection
A number of specialist fraud protection services exist but they are quite expensive and time-consuming to run. You want to partner with a
payment gateway that offers affordable and easy to use fraud protection. This isn’t something you can risk ignoring as its one of the most important measures you can take to protect yourself against fraud. Ensure your gateway safeguards you from credit card fraud.

Ultimately it comes down to customer focus: As an online retailer, you want the effort you put into making your site experience a memorable, one that pays off.  If that effort is undermined because of your key partners it’s time to make some important changes. If you’re in search of a new partner, visit Easebuzz at <link>, one of the best options for a payment gateway India has.


Role of Payment Gateways in the Growth of SMEs

For the longest time small businesses have looked at e-commerce giants such as Amazon, E-bay, and Flipkart with envy. However the tide appears to be turning in the favor of the little guys.

Online payment gateways are encouraging and educating SMEs to establish a strong presence in the e-commerce market with the help of online payment systems.

Taking their businesses online will facilitate a greater occurrence of innovations for SMEs. For this steps are to be taken, to make business owners comfortable with using apps and other high-end technology.

The SMEs who have jumped on the payment gateway wagon have reported a 10% increase in the number of clients, increased visibility, and greater networks which resulted in a higher number of leads.

Easebuzz, a high-ranked payment gateway in India is one such entity that handles end to end payment flow for growing businesses across the country. Their services include creating multiple stores according to the businesses’ requirements, payment link solutions, and a single platform for handling complex processes from one place.

With Easebuzz, business owners have the option to create products like events tickets, physical items, digital items or subscription based services with a free integrated payment gateway.

Business owners also have the option to connect and share links of their webstore with their customers using any social media channel. This is one payment gateway in India that makes the process of collecting payments faster and smarter.

Customers are updated about order statuses through an automated order tracking system, the marketing tool by Easebuzz can be utilized to send mass e-mails and SMSes to a large audience, your webstore will be available on multiple platforms with optimized performance so that your business has high accessibility.

Furthermore, Easebuzz also allows business owners to use real-time reports and analytics derived from their dashboard to make faster and more informed business decisions.

For SMEs who are looking for a payment gateway in India to help them get their business online and make a strong footing in the world of e-commerce, this is probably your best choice; no one else makes it as easy as Easebuzz does.

Why Do I Need an Online Payment Gateway for My Online Business?

Adoption of digital payment methods chosen over cash or other modes of transactions is on the rise.

Digital finance and payment methods are powerful tools of improving sales and business for e-commerce merchants.

Unfortunately a lot of merchants are unaware of such advantages and only 40% of merchants are aware and benefiting from this facility.

This article breaks down the significance, uses, and suitability of an online payment gateway for potential or existing online retailers. Read further to learn how payment gateways work and how you can choose the right payment gateway for your business.

What is a payment gateway?

An online payment gateway authorizes transactions for e-businesses, online retailers, or traditional brick and mortar stores. It is used to transfer information between a payment portal and an acquiring bank. Payment gateways encode private information such as credit card details, to keep the information transfer between a customer and merchant secure.

How do payment gateways work?

A payment gateway first pulls information from a credit card transaction, encrypts this information, directs this information to the credit card processor, where the transaction is finally approved or declined. This is a seamless process between you and your customer via your shopping cart and a secure connection.

Why should I use a payment gateway?

Payment gateways are vital for keeping online transactions secure. They can be integrated with most websites and shopping carts online, to streamline online credit card processing. A shopping cart is usually used before the payment gateway. This allows customers to choose items they want to purchase and at the checkout, the shopping cart totals the items, adds tax and shipping and collects customer’s shipping and billing information.

How do I choose the best payment gateway?

Here is a checklist to finding the best payment gateway for your e-business:

  1. Budget of payment gateway

  2. Time of accepting payments

  3. Time of receiving revenue from sales

  4. Security of the gateway

  5. Cards accepted

  6. Compatibility with existing integrations

We hope this article was helpful in answering some doubts you may have had around using an online payment gateway.

How to choose an online payment gateway –questions you should ask

Choosing the right online payment gateway for your business is like choosing a partner for life. It crucial, and it gets difficult to select the one that matches your criteria.

Whether you are selecting a new online payment gateway provider or looking to replace your existing one, there are many questions that you would want to ask for an efficient, flexible product that fits your budget. Let’s look at what are the major concerns that you should raise when finalizing on an online payment gateway.

How easy is the onboarding process? 

Making business go fast is the aim of all entrepreneurs. The valuable time of an entrepreneur should be focused on their products or services, rather than staying busy in the gateway setting up process. For instance, Easebuzz, a payment gateway, provides complete online KYC process where the business can get started with handy PAN card and bank details. Find out a partner that provides quick onboarding.

Are there any value added features other than regular payment options?

Besides ensuring smooth transactions, payment gateways should provide other value-added services. From attracting customers to managing reports, event tracking, email and SMS marketing, referral schemes, quick pay options even without a website – there are numerous services that your provider can offer you and make your online operations easier.

How secure is the payment gateway?

Today, online businesses who accept digital payments face the risk of frauds, which can hurt the business badly. It’s important to go with a payment provider that offers secure transactions. This means it should at least conform to the PCI Data Security Standard (DSS) and has an end-to-end SSL encryption for all transactions.

How good is their customer support?

You’re dealing with monetary transactions and daily setting of funds, and so your solution provider should be accessible 24/7. You definitely need to know where to ask for support, and that you should not be waiting 24 or 48 hours to get their reply. Good payment gateways like Easebuzz will assign you an account manager that will be there for you when you need him.

Is the pricing transparent?  

Ask the provider to list down all the costs you might come across whilst using their service to avoid horrid surprises of paying double the actual price.

Your choice of online payment gateways in India can impact the overall experience that you promise your customers on the website, so think through consciously before choosing one. 

Blockchain And Its Impact On The Payment Industry

Today everyone is talking about blockchain technology and a number of organisations are racing to harness the power of its many applications. Let us understand what this means.

A blockchain is a distributed ledger of transactions that are recorded chronologically. Blocks that make up a blockchain contain data related to the most recent transaction and a hashed reference to the previous block.

This hashed reference creates a link between all the blocks in the chain, and as no one technically ‘owns’ a blockchain, it makes it impossible for any single participant to corrupt it. This data is stored across the blockchain network which gives it its inherent security.

Block chains can benefit international payments majorly due to the positive impact on speed, cost and security.

A payment gateway based on block-chain would enable payments to be sent anywhere in a period of 15 to 20 seconds. This is notably faster than routing payments through traditional banking routes which could take up to 3 days.

Using block-chain ecosystems as a base, payments are made more secure and less prone to attack compared to a traditional online payment gateway.

Security is a fundamental element that will drive mainstream acceptance of block chain into the online payment industry.

Incorporating block-chain into a traditional payment gateway is not only beneficial to merchants with respect to decentralisation but also for consumers as their confidence in online platforms will be imbued by this core security association with block-chains.

As of now, this ability to make business payments is an option restricted only to a few technology firms. Currently it is the financial service sector that has tapped into the potential of block-chain to change the way it functions.

Ultimately, businesses that want to streamline processes and make payments easy, secure and quicker should look to adopt block-chain technology.

Payment gateways in India are also looking into block-chain technology to further enhance the services they offer to their merchants.

The future of online payments demands adoption of block-chain in all businesses by seeking out payment service providers that will be able to help with access to block-chain.
This would be true for high-impact sectors such as multi currency payments or international settlements where fewer traditional online payment gateways are present.

Unified Payment Interface- The Future of Indian Finance Ecosystem

30th December 2016, the day on which Indian Prime Minister Mr. Narendra Modi launched ‘BHIM’- Bharat Interface for Money. This was a prominent step the nation took in its agenda of becoming a completely cashless economy. BHIM is an app developed by National Payments Corporation of India (NPCI) which is built on the framework of UPI, Unified Payment Interface and it is the game-changer in the financial services sector. The brainchild of NPCI & RBI which is a part of cashless transaction & Digital India Initiative by PM Narendra Modi.UPI has taken the finance industry & nation’s economy by a swift move due to its amazing host of features. Let’s understand more about UPI.

  • UPI- A radical Change:

As mentioned above, UPI stands for Unified Payment Interface which allows users to transfer or receive money between any two bank accounts through a smart-phone. It facilitates direct payment from a bank account to merchants or perform basic banking activities. UPI is the revolutionary model in the payments ecosystem which will very well eliminate the horde of e-wallets we are witnessing & are struggling to thrive in the market. To sum it up in easily understandable terms, UPI is the next big thing in the money market.

  • Why UPI?

In the time which has a slew of e-wallets, payment gateways and online payment options available, why would we even need one more? Well, the answer to that is very simple- UPI is not like any of them. This initiative by National Payments Corporation of India which is powered by RBI & Indian Banks Association eliminates the need of e-wallets, the hassle of entering credit/ debit card details and the pesky passwords. Contrary to the current procedures we follow such as NEFT, IMPS or digital wallets which are still prone to hacking or malfunctioning, UPI transactions are highly secure. Reserve Bank of India has only allowed banks to be the Payment Service Providers of the UPI service, mobile wallets are currently out of the scope now. On the other hand, 30 banks have been included as UPI service providers which also offers interoperability for users who want to use a particular wallet.

  • Stepping into the Cashless Space:

Through the astonishingly robust UPI platform, users will be able to do all the transactions through a single identifier. Indian economy is on a mission to become a completely cashless economy and by the looks of the current scenario, we are still behind the schedule. As compared to other nations in the world, India witnesses 95% of the transactions in volume and 65% in terms of value through cash and UPI is all set to change these statistics.

  • I got mobile Wallet, why use UPI?

A burning question that has been floating around in people’s mind is that what would they do with their mobile wallets? The answer is simple- they are about to be rendered useless. The banking regulators are being hogged by all the mobile wallet providers to let them be the included as service providers, but the board hasn’t relented so far. Mobile wallets like PayTM can still survive up to some extent due to their cash back offers and people would still use them for quick transactions. However, since UPI offers transaction limit of Rs. 1 lakh and that also with ease, security and more bandwidth. So it boils down to the conclusion that unless the wallet companies innovate something new, its going to be a downhill road for them in the finance market. In addition to all that, UPI is free from the pesky money-eaters like Visa & Master Card.

Unified Payment Interface (UPI) is the fulcrum in the process of digitized & cashless India initiative. Considering the massive response it has gotten since its inception, UPI will act as a stepping stone for the economy to become stronger, purer and independent.