payment gateway charges

Payment gateway charges has provided all of us a method of conduct financial transactions to electronic medium. As India is fast moving towards a cashless economy, it’s always better to have more active payment gateways.

However, the system of a payment gateway is a complex one. Therefore, only those with the technical acumen to comprehend the payment gateway system acquires the payment gateway license.

Through this article, we are going to cover a small topic of payment gateway charges in India. Our aim through this topic is to make you understand the financial burden one has to bear if they want to start a business as complex – and lucrative – as a payment gateway.

A simple explanation of the payment gateway process

While the answer to how the payment gateway does its job is a complex one, what the payment gateway does is quite easy to explain. Here are the steps present in the payment gateway process.

  1. Encryption of the end user data: When the payment portal asks the customer to pay the payment, the customer responds by entering his debit card details. Taking measures to prevent hackers from peeking the details, the payment gateway encrypts the data. The encrypted data is then sent to the customer’s bank.
  2. Authorization of the customer: Upon receiving the debit or credit card details from the customer, the bank’s systems get into action to authenticate those details. Once the authentication is complete, and it’s verified that the details are correct, next  and final stage of payment gateway initiates.
  3. Finalization of the transaction: The final step of any country running a payment gateway, India or otherwise is the same. Once the details are authenticated, a secure virtual tunnel is created between the customer’s bank account and the vendor’s bank account. The transaction happens through this tunnel which is hidden from anyone trying to funnel the funds away from their intended destination.

If you’re planning on getting the payment gateway registration, remember that your system should be able to meticulously handle the above three steps of the process. If it doesn’t, you won’t be able to acquire payment gateway certificate as the RBI, the one responsible for issuing the permit, doesn’t allow mediocre technologies to exist.

How the process influences the payment gateway charges?

Developing a system that encrypts, decrypts  the details and creates a secure digital pathway for the transaction to take place is a costly endeavour. Which is why, there is a concept of payment gateway charges. It’s to incentivize the technology creators for the secure services that they are providing.

Each and every payment gateway comes with its own scheme of charges. The charges are influenced by the amount of money for which the transaction is taking place. The lower the amount, the lower the risk for the end users and thus, the charges become lower. Similarly, for transactions of higher amounts, the payment gateway charges are higher.

Another factor that influences the payment gateway charges are the types of payment gateway providers

Types of payment gateway providers in India

Within the Indian market, there exist two types of payment gateway providers. Both of these types of service providers cater to both the Indian and international transaction market. Their work depends on the support of the Credit and Debit card market and their type is as follows:

  1. Second party providers: Parties that start from INR 30,000 like ICICI, HDFC and Axis offer low transaction rates. But, the trade-off is that their offered transaction discount rates are low as well. Second party providers don’t ask for too much payment gateway charges because they mostly consist of banks and other entities that have already established themselves at the top of their domains.
  2. Third Party Providers: Third party service provider cost around service tax and 2 or 4 percent transaction discount rates. They charge annual fee and are quite prominent in utility payment portals.

Payment gateway charges in India are never high. However, considering that there is a requirement for everyone who has gone through the payment gateway process to increase his or her net worth by INR 10 Crores by three financial years, it’s important to keep in mind the need of expanding the business as quickly as possible.

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The process of getting payment gateway registration certificate

All the talk of payment gateway charges comes after you’ve established your operational payment gateway. The element that’s crucial to making a payment gateway operational is the payment gateway license.

The process to get payment gateway license or payment gateway registration in India involves the following steps:

  1. First, you need to accumulate the documents. Also, remember that the list of requirements is a long one.
  2. Then, you’d need to pay the payment gateway registration fees along with the application for it to the RBI.
  3. RBI will assess whether the technology of your payment gateway is compliant to RBI’s rules.
  4. If everything is found in order, the payment gateway license would be issued.


If you want to find out about the documents required for payment gateway other than the reciept of payment gateway registration cost, you can look for at our portal. Anyway, in case you’ve yet to realize, the payment gateway charges in India are conditional.

They depend upon the type of service provider you are and the technology that you have implemented in the electronic transaction system. So, keep in mind of them when you decide to obtain the payment gateway registration.


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