Businesses with a payment gateway can offer several payment options to their customers on the checkout page. They can gather payments across platforms. A payment gateway provider associates with banks, card networks, including Visa and various payment service providers, to enable online payment collection. The important point is that payment gateway service providers incur charges.
Payment gateway charges comprise of several charges, including charges for setup, TDR, and more. Next, we will discuss the standard payment gateway charges separately.
Setup Fee
It’s a one-time fee paid by businesses for integrating a payment gateway in their website/application. It’s a non-recurring fee. The fee covers expenditures on
· Getting a business on board
· Infrastructure cost (For every net banking option enabled, a payment gateway service provider must share merchant particulars with the concerned bank. Next, the bank activates the account. The bank could charge an amount for this)
Annual/Monthly Maintenance Charges
Businesses could have to shell out a fixed monthly/yearly fee to a payment gateway provider for maintenance. These charges cover operating expenditures, technology up-gradation, and software maintenance costs).
This annual/monthly fee varies based on some factors. They are:
· Payment modes activated
· Sorts of integration (Businesses that have web checkout will incur lower maintenance charges. Charges are likely to be high when businesses do radical integrations, an example being seamless integration)
· What payment gateway features are opted for (auto-billing service and integrated refund management are likely to be additional features)
Some providers of Payment Gateway Services also offer various risk and fraud prevention and management services. Businesses that wish to avail of these could have to pay extra.
TDR
True to the name, this charge is based on all transactions that a business processes via the payment gateway. The rate varies based on what payment mode the customer uses. The TDR is going to be low for a customer paying via net banking. It is going to be higher for payments made with international credit cards.
With a good number of payment gateways, the TDR decreases with a growth in sales.
Now, a payment gateway service provider doesn’t get the entire TDR. These fees are divided between several parties in a transaction. We will see how a 2% charge is divided.
· The issuing bank gets 1.25% for card payments
· Card networks including Visa and other intermediaries get 0.15%
· The acquiring bank gets 0.25%
· The Payment switch provider gets 0.10%
· The payment gateway provider that gets the business onboard gets 0.25%
Businesses keen on offering customers various domestic and worldwide payment options can pick from several online payment gateway providers in India. Their payment experts will understand a business requirement and propose the best blend of features for the business.
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