CCAvenue, PayTM or ZaakPay? The Best Payment Gateway for Your Online India Business

The number of payment gateways available in India, in the past year or so, have exploded to almost match the number of Indian marketplaces. Competition is great, but a merchant now has so much choice that it has become very difficult to decide upon the ‘Best’ payment gateway for their business.

The Options

There are now around 9 choices for your online business, among, we’re sure, many more that are up and coming and haven’t yet made the headlines. CCAvenue, the incumbent, claims to own around 85% of the market, or 15k online merchants. We’re fairly sure that this number has already been eroded by the up and coming gateways such as PayTM, PayU and the newly released (as of July) PayZippy from FlipKart. We also have a feeling that the introduction of Dhamaal from the Avenue group might in turn impact upon the number of CCAvenue marketplace integrations. But, the incumbent (like PayPal in the rest of the world) will be familiar with customers, and cannot be easily dismissed as an option. The other possibilities out there at the moment are ZaakPay, DirecPay, EBS, Citrus, and PayUPaisa.

The Cost

For a small company, perhaps setting out with an unknown sales volume, it might be better to look at one of the gateways that allow a free setup cost. This will result in a larger transaction percentage taken by the gateway, but for the short term will be a safer option. These include CCAvenue and PayZippy; the latter also dispenses with the ‘Annual Maintenance’ fee (AMC). But will these options allow you to scale cheaply?

In the case of PayZippy, AMC remains 0 all the way through to Rs 1Cr+ monthly transaction amount, with competitive transaction fees of 3.5-2.5%. The downside is that it’s a new solution and does not currently support a number of options, such as NetBanking (to be released in September). On the other hand, CCAvenue ratchets up the setup fee costs quickly to Rs 25,000 for a larger plan, with more expensive transaction fees. It currently appears to be that PayZippy is the cheapest option, followed by DirecPay, PayU, EBS and CCAvenue, in that order. ZaakPay also has a good rate of 3% (cheaper than Zippy’s 3.5%), however that has to be balanced against the Rs 500 monthly subscription. PayTM is charging around 3% TDR, with a setup fee of Rs 15,000 and an annual maintenance charge of Rs 3,000, puts it on a similar scale to ZaakPay.

Take a look at NextBigWhat’s pricing comparison for more detailed information on DirecPay, PayU, EBS and CCAvenue. We also wonder at IOS whether the introductory rates at PayZippy will remain so competitive as features are added.

The ‘Best’ Service

Cost isn’t everything when it comes to choosing an online payment provider. There are a number of other metrics to look out for;

1. Transaction success rate: That is, how many transactions (once started) are successfully completed – this can be as low as 75%, so remember a 95% completion rate will essentially result in 20% more business.
2. Consumption: Can a payment be processed easily on mobile and web devices? With the rise of the mobile in India, this should be a requirement.
3. Supported payment methods: If your customer doesn’t have a credit card (fairly common), they should be able to pay through their bank.
4. Service: If you have a problem, will your gateway help you out, and how quickly? PayPal (the incumbent) is notorious for not really caring, banks are typically fairly poor, so find a company small enough to be responsive, but not too small that they could fall over at any time.
5. Integrations: If you’re starting your shop on Shopify, they have a PayU integration. Zepo support PayTM. Magento have CCAvenue. Just make sure that the one you want is on the cart you’re after.

The Trend

It’s interesting to see here that PayTM has by far eclipsed any of its competitors in terms of search; this is not necessarily indicative of the number of transactions being performed, but at least indicates the level of interest in the service. ZaakPay and other services had too few comparitive searches to be shown on the graph. Mind you, PayTM is also a consumer offering for other services like charging mobile phones and D2H so that could be the reason for its popularity.

Get off the fence!

Ok, so who do we like the look of? PayTM looks good, and seems to like developers. ZaakPay also seems to be a contender from this perspective. From the price point, a one off cost is generally not too painful, however with some of the gateways the recurring fees and the transaction charges should be carefully weighed up.

Any horror stories? Let us know.