Understanding Payment Gateway Fees: What You Need to Know

Letspe Payment Gateway takes the minimum fees for payment gateway services. In this article we have covered all about the Payment Gateway Fees, the entities included in the process of online transaction and much more related information.

Payment Gateway Charges

Payment gateways generally charge fees for what they offer, which could include setup fee, transaction fee (a proportion of the transaction value), and monthly or yearly subscription cost. Payment gateways accept credit cards, debit cards, prepaid cards, bank transfers, e-wallets, cash, mobile payments, and other payment methods. Merchants should research choices to obtain the most affordable solution because the charge structures for payment gateway providers vary.

Free Payment Gateways in India 2023

If any Payment Gateway organization says that online payment transactions are free, it is absolutely incorrect.

Why Is Online Payment Processing  Never Truly Free?

It is not possible to accept online payments without paying additional fees. A simple online payment process includes many elements such as:  

• Payment Service Provider 
• Credit Card Companies
• Processing Network

Understanding Payment Gateway Fees for your Business

Before choosing a service provider, it's important to understand all associated payment gateway fees because they have an immediate impact on your company's profits. The following are some important factors worth keeping in mind:

Type of Transactions expected to be made or completed on your website or app.The consistency of different transactions. Revenue that the company has already generated or plans to generate. In addition to these criteria, you should consider the number of supported payment sources, payment security, success rate, and other extra features offered by the online payment gateway. Remember, before making a choice, one should consider the full range of options available, not just the costs associated with a payment processing gateway. 

Important Factors Affecting Online Payment Fees

Several important variables that affect the charges of online payments include:

Interchange Rates

Every time you make an online payment from your bank, issuing corporations like VISA or MasterCard will charge you exchange rates for credit card payments. This rate takes into account the bank's expenses for processing online payments as well as the efforts made to cut down on fraudulent transactions. 

Merchant Charges

If you wish to take credit card payments on your website or app, merchant fees must be paid. It is the payment cost charged for connecting your merchant account to the credit card network. You can accept credit card payments made online thanks to the merchant account. Contrarily, the merchant account provider automatically transfers funds from credit card payments made through your website or app into your account on a regular basis.  

Payment Safety

Depending on the level of security required for each payment and its mode, payment safety fees are assessed. As a result, the cost of a payment gateway is directly related to the level of security and the type of transaction.Entities involved in Online Payment Transaction

The following entities are involved in an online payment transaction:

• Merchants
• Customers
• Issuing Bank
• Acquiring Bank

Costs involved in Payment Gateway Process Service You're probably aware that payment gateways offer a wide range of services. They endure numerous costs, such as:

Costs of onboarding merchants.

• IT infrastructure costs.
• Costs of software creation and maintenance.
• Management and other operational costs.

Various Online Payment Alternatives in India 2023

There are a lot of alternatives, and the number of choices keeps increasing. Each has a different set of expenses and fees.

Debit and Credit Cards

Example - Visa, Mastercard.

The Card Issuer charges some fees from the Merchant.

Due to the decreased level of risk (Fund Confirmed, Transferred Quickly) associated with the transaction, Debit Cards have significantly lower costs. When using a Credit Card, there is a chance that the user won't have enough funds available (when the credit card bill is due later). Due to this, credit cards have higher fees.

ACH (Automated Clearing House) Transfers

Compared to credit or debit card issuers, these costs are typically substantially lower. The customer must submit their financial information (account and routing numbers) if they want to pay in this method. The ACH network is also used to process eCheck. To withdraw one, the business must first obtain approval from the client and then send the eCheck to a payment processor.

Digital & Mobile Wallets

Customers may store their payment information and make transactions with just one click thanks to digital wallets like PayPal, Apple Pay, Google Pay, and others. Mobile apps (payments straight from phone) facility is also available.

Payment Gateway Charges Explained

Payment gateway fees are made up of the following components:

1. Installation (Setup) Fees

A one-time setup fee is charged by several payment gateway providers. Document verification, KYC, infrastructure fees are covered in this onboarding.

2. Maintenance Fees on an Annual Basis

An yearly maintenance fee is charged by many payment gateway providers. It includes expenses such as operations, infrastructure maintenance, software maintenance, customer support, upgrades. 

3. Fees for Integration

Several payment gateway providers charge an integration fee for integrating the payment gateway with a merchant's website or app. 

4. Transaction Discount Rate (TDR) 

For every transaction, payment gateway services charge a proportion of the transaction's amount. TDR is made up of the following components: Charges at the bank (acquiring) for providing card payment services. Processing fees collected by card networks and digital payment wallet providers.

Best Payment Gateway in India 2023

LetsPe is the top payment gateway service provider in India which is currently operating from Gurgaon, Haryana. 

This firm has unique benefits like:

• Minimum service Charges
• Multiple Payment Options
• Minimum Onboarding Time
• Integration with Ecommerce
• Instant Settlement 

Conclusion

Understanding Payment Gateway Fees is made easy with this above given article. Go through the complete article to understand the Payment Gateway Charges and fees Structure. Bookmark our site to know more about online payment gateways service.