(This article was first published in The Times of India.)

When Kerala saw an unprecedented rise in COVID-19 cases during the early phases of the pandemic, the State’s people started to order food online a lot more. And understandably so, given that eating out wasn’t a safe option anymore.

During this time, a startup that adequately served their needs was Eatiko. In a world where the likes of Swiggy and Zomato are now household names, Eatiko has captured a fair share of the Kerala market as well. They completed 300k+ deliveries in their first year.

And they haven’t looked back. Largely because from the very start, Eatiko focused on customer experience. One of the areas they focused on was delivering glitch-free payments experience. They wanted to integrate with a payment gateway that could ensure higher transaction success rates and give their customers the option to pay via various payment modes.

But of course, the choice wasn’t easy. When startups in India need to pick a payment gateway, they don’t have a plethora of options to choose from. The names that usually come to mind are Razorpay, Paytm Payment Gateway, PayU and Instamojo. But the choice is a critical one because they cannot change a payment gateway too often.

Integrating a payment gateway takes up a good amount of tech bandwidth, which is why the choice should be taken with a long-term view in mind. For early-stage startups, this becomes even more important as they would have limited resources for payment gateway integrations.

Hence, to make the correct payment gateway choice, here are 5 parameters that startup founders and developers should consider.

Easy onboarding and quick integration

This is almost a no-brainer. As a founder, you want a payment gateway that gets you onboarded quickly and allows your tech team to integrate in quick time as well. Most payment gateways like Paytm Payment Gateway, Razorpay, Instamojo and PayU have a smooth, entirely online onboarding process. These payment gateways also provide robust APIs and custom SDKs to get you up and running in no time. On top of that, all of these payment gateways also provide plug-in support for ecommerce platforms such as Shopify, WooCommerce and the likes.

Support for multiple payment modes

Online consumers often drop off at the checkout page because the website or app that they’re shopping on doesn’t support a payment mode of their preference. This is something a startup can ill afford.

You should ensure that the payment gateway you onboard supports all payment modes like credit cards, debit cards, netbanking, EMIs, UPI and more. You would also want payment sources like Paytm Wallet and Paytm PostPaid. While making the choice using this criteria, have a look at the payment methods listed on their websites. For example, PayU and Paytm Payment Gateway have listed Paytm Wallet but Razorpay doesn’t support payments through it.

High transaction success rates

Payment failures are a pain – for buyers as well as sellers. A consumer who faces a payment failure on your website or app is unlikely to come back to you. Of course, payment failures can happen because of myriad reasons on the consumer’s side as well. But what a startup can ensure is integrating a payment gateway that has a high success rate.

Apart from the tech infrastructure, success rates are also driven by factors such as saved instruments. Paytm Payment Gateway, for example, has 250 million+ saved cards, 100 million+ saved bank accounts and 10 million+ saved UPI IDs that aid in higher success rates. PayU talks about features like Quick Payments and Smart Recommendations that enhance success rates. These features ensure that consumers don’t have to fill in their details every time, which means they are less likely to make mistakes. All in all, fewer payment failures for you.

Lower merchant discount rate

Merchant discount rate or MDR is the fee that a business pays to the payment gateway for accepting online payments. These payment gateway charges vary for different payment modes, but lower MDR means higher savings for the startup.

For example, while payment gateways like Razorpay and PayU charge 2% MDR on UPI, Paytm Payment Gateway has lifetime 0% MDR on UPI. For a startup doing monthly sales of Rs 1 crore, this can translate into savings of Rs 97,700 every month.

Quickest payment settlements

Payment settlement time refers to the number of days it takes for the payments you’ve accepted to come into your bank account. For a startup, getting the money your customers have paid into your bank account as soon as possible is very important. This money can be used to grow the business, replenish inventories, pay vendors, disburse salaries, etc.

PayU and Razorpay have a settlement cycle of T+2 working days while Paytm Payment Gateway’s default settlement cycle is T+1 without holidays. These payment gateways also provide quicker settlements at an extra cost.

In conclusion

These are some of the things that a startup founder should consider while choosing a payment gateway. Most reputed payment gateways like Razorpay, Paytm and PayU also have a dedicated customer support team that can help you out during any stage of your onboarding and integration. Also look at the customer testimonials on their website to see the brands that already use these payment gateways. This is another factor that can give you a good indication of which payment gateway to choose.