Opening a bank account used to be a big favour by Banks during 1990s or earlier. Later part of 90’s changed that when several private banks opened, then they started chasing ‘please open a savings/current account sir’. Consumer got the best deals, small business got best deals and scenario changed big time.

Now switch back your attention to current payment gateway providers in India. They are the old banks of 80’s,90’s. Opening a merchant account is big deal, takes 45 days for approval, several mail communications (thank God they dont ask you to visit personally :p , they know only few top level PG players in market, they take big margin from your business (5% / 6% …) and still behave as if they are doing a favour to you. That dreaded word ‘favour’, which most hates. But we are helpless in front of the almighty payment gateways.

This scenario must change, this is a big market, even if you win 0.1% of market share, you will make more money that you ever would make by trying to be the next Naukri, I mean ‘trying’ not ‘being’. Also note : 1 person applies for a job once in a year or two but 1 person can buy several times in a month itself, so you have more chances to become the next ‘Sanjeev Bikhchandani’ without ever-able-to-copy his ‘Naukri’ 🙂 

If you are building payment gateway, here is what I think you should do:

Engage Startups early: They are your brand ambassadors, engage them, hear their need and let them try early. All the big current PG companies are happy in their cash kingdom, you build your own by engaging this bunch of startup-who-will-wow-spread-words and push you up there.

Innovative Pricing: Why price on each transaction, may be you can do volume pricing? I suggest break that entry barrier for your merchants integrating your gateway.

Be everywhere: Don’t just be online processing, break that pattern. There are several Startups doing cash on delivery, make that part of your payment solution. Do card, mobile, cash, retail…be everywhere. Yes few existing players have card, mobile, while some other has mobile & cash. You need to be all, reduce the pain of merchants.

Go global: India is huge, growing but have your platform ready for expanding to South Asia, Middle east to start with ? Allow Indian Startups to offer solutions to global market.

API, API & API: yes for developers, developers & developers 🙂 

Customer support your mom will love: Yes, do whatever you could but take care of your customers and give yourself a sweet spot vs the BAD customer support that current payment gateway providers have.

Note : I have nothing against current payment gateway providers in India but I am passionate that this market MUST be disrupted, so this is more to motivate wannabe Startups than to criticize current players.

What’s your take?

[Guest article by Santosh Panda, founder of Ayojak. Reproduced from his blog]

[Notes from Ashish: I don’t think that a PG really needs to target startups, as they hardly bring any volume. The market is growing and focus on mid-sized companies is more important. Secondly, “Be everywhere” is a bad way to start off, especially when you are dealing with online+offline businesses in India, which is highly fragmented].

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