Do you know one of the biggest hurdles which holds most vendors back from launching their own eCommerce website in India?
Many of them tell me their biggest problem is that they have no idea how online payment gateways work.
They assume setting up payment gateways involves a lot of technical knowledge and you should have a high volume of sales to get approval.
The reality is that as long as you have set up a proprietorship firm and opened a current account in the name of your company, you can easily integrate payment gateways on your website.
There are no restrictions with regard to the minimum number of sales required per week or month.
The payment gateways on my site worked perfectly even when I made only two sales in the first month after launching my eCommerce site. They are working perfectly today when my sales volume has grown exponentially.
When I launched my site, I found that setting up payment gateways was actually a very straightforward process.
I integrated PayUmoney and Paytm for Business on my WooCommerce site. It is enough to have only these two payment gateways as they enable people to make payments with any of the major wallets such as Paytm, netbanking and credit/debit cards. However they will charge a commission – anywhere from 1.75% to 2.5% on the amount you get from each sale.
Besides both PayUmoney and Paytm are big brands which people in India trust and are extremely easy to set up.
Here is the step-by-step process I followed to integrate payment gateways on my website (you can skip the first two steps if your business is already registered and you have a current account in the name of your firm):
Get Udhyog Aadhaar
If you want to open a proprietorship account, most payment gateways accept Udhyog Aadhar as the proof of business identity.
When I went to the charted accountants, they asked me to pay up to Rs 1,000 for getting an Udhyog Aadhar (UAM number), but I found that I could actually get the UAM number myself completely free of cost.
The union ministry of MSME has set up a website where you just need to fill up a form and generate Udhyog Aadhar number from the comfort of your home within minutes.
Visit this government website to register for UAN: https://udyogaadhaar.gov.in/UA/UAM_Registration.aspx
Be careful when you select the category in which you want to register your business.
Once you have generated UAM number, take a print out of the document mentioning the UAM number. You will also get an email from the ministry of MSME.
Open a current account in the name of your company
Once you have got the UAM number, the next step is to open a current account.
You will likely run into an issue here.
Most banks require you to get an additional document (apart from UAM) – it could be a Shop and Establishment Act document or a GST registration document.
Getting a Shop and Establishment Act document may require you to have a shop with employees (though I have heard that people get their firms name and logo printed on a banner, take a selfie with the banner in the background and use it for getting the Shop and Establishment Act certificate). If your annual turnover is less than Rs 40 lakh, it doesn’t make sense to apply for a GST registration.
So I found a way out.
Some banks allow you to open a current account if you can get a CA letter.
In this letter, a certified charted accountant certifies that you are the proprietor of the firm. The letter mentions the UAM number.
I was able to open a bank IDBI Bank account with these two documents.
Sign up for payment gateways
If you plan to accept payments on your website, it is obvious that you should have a website before you apply for the payment gateways.
The payment gateways will verify your website before allowing you to accept payments online.
I had already built a site on WooCommerce platform.
Since I have an in-house team of designers and developers, it was easier for me to build a website. But you may need to hire a developer or an agency to get your online store up and running.
When I signed up for PayUmoney and Paytm, I was asked to upload the following documents:
- Business Identity certificate (I uploaded the Udhyog Aadhaar registration document).
- Cancelled cheque issued by the bank in the name of your company.
- Identity proof of the proprietor (Your personal Aadhaar Card).
- GST registration number (A non-GST declaration document if your firm is not registered for GST. Most payment gateways including Paytm provide a template for the same that you can take printout of, sign and upload to their website).
- A signed declaration.
Payment gateways take two to five business days to verify your documents. Once they are verified, your bank account will be integrated with these payment gateways.
The payments made by your customers on your eCommerce site will be automatically deposited in your bank account following this integration.
Integrate payment gateways
The payment gateways will provide you with a merchant ID and merchant secret key.
If you are building your website on WooCommerce or any other popular platforms such as Shopify, you can easily integrate the payment gateways.
For WooCommerce, all I needed to do was to upload a couple of plugins and type in the merchant ID, secrete key and other details provided by the payment gateways in the payment settings.
Follow these instructions to get your payment gateway up and running in no time.
You may have to hire a developer if you can’t follow the instructions due to the lack of technical knowledge.
Test the payment gateways
Before going live with payment gateways, I highly recommend that you test whether the payments are being processed properly in a testing environment.
All the payment gateways provide testing credentials including test merchant ID and secrete key.
In fact when I set up Paytm, the company shared the live production merchant ID and secrete key only after I did some test transactions using the test credentials provided by them.
Paytm assigns you a technical supervisor (from their merchant integration team) in case you have any questions about the integration. I found them very responsive and helpful. You can get in touch via email or phone.
So these are the steps I personally followed to set up payment gateways for my online store.
Payment gateways are an extremely important component of any eCommerce website.
The people should be able to make payments without any hassles.
It not only makes it easier for your customers to shop on your site, but also builds trust among them.
If you have questions regarding setting up payment gateways, leave a comment or email me: email@example.com.