While the Covid-19 pandemic has altered our lives in more ways than one, it has also significantly impacted the e-commerce industry. With people buying everything from groceries to medicines on the web, online services are now more popular than ever.
But even today, the most important part of online purchasing is a quick and seamless payment experience. And even though some people still prefer using debit cards, credit cards, and net banking, a UPI payment gateway is a must for merchants. This is because UPI payments are instant and secure, and come without the hassle of sharing one’s personal details.
Additionally, over one crore UPI payments are made in India every day, making the UPI payment gateway essential for businesses offering online services. So, let’s take an in-depth look at how UPI payment gateways work and their benefits.
How Does a UPI Payment Gateway Work?
A UPI payment gateway is simply a service provider that enables secure fund transfers between a merchant and customer through Unified Payments Interface (UPI). In other words, it acts as a middleman for bank-to-bank transactions.
For example, let’s say a customer places an online order on your website and chooses to pay the bill through a UPI application like PhonePe, Paytm, BHIM, or Google Pay. By integrating your site with a UPI payment gateway, you will receive the amount directly in your registered bank account.
It’s quick, easy, and simple. Plus, a UPI payment gateway can be integrated for all online services, including bill payment & recharge portals, shopping apps, home businesses, and more.
We will now take a detailed look at the steps involved in the process:
- A customer visits your online service portal (website or application) to make a purchase.
- When provided with the payment options, the customer selects a UPI platform of their choice.
- The UPI payment gateway then sends a collect request to the customer’s Virtual Payment Address (VPA).
- Next, the selected UPI app sends the customer a notification to complete the payment.
- The customer clicks on the notification, checks the amount, and makes the payment, which is then transferred to your registered bank account.
The Benefits of a UPI Payment Gateway
Now that you know how a UPI payment gateway works, it is crucial to understand the benefits that it offers, which are:
- Payments are Credited in Real-Time
One of the foremost advantages of opting for a UPI payment gateway is that the payments made by customers are credited to your account in real-time. This helps businesses and merchants keep tabs on all transactions and manage their finances.
- A Minimal Transaction Fee
Although UPI payments are completely free for customers, merchants are required to pay a minimal transaction fee, which typically ranges between 2% to 4%. It is lower compared to other payment methods, however, it can vary from one UPI payment gateway to another.
- Suitable for Small Transactions
Another key benefit of a UPI payment gateway is that it is suitable for small transactions. If a customer wants to spend an amount as low as Rs. 50 or Rs. 500, UPI is a great way for customers to complete the payment without having to feed in their bank details.
- It is Secure and Private
Today, UPI payment gateways are one of the most secure and safest ways to complete digital transactions as they only rely on UPI IDs or VPA. Plus, they are not only end-to-end encrypted but also require two-factor authentication, making UPI payments secure & private for both customers and merchants.
Choose Razorpay as Your UPI Payment Gateway
If you wish to reap all the benefits of integrating a UPI payment gateway for your business, choosing the right one is crucial. Razorpay offers 100+ payment methods, hassle-free integration, a superior checkout experience, an industry-leading success rate, and instant settlements starting on day one.
Explore the Razorpay website to know more!
Also Read: iPayTotal: Revolutionising The Digital Payments Landscape
