Frequently Asked Questions
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Payment Gateway App for Freelancers: How to Choose the Right One?
The right payment gateway app is the one that makes receiving payments from your clients a hassle-free process.
Synopsis
- Payment gateways help freelancers accept payments from local and international clients.
- When choosing a payment gateway, the key factors to consider include supported currencies, transaction fees, exchange rates, security and settlement timelines.
- Freelancers also ought to consider payment gateway fees and charges, including transaction, international payment, currency conversion, refund and chargeback charges.
Overview
For freelancers who need to manage payments from multiple clients, across different channels and locations, payment gateways can be an efficient way. Payment gateways can streamline payment collection by enabling secure and convenient digital payments. Here’s what freelancers need to know about receiving payments in India.
What is a Payment Gateway and How Does it Work?
A payment gateway is a technology that enables individuals/entities to accept digital payments from customers. It securely captures payment details, encrypts the transaction information and communicates with the relevant bank or payment network to process the payment.
In India, payment gateways can be standalone financial entities or e-commerce services offers by financial entities. They operate under the Reserve Bank of India’s (RBI) Payment Aggregator (PA) framework.
Here’s an overview on how it works:
- Step 1: Customer initiates payment and selects a preferred payment method, viz., Debit Card, Credit Card, UPI, NetBanking, eligible digital wallets, etc., on the payment page.
- Step 2: The payment gateway encrypts the transaction to protect sensitive data.
- Step 3: The gateway sends the encrypted data to relevant payment processors like banks or card networks for authorisation.
- Step 4: The bank or card network checks the transaction details and confirms if payment can be authorised.
- Step 5: The payment gateway communicates the status of the transaction, whether approved or declined, back to the customer and receiver.
- Step 6: For successful transaction, funds will be processed and settled into the receiver’s bank account.
How to Find the Right Payment Gateway?
As a freelancer, you ought to consider a multitude of features when choosing a payment gateway.
The right choice can depend on the nature and volume of transactions, customer preferences and whether you receive payments domestically or internationally.
- Payment Methods Supported
A payment gateway should support the payment methods your customers are most likely to use. These may include UPI, Credit and Debit Cards, NetBanking, digital wallets, etc.
If you serve clients across different locations, having multiple payment options can make it easier for your clients to complete transactions conveniently.
Features like EMI conversion may also be worth looking into.
- Transaction Fees and Other Charges
Payment gateways may charge fees for processing transactions. Before choosing one, understand:
- Transaction or processing fees
- Applicable taxes
- Charges for refunds or failed transactions, if any
- International transaction or currency-conversion charges, where applicable
- Any setup, subscription or maintenance fees
Ensure you assess the total cost of accepting payments.
- Security and Compliance
Payment transactions involve sensitive financial information, which makes security an important consideration. Check the gateway's security measures, encryption practices and applicable regulatory or industry compliance standards. Features such as secure authentication and fraud-monitoring mechanisms can also help protect transactions.
- Settlement Timelines
This is probably one of the most important factors when choosing a payment gateway. This is because the time taken to receive funds can directly affect your cash flow. Check:
- The standard settlement cycle
- Whether settlement timelines vary by payment method
- How weekends and bank holidays affect settlements
- Whether international payments have different timelines
Also, knowing when the funds will reach your bank account can be helpful with financial planning.
- Ease of Integration
If you have a website, app, online store or invoicing system, you must consider how easily the payment gateway can be integrated. Consider the available APIs, plugins, payment links and other integration options based on your technical requirements.
If you do not have a website, you may also want to check whether the gateway offers payment links.
- Payment Experience for Customers
The payment process should be straightforward for the customer. Consider factors such as:
- Ease of navigation
- Mobile compatibility
- Number of steps required to complete a payment
- Available payment options
- Support for different currencies, where relevant
- Payment confirmation and receipts
A smoother payment experience can reduce friction when your clients are making payments.
- Payment Tracking and Reconciliation
If you have multiple clients and projects, it can be cumbersome to keep track of all the incoming payments. To manage multiple payments seamlessly, check for features like:
- Transaction dashboards
- Payment status tracking
- Automated notifications
- Downloadable reports
- Refund tracking
- Reconciliation tools
These features help to match payments with invoices and maintain financial records.
- Refunds and Failed Transactions
Not every transaction from your customer will be successful. Before choosing a gateway, you need to understand how it handles:
- Failed payments
- Payment reversals
- Refunds
- Duplicate transactions
- Disputes or chargebacks
When the processes are clear, it can be easier for you to resolve payment issues when they arise.
- International Payment Support
If you work with overseas clients, you may need your payment gateway to provide additional functionality. When it comes to international payments, the gateway should support the relevant currencies and international payment methods. Also, ensure you understand applicable fees, foreign-exchange charges, settlement timelines and documentation requirements.
A noteworthy feature to look out for is auto-FIRC generation. FIRC stands for Foreign Inward Remittance Certificate; this document proves that you have received a payment from overseas in a foreign currency. FIRC acts as legal proof when filing taxes and claiming GST.
- Customer Support
Payment issues can affect both your cash flow and your relationship with clients. Consider the support channels available, such as email, phone or chat, and whether support is available during the hours you need it.
Also read: How to Receive International Payments in India
How Domestic Payments Differ From International Ones
When working with domestic clients, receiving and settling payments is relatively simpler and quicker.
Receiving international payments typically come with additional considerations like foreign exchange rates, transaction charges and not so quick settlement timelines.
| Factor | Domestic Payments | International Payments |
|---|---|---|
| Currency | Usually processed in Indian Rupees (INR) | May involve foreign currencies and conversion into INR |
| Payment methods | UPI, cards, NetBanking and other domestic options | Cards, international payment methods and bank transfers, depending on the gateway |
| Currency conversion | Not required | May involve foreign exchange conversion |
| Charges | Domestic transaction fees may apply | May include additional international transaction or currency-conversion charges |
| Settlement | Typically follows domestic settlement cycles | May have different settlement timelines |
Payment Gateway Fees and Charges to Watch Out For
Payment gateway charges can affect the amount you ultimately received from your client. The total cost may depend on the payment method, whether the transaction is domestic or international, currency conversion, etc. Before choosing a payment gateway, you should understand the following charges:
| Type of Charge | Details | What Freelancers Should Check |
|---|---|---|
| Transaction fee | A fee charged for processing a payment through the gateway. | Check whether the fee is a fixed amount, a percentage of the transaction value, or both. |
| International payment fee | An additional charge that may apply when receiving payments from clients outside India. | Check the applicable rate for international transactions and whether it differs by payment method or country. |
| Currency conversion charge | A charge that may apply when a payment received in a foreign currency is converted into Indian Rupees. | Check the applicable exchange rate and whether a separate conversion fee or markup is charged. |
| Refund fee | A charge that may apply when a payment is refunded to the client. | Review the provider's refund policy and whether the original transaction fee is refundable. |
| Chargeback fee | A fee that may be charged when a client disputes a card transaction and the payment is reversed. | Understand the chargeback process and any applicable dispute-handling fee. |
| Settlement charges | Charges that may apply to transferring the collected funds to your bank account, depending on the provider and arrangement. | Check the settlement schedule and whether any additional charges apply. |
| Taxes on applicable fees | GST or other applicable taxes may be levied on eligible gateway fees and services. | Check whether taxes are included in the quoted fee or charged separately. |
*Note: The actual charges can vary based on the payment gateway, payment method, transaction type and applicable terms. It is important to review the payment gateway provider's current pricing and terms before accepting payments.
Simplify Your Payments with GIGA by HDFC Bank
As a freelancer, managing payments is an important part of running your business. With a GIGA Account, you can access a range of payment solutions designed to help accept, receive and manage payments.
- Payoneer: Receive payments from 100+ international marketplaces and clients and access preferential currency conversion rates.
- SmartHub Vyapar: Accept domestic payments through cards, Tap N Pay, UPI, SMS Pay and QR codes. Record, track and collect customer dues.
- Razorpay, Domestic Collections: Create payment links to collect payments from customers, while managing real-time payment insights through a single dashboard.
- PayPal: Receive international payments and send personalised payment links and payment requests.
Open a GIGA Savings Account and explore payment solutions designed for your varied freelancing needs.
*Disclaimer: Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.
The best payment app for you depends on your requirements, such as domestic or international payments, supported currencies, transaction fees, settlement time and ease of use. It is important to compare these factors and more before choosing an app for your freelance business.
As a freelancer, you should consider currencies supported, exchange rates, transaction and conversion fees, settlement timelines, payment methods, security features and compliance requirements, especially for international payments.
Freelancers may encounter charges such as, transaction fees, currency conversion charges, international payment fees, withdrawal or settlement charges and applicable taxes. However, the exact charges can vary across payment gateway providers, transaction type, payment method and currency.
If you’re self-employed, a dedicated account for business or freelance income and expenses can make financial record-keeping easier. That said, having a separate account is not required.
Settlement times can vary across payment method, payment provider, transaction type and whether the payment is domestic or international. Domestic payments may settle faster, while international transactions can take longer due to currency conversion and compliance checks.
Certain payment gateway services may support both domestic and international payments. You can check the payment gateway’s features.
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