Payment Gateway License

Are you an entrepreneur or business owner looking to expand your online presence and accept payments on your website? 

Then you have come to the right place. 

In today's digital age, having a payment gateway license is essential for any business looking to process transactions securely and efficiently. But navigating the complex world of payment gateways can be overwhelming, with various regulations and requirements to consider. That's where our ultimate guide comes in. In this comprehensive resource, we'll walk you through everything you need to know about obtaining a payment gateway license. 

A payment gateway is a financial service that reads payment cards (like debit cards, credit cards, net banking, and payment through your e-wallet, etc.), payment gateways refer to software and servers that transfer transaction information to acquiring banks and responses from issuing banks. A payment gateway performs as an intermediary between the payment receivers and facilitates the transaction via the customer's bank account. Such a facility collects the information from the buyer's bank and supplies this information to the receiving bank.

A Payment Gateway License comprises various benefits, which are as follows-

• Improved Credibility

Having a license makes you more credible in the eyes of the customers, assuring they are in good hands, with their information regulated by a legitimate entity. 

• Enlarges Customer Base

Many customers join hands with businesses consisting of Payment Gateway License since it denotes higher credibility, security, and professionalism.

• Compliance with regulatory compliances

By obtaining a Payment Gateway License, you uphold the commitment to comply with the rules and regulations set by governing authorities, reducing the risks of penalties or any such legal issues.

By fulfilling the requirements and demonstrating your commitment to security and compliance, you can establish trust with your customers and position your business as a reputable player in the online commerce ecosystem.

How Does Payment Gateway Work?

A payment gateway executes a significant role in processing and allows payment or transactions between customers and merchants. A payment gateway encodes sensitive details of payment such as credit/debit cards number. A payment gateway technology shall ensure the information is passed securely between customers and merchants. Below are the basic steps on how it works:

• Step 1:  A buyer will book an order on the website by submitting the order, checkout from the cart, etc.
• Step 2: The merchant initiates the transfer order information to the payment gateway and chooses their preferred payment method. The transaction is then directed to the issuing bank or the 3D secure page to request transaction authentication.
• Step 3:  Once the authentication process is successful, the transaction is then approved or declined (subject to funds available in the customer’s account) by the issuing bank or card (MAESTRO, VISA, MASTER, American Express)
• Step 4:  The payment gateway facility sends a message to the merchant accordingly.
• Step 5:  Post verification bank settles the money to the merchant.

To obtain the payment wallet license, an entity shall be registered under the Companies Act, 1956 or the Companies Act, 2013

• Proof of position of the business
• Detailed business plan along with review model
• A minimum of two members or directors
• PAN and Current Account of the company
• Testing Report by Software certifying agency  describing System Flow and Code
• Compliance with PCI 

PCI Audit and Final Certification Activity

• PCI DSS Scoping & Gap Assessment
• PCI DSS Formal Risk Assessment
• PCI DSS Policy & Procedure Review, Template sharing
• PCI DSS Final Audit & Certification
• PCI DSS Final Certificate Report Attestation & Issuance (ROC, AOC, COC)
• Application Security Testing/VAPT for 2 applications Web, Android & iOS
• Application Secure Code Review for 2 applications Web, Android & iOS
• ASV Scan for up to 5 IPs (Pre-certification)
• Internal VA for up to 10 IPs (Pre-certification)
• External Penetration Test for 5 IPs (Pre-certification)
• Internal Penetration Test for 10 IPs (pre-certification)

Infrastructure Setup

• OS Hardening
• DB Hardening
• Patches Update
• DMZ and Internal Zone
• Centralized Antivirus Server
• NTP Server
• FIM Server
• MFA Server
• VPN Setup
• Firewall Rules

Network Architecture Diagram Documentation

• Firewall Configuration Policy
• DMZ & Internal
• Asset Inventory Detail
• Antivirus Policy
• Patch Management Policy
• Change Control Policy
• DB Access Policy
• Physical Security Policy
• Security Logs and Events Policy
• Backup Policy
• Data Retention and Disposal Policy
• Data Control and Access Control Policy
• Password Policy
• PCI DSS Awareness Training Policy

The documents required for obtaining a Payment Gateway license are stated below. You may have a glance at it- 

• Certificate of Incorporation
• Pan card of all the Directors of the Company
• Digital Signature Certificate of the Directors of the Company
• Address proof of the Registered Address
• Details of the Bank Accounts of the Company
• Your Company's business plan for the next 5 years
• GST Registration Certificate

Security is an essential component of all payment gateways, as sensitive information such as credit/debit card numbers needs to be secured from any fraudulent possibilities. The card associations have formed a set of guidelines and security standards, which must be followed by the payment gateway providers. This set of instructions and security standards is recognized by the name of Payment Card Industry Data Security Standard (PCI-DSS or PCI).

If you are looking to start a business that involves processing online payments, you will require to obtain a payment gateway license. This can be a complex process, but with the right information and guidance, you can navigate the procedure and successfully obtain your license. In this step-by-step guide, we will walk you through the process and provide you with the necessary information to ensure a smooth application process. 

Step 1:- Filling an application Form

The first step calls for the applicants to fill out the Payment Gateway application form via Form A, which has to be submitted to the Chief Manager of the Department of PSS from "The Department of Payment & Settlement Systems.

Step 2:- Registration Fee

You must submit the application form for a prescribed fee in the second step. 

Step 3:- Application Assessment

Once you have submitted the Payment Gateway application form, RBI will begin with the assessment and recheck the mentioned details in the application.  

Step 4:- Application Scrutiny

Once RBI approves the application, they will begin scrutinizing the application based on the following criteria, which are as follows- 

• They employed technical standards in the proposed payment system.
• The implemented security system for conducting electronic transactions via such payment gateway.
• The means of transfer involved in the payment system. 
• Checking the financial stability of the Applicant 
• The incorporated method of allocating payment instructions to the User and whether it impacts payment obligations. 
• The implemented credit & monetary policies 
• The time frame for authorization

Step 5:- Grant of certification 

Once RBI authorizes your application, it will forward you the payment gateway certification for conducting payment gateway business as per Form B. Once it is filled, it would require 6 months of issuance from the authorities as a Payment Gateway Certificate unless issues are discovered in the application.

At Corpseed, we understand the immense value of acquiring a Payment Gateway License and the tremendous impact it can have on your business's success. With our team of highly experienced professionals, we are committed to helping you unlock new levels of achievement and propel your business forward. Obtaining a Payment Gateway License is not just a legal requirement but a strategic move that can revolutionize how you conduct transactions and expand your customer base. By partnering with us, you gain access to expertise and knowledge to ensure a seamless and efficient payment processing system.