Since Paypal wasn’t transacting in Indian currency, the RBI made life difficult for them.
PaisaPay works like PayPal but is still operational and thriving. How are they doing it? [PaisaPay is now wholly owned by Ebay India}
What I am trying to understand is, How is PaisaPay making it work? Anyone here from the payments industry would like to help out.
The reason I want to understand this is because we are setting up a company like BuildABazaar/Ebay which will allow vendors to set up shops and sell their goods. As per what I was told by ICICI and Citibank, they wont process payments for me if I do this (Accept payments on the vendors behalf and then disburse them myself).
I also spoke to 3rd party payment gateways (CCAvenues/PayTM/PayU etc), they said they would require me to register every vendor with them individually ( which is great, but doesn’t work for us because every vendor has to submit documents and get them verified and can start accepting payments after 7-14 days).
PayPal / PaisaPay on the other hand let me set up vendor accounts almost instantly (by verifying using credit-card + Bank Account). In our business model, time to market is very important (I am not saying security isn’t).
The answer could be right in front of my eyes, invisible to me, any Ideas on how I need to look at this differently to figure out a solution?
Praveen Prabhu
Hi there,
Paisapay is wholly owned by eBay & hence it’s like having your own bank to collect your payments. When someone opens a store at eBay, internally eBay will create a merchant account for him/her & also operates an escrow like system wherein the payment is released to the merchant once the customer responds to have received the items shipped.
Why don’t you follow shoppo.in’s model. They also provide individual stores but payment is made to them instead of the respective merchant. Look them up & you could talk to their founder, she should be able to help you out with your bus model.
warm regards,
Praveen Prabhu
Nameet Potnis
Thanks Praveen,
What you are saying does make a lot of sense. The imperative point here is, like you said
Its like having their own bank, but the RBI wont allow that. They are not a bank, so I assume they are backed by a bank, which lets them operate this model. That is where my question lies.
I will check out Shoppo.in. Thank you very much for that resource and your time 🙂
Shobhit Bakliwal
Its shopo.in
Nameet Potnis
Thank You Shobhit 🙂
Sriram
Nameet
PaisaPay uses the Billdesk platform to process payments. Thus, Paisapay acts as a master-merchant and integrates with the Billdesk payment page. Billdesk will process the payments and pay to the escrow bank account at settlement bank of Paisapay, which would in turn pay out to merchants based on Paisapay settlement reports. Since Paisapay is a master-merchant, he accepts the risk on behalf of the merchant. At no time, is the settlement being done to Ebay, the funds are being held in an escrow settlement bank account.
Since you informed ICICI and Citi that you would settle with merchants directly, they would have refused. If you inform them that you would be a merchant aggregator, funds will be in escrow till merchant settlement and you are willing to take the risk on the merchants, they could open up a similar offering for you as well.
Nameet Potnis
Sriram,
Thank you so very much for this. Will do the needful and let all of you’ll here know how it turns out so there can be some shared learning.
Dear Shriram, Thanks again.
Praveen Prabhu
Hi,
Sriram, thx for that.
Nameet, there is one more option. HDFC Bank will allow you to be a merchant aggregator provided you are ready to shell out a considerable amount of money. We did not go for it as we were awaiting a nod from a VC before going for it. If you are interested to know the details do msg me at the rodinhood inbox.
warm regards.
Sriram
Hi Praveen
Are you referring to the fixed deposit to be kept in form of security deposit?? Amount for such a deposit could be negotiable, depending on the options you have for a gateway and their liability book requirements.
Regards
Sriram
Praveen Prabhu
Hi Sriram,
Yes. i was referring to that. Any other bank’s providing this kind of option?