Legal ways for accepting payments in India.

For registered companies (not individuals)

[yash_g]

Hello everybody,

I have recently started my own software company and have registered a private limited company. I was wondering what would be a legal way of accepting payments in India? Perviously I used to work as a freelancer and I have tried all PayPal, Cash2india, Remit2india etc. But I guess they won't be useful and LEGAL for a company.

So I would like to know what is the legal and most cost effective way of receiving payments for a company in India. Do I have to register with RBI for import/export license? Do I have to register with STPI? I would really appreciate if some one could share some ideas.

[Manish Singh]

Hi,

>>Do I have to register with RBI for import/export license?

Yes

>> Do I have to register with STPI?
Its recommended though optional.

Legal ways could be

1. Wire Transfer
2. Paypal
3. cc Merchant account. Direct or third party.

[Manish Singh]

Just a note, for the IE code, you have to apply to the Directorate of Foreign Trade and not RBI.

[yash_g]

Hello Manish,

Thank you very much for replying and the update. One more question.. What is cc Merchant account? Do I have to open an account with some payment gateway like Transecute or ccAvenue? And what is direct/third party cc Merchant account?

Thanks for all the help. :)

[Manish Singh]

Hi Yash,

Depending on your business model and the monthly sales you may either go for a direct merchant account or a third party merchant account.

ccAvenue (INR processing), 2checkout (USD processing), etc are third party merchant accounts. They generally charge 5-7% of the transaction amount as processing fee. The merchant account essentially belongs to these third parties and they act as a reseller of your goods and services.

With INR processing merchant accounts all charges are converted to INR before your customer's card is charged. This type of account is good if you are primarily targetting Indian customer base.

With USD processing merchant accounts all charges are converted to USD or support currencies (like Euro, GBP, AUS$ etc) before placing a charge on the customer's card. Preferred for US/European clients base.

You may also acquire a direct merchant account from your bank. In India CitiBank, ICIC Bank, HDFC and many others have this facility. However it involves a lot of startup cost atleast in India. The transaction processing fee is between 2-3%.

Paypal cheques are also legal since they pay in INR. Just make sure your paypal account is a Business account.