Merchant Accounts & Payment Declines in India: How Global Businesses Can Solve It with Transact Bridge
Published on: Wed 05-Mar-2025 01:52 PM
For global businesses and high-risk merchants, accepting payments in India can be a frustrating challenge. Due to stringent Reserve Bank of India (RBI) guidelines, many international credit and debit card transactions declined, causing major revenue losses. This issue affects businesses across industries, from SaaS providers to e-commerce stores, subscription-based services, and digital content platforms.
The good news? There’s a reliable alternative: Unified Payments Interface (UPI). This local payment method is widely accepted and can significantly reduce payment declines for global businesses operating in India.
In this article, we’ll explore merchant accounts, why payment failures happen in India, how to choose the right merchant service provider like Transact Bridge, and how UPI provides an efficient solution.
What is a Merchant?
A merchant is any individual or business that sells goods or services in exchange for payment. Merchants can operate in physical stores, online marketplaces, or both. They rely on various payment methods, including cash, credit/debit cards, bank transfers, and digital wallets, to process transactions.
Types of Merchants
- Retail Merchants – Operate brick-and-mortar stores or online e-commerce businesses.
- Service-Based Merchants – Offer services such as consulting, software, and professional services.
- High-Risk Merchants – Businesses in industries like gaming, forex trading, adult content, and cryptocurrency that face higher chargebacks and payment fraud risks.
What is a Merchant Account?
A merchant account is a specialized bank account that allows businesses to accept payments via credit and debit cards. It acts as an intermediary between the customer’s payment and the business’s primary bank account. Without a merchant account, businesses would struggle to process card transactions securely.
How Does a Merchant Account Work?
- Customer Makes a Purchase – The customer enters their payment details online or swipes their card at a POS system.
- Transaction Processing – The payment request is sent to the merchant account provider, which verifies the card details.
- Authorization & Settlement – If approved, funds are transferred to the merchant account and later settled into the business's bank account.
Do I Need a Merchant Account?
If your business accepts or plans to accept online payments via credit or debit cards, you need a merchant account. This applies to:
E-commerce businesses
Subscription-based services
High-risk merchants (gaming, forex, adult content, etc.)
SaaS companies
International businesses selling in India
For businesses targeting India, integrating local payment methods like UPI alongside traditional merchant accounts is crucial to reducing transaction declines.
What Are Merchant Account Providers?
Merchant account providers (also called merchant acquirers) are financial institutions or payment processors that offer businesses the ability to accept payments. These providers connect businesses with payment networks like Visa, Mastercard, American Express, and local banking solutions.
Top Global Merchant Account Providers
Stripe – Popular for online businesses and subscription-based models.
PayPal – Widely used for global transactions and easy integrations.
Authorize.Net – A reliable solution for small and medium-sized businesses.
Adyen – Preferred by enterprise businesses for multi-currency support.
Transact Bridge – Ideal for international merchants targeting India, with UPI support.
What is a Merchant Services Provider?
A merchant services provider (MSP) is a company that offers payment processing solutions beyond just merchant accounts. These services may include:
Point-of-Sale (POS) systems – For physical store transactions.
Payment Gateways – Online payment processing solutions.
Fraud Prevention & Chargeback Management – Protecting businesses from fraudulent transactions.
Multi-Currency Support – Allowing international businesses to accept different currencies.
Which Fees Are Associated with Merchant Accounts?
Merchant accounts come with various fees, depending on the provider and transaction type. Common fees include:
- Transaction Fees – A percentage of each sale (typically 2-4%).
- Monthly Maintenance Fees – Charged for account management.
- Chargeback Fees – If a customer disputes a transaction.
- Cross-Border Fees – Extra charges for international payments.
- Early Termination Fees – Charged for canceling an account before the contract ends.
How Do I Choose a Merchant Service Provider?
When selecting a merchant service provider, consider the following:
Transaction Success Rate – Ensure high approval rates for transactions.
Fees & Pricing – Compare transaction fees, hidden charges, and monthly costs.
Security & Compliance – PCI DSS compliance and fraud protection.
Support for Local Payment Methods – If targeting India, look for UPI, Net Banking, and RuPay card support.
Customer Support & Reliability – 24/7 assistance for technical issues.
Why Payment Declines Happen in India
1. RBI Regulations on Credit/Debit Card Transactions
The RBI has implemented strict guidelines to enhance security and prevent fraud. This includes:
Mandatory Two-Factor Authentication (2FA)
Card Tokenization Requirements
Cross-Border Payment Restrictions
2. High Decline Rates for International Transactions
Many global businesses report high failure rates (up to 40%) for international card transactions in India. This is because Indian banks often block foreign transactions due to perceived fraud risks.
3. Chargebacks and Fraud Concerns
High-risk businesses, especially those in sectors like gaming or digital goods, often face excessive chargebacks. Banks may blacklist such businesses, making it harder to get a reliable merchant account.
The Solution: Indian Local Payment Methods (UPI)
What is UPI?
Unified Payments Interface (UPI) is India’s most widely used digital payment system. It allows instant bank-to-bank transfers and supports QR codes, mobile apps, and online payments.
Why UPI is the Best Solution for Global Merchants
99% Transaction Success Rate – Compared to card payments, UPI has a significantly lower failure rate.
No Chargebacks – Unlike credit cards, UPI transactions are irreversible, reducing fraud risks.
Easy Integration with Transact Bridge – Transact Bridge helps international merchants integrate UPI seamlessly.
Lower Processing Fees – UPI costs less compared to traditional merchant accounts.
How to Get Started with Transact Bridge via UPI
- Sign up on Transact Bridge – Create an account and provide basic business details.
- API Integration – Integrate UPI into your website or mobile app.
- Start Accepting Payments – Enable seamless transactions with UPI and boost conversion rates.
Conclusion & Call-to-Action
For global merchants struggling with payment declines in India, relying on credit and debit cards is no longer a sustainable option. Understanding merchant accounts and choosing the right service provider is essential for business success.
Transact Bridge Merchant of Record Solution emerges as a comprehensive answer to the challenges of digital payments, offering a seamless and compliant transaction experience for global businesses. By integrating multiple payment methods, including UPI, Transact Bridge ensures smooth cross-border payment solutions while addressing crucial concerns such as taxation and regulatory compliance. As businesses navigate the complexities of global payments, solutions like Transact Bridge pave the way for a more efficient and transparent digital economy.
Ready to enable seamless payments in India? Contact Transact Bridge today and start accepting UPI payments hassle-free!
