I had a good friend who was deploring the state of payment gateways in India. As someone that has dealt with Times of Money (DirecPay), EBS, CCAvenue, HDFC Bank, ICICI, Citibank and Axis Bank, I can attest to that pain. Its amazing that the state of payment processing is so arcane and filled with issues.
The issue is not just one of payments BTW. I constantly hear people complain about lack of a very good “X” in India. X could be a angel investors, incubators, bloggers, engineers, <fill-the-blanks>.
Problem is most people actually underestimate the effort required to build quality and consistency. What you see in the payment gateway is a simple set of forms that accept a number, check if its valid, authorize it and return an accept / reject status message.
The “behind the scenes” is painful. The multiple layers of the onion that you have to peel are the ones that really are painful. So most superficial jingoism that starts at the front-end of the startup fades when the real pains come to the front. Which happens in the first few months.
Which is the main reason most startups fail within the first year.