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E-Commerce website Snapdeal is planning to launch a payment gateway in the next couple of months, a few months after its competitor Flipkart launched Payzippy reports Economic Times.

Snapdeal will be able to gather information such as credit card details, billing address among others from the customer, which can be analysed further to improve its services. The company told the publication that it has about 20,000 sellers transacting on its payment_gateways_snapdealmarketplace offering about 500 product categories. The company says that it wanted to reduce the number of Indians using cash on delivery for payments by setting up such a gateway that will work reliably. PayU had released a feature that will release funds only on delivery last month which could help eCommerce companies such as Snapdeal.

The decision comes amidst talks of eBay (which already has a payment gateway in PayPal) planning to acquire Snapdeal. The companies have been working closely and have started cross promoting their products already as part of first stage of partnership following eBay’s investment in Snapdeal.

If Snapdeal opens up the gateway for third parties, it needs to be seen how the company will make it standout in a crowded market with players such as Paytm paymentsPayUCCAvenue*, BilldeskEBS, apart from Payzilla and other. Is it going to offer lower rates than existing players or play the reliability angle, we don’t have an answer yet. Then again, why not use PayPal now that the two companies are working on integrating services instead of creating a completely new gateway? RBI had first placed stringent restrictions on PayPal, and then increased the transaction value limit to $3000 per transaction in October 2011 and $10,000 per transaction earlier this year.

*Disclosure: CCAvenue is an advertiser with Medianama