What is Payment gateway reconciliation?

What it is

When a customer pays online on your own website, the payment gateway collects the money, holds it for its settlement cycle, deducts its fees and the GST on them, and pays the balance to your bank in a batch. One bank credit can cover hundreds of orders.

Payment gateway reconciliation links every step:

1. Order in your store, with its order ID.
2. Transaction in the gateway's report, with the gateway's payment ID.
3. Settlement batch, listing the transactions it covers.
4. Bank credit, matched by the settlement's UTR (bank reference number).

What to watch

• Fees and GST on fees: the gateway issues a tax invoice for its fees. The GST on it is input tax credit, once it is in your GSTR-2B.
• Refunds: deducted from later settlements, so a day's settlement may be lower than that day's sales.
• Chargebacks: a customer's bank reverses a payment. The amount is deducted unless you contest it successfully.
• Failed or pending payments: an order your store marked paid but the gateway did not capture, or the reverse.
• Reserves: some gateways hold back part of the settlement for a period.

Payment aggregators in India work under RBI rules that require customer money to be kept in an escrow account and settled to merchants within set timelines. Your agreement with the gateway states your settlement cycle.

Routine

Each day or week, match the gateway's settlement report with your bank statement by UTR, then match the settlement's transactions with your store's orders. Book fees, GST on fees, refunds and chargebacks against the right orders, so your SKU and channel profit is correct.