Which payment gateway should an Indian online store use in 2026?
For most small and mid-sized Indian stores in 2026, the honest answer is to start with an aggregator such as Razorpay, Cashfree or PayU. They charge roughly 2% per transaction on cards and netbanking, keep UPI free or near-free, ask for no meaningful setup fee, and get you live in days once your KYC clears. You only need CCAvenue, Stripe or a direct bank integration when volume, international cards or a specific enterprise requirement demands it. Pick the gateway that settles fast, fails least and supports your platform cleanly – not just the one with the lowest headline rate.
- Aggregators (Razorpay, PayU, Cashfree, Instamojo) suit around 90% of Indian small stores: near-zero setup, one integration for UPI, cards and netbanking, and roughly 2% on cards.
- UPI now drives the majority of Indian online payments and usually costs you little or nothing – design your checkout UPI-first.
- The headline fee is not the real cost; transaction success rate, COD returns (RTO) and settlement timing hit your cash flow harder.
- Settlement is typically T+2 for most aggregators; some offer faster cycles on higher plans – confirm current terms with the provider.
- You need business KYC (PAN, bank proof, address, and GST if applicable) before any gateway approves live payments.
Aggregator vs direct integration: what actually changes
An aggregator pools many merchants under its own master account, so you skip the long bank onboarding and go live quickly with UPI, cards, netbanking and wallets through one dashboard and one set of API keys. A direct integration means you hold your own merchant account with each bank or network, negotiate rates yourself, and typically see better per-transaction pricing at scale – but you carry more compliance, longer setup and heavier engineering. For a Pune D2C brand doing a few hundred orders a month, an aggregator is almost always the right call. Direct integration earns its keep only once volume is large enough that shaving a fraction of a percent covers the added overhead.
The good news for most owners is that you rarely touch raw code. Razorpay, PayU, Cashfree, Instamojo and Stripe all ship official plugins for WooCommerce and apps for Shopify, so your developer installs the plugin, pastes the API keys, configures the payment methods, and the gateway handles the rest of the checkout.
The six gateways, compared
Here is how the popular options stack up in 2026. Treat every figure as a typical range, not a quote – always check current pricing on the provider’s own site before you commit.
| Gateway | Typical card/netbanking fee | Setup / AMC | Best for |
|---|---|---|---|
| Razorpay | Around 2% | No setup fee | D2C brands, startups, subscriptions |
| PayU | Around 2% | No setup fee | Higher-volume retail, success rates |
| Cashfree | Around 2% | No setup fee | Fast settlement, payouts, refunds |
| CCAvenue | Around 2% and up | May have setup/AMC | Enterprises, wide payment options |
| Instamojo | Around 2% or higher | No setup fee | Solo sellers, links, no-website selling |
| Stripe | Around 3%+ (international) | No setup fee | Global-first, cross-border sales |
Razorpay
The default pick for Indian D2C and startups. Clean developer experience, an official WooCommerce plugin and Shopify app, plus UPI, cards, netbanking, wallets, EMI and payment links in one dashboard. Card and netbanking fees sit around 2%, with no real setup fee. Strong for subscriptions and quick launches. Check current pricing before you commit.
PayU
A long-standing choice for higher-volume retail and D2C, often praised for its transaction success rates and retry logic on failed payments. Pricing is broadly around 2% on cards and netbanking with no setup fee for standard onboarding. Good coverage of cards, UPI, netbanking, wallets and EMI. Confirm your negotiated rate as you scale.
Cashfree
Known for fast settlements and strong payout tools, which suits stores that also disburse refunds or vendor payments frequently. Standard card and netbanking pricing is around 2%, UPI stays cheap, and setup is typically free. Solid APIs and platform plugins make it a practical option for operations-heavy Pune brands.
CCAvenue
One of India’s oldest gateways, favoured by enterprises for its very wide payment-option coverage and multi-currency support. Unlike pure aggregators, it may involve a setup fee or an annual maintenance charge depending on the plan. Worth evaluating when you need breadth, invoicing features or established enterprise support. Ask for current plan terms.
Instamojo
Built for solo sellers, creators and micro-businesses that want to collect money fast, even without a full website, using payment links and simple stores. Per-transaction pricing can run a little higher than the large aggregators, and there is usually no setup fee. Ideal for testing an idea or running a low-volume side business.
Stripe
The go-to for international and global-first businesses thanks to excellent developer tooling and cross-border support. In the Indian context it is used more selectively, and fees for international transactions typically run higher, around 3% or more. Choose Stripe when overseas customers and clean APIs matter more than the lowest domestic rate.
It is not just the 2%: the costs people forget
Merchants obsess over the headline percentage and ignore the numbers that quietly decide profitability. The first is transaction success rate. A gateway that approves 96 out of 100 attempts versus one that approves 90 makes a bigger difference to revenue than a 0.1% fee gap, because every failed attempt is a customer who may never return. Ask providers about their success rates and any smart-routing or retry features.
The second is cash flow. A T+2 settlement cycle means money you earned on Friday may not land until the middle of the next week once weekends and holidays stack up. For a Baner boutique buying fresh stock every week, that gap matters. The third is COD. Cash on delivery still drives a large share of Indian orders, but it carries courier remittance fees and return-to-origin (RTO) losses when customers refuse parcels – costs that dwarf a 2% online fee.
Then come the edge cases: international card surcharges, chargeback handling, GST charged on the fee itself, and platform commissions if you also sell through a marketplace alongside your own site. A good integration partner models all of this before you pick a provider, so the cheapest sticker rate does not quietly become your most expensive choice.
How each payment method really costs you
The gateway brand matters less than your payment mix. Here is how the common Indian methods compare in 2026 – treat the figures as typical ranges and confirm current numbers with your provider.
| Method | Typical cost to you | Settlement | What to watch |
|---|---|---|---|
| UPI | Free or near-free | Usually T+1 to T+2 | Dominant method; design checkout UPI-first |
| Debit / credit cards | Around 2% (more for international) | Typically T+2 | Watch international and premium-card fees |
| Netbanking | Around 2% or a flat per-transaction fee | Typically T+2 | Useful for high-ticket orders |
| Cash on delivery (COD) | Courier remittance fee + RTO risk | After delivery and remittance cycle | High returns; adds cash-handling cost |
Should you run one gateway or two?
Larger Indian stores increasingly keep a primary gateway and a backup. If your main provider has an outage, or a particular bank’s netbanking goes down during a big sale, a secondary gateway or smart routing keeps checkout alive and recovers orders you would otherwise lose. For a store doing a few hundred orders a month, the added complexity rarely pays off – one well-configured aggregator is enough. Once you are processing serious daily volume, or running heavy festive-season campaigns, redundancy becomes a genuine revenue protector rather than an over-engineering exercise. Decide based on what a lost hour of checkout would actually cost you.
What you need before you apply
Every gateway runs a Know Your Customer (KYC) check before it enables live payments. Having documents ready turns a week of back-and-forth into a same-day approval. Most aggregators ask for:
- PAN card of the business or proprietor
- Bank account details with a cancelled cheque or recent bank statement
- Business address proof and, for companies, incorporation documents
- GST certificate where applicable to your turnover or category
- A live website or app with clear pricing, contact, shipping, refund and privacy pages
That last point trips up many first-time sellers: gateways want to see a legitimate, policy-complete store before approval, which is exactly what a properly built e-commerce site delivers.
How to add a payment gateway to your store in 6 steps
- Confirm your entity and gather KYC. Decide whether you are onboarding as a proprietor or a company, then collect PAN, bank proof, address proof and GST if applicable.
- Shortlist and pick a gateway. For most stores, compare two or three aggregators on fees, settlement cycle, success rate and plugin support, then choose one.
- Create the account and submit KYC. Register on the provider dashboard and upload your documents. Accurate details here prevent approval delays.
- Get approved and fetch API keys. Once verified, generate your live and test API keys or credentials from the dashboard.
- Connect it to your store. Install the official WooCommerce plugin or Shopify app, paste your keys, and configure UPI, cards, netbanking and wallets.
- Test, then go live. Run test transactions in sandbox mode, verify success and failure flows, confirm settlement to your bank, and switch to live.
Which gateway fits a Pune store?
Context beats generic advice. A Hinjewadi D2C skincare brand shipping across India, largely on UPI and cards, is well served by Razorpay or Cashfree – fast to launch, cheap on UPI and clean with WooCommerce. A Baner boutique or cafe selling a smaller volume of higher-ticket items might value PayU’s success rates and quick settlement, since every abandoned high-value cart stings.
A Kharadi SaaS or services firm billing overseas clients will lean toward Stripe or a gateway with strong international acceptance, where cross-border reliability outweighs the domestic rate. A PCMC manufacturer or auto-ancillary supplier moving to B2B online orders may want CCAvenue’s breadth and invoicing, or an aggregator with good netbanking for high-ticket bank transfers. The pattern is simple: match the gateway to how your customers actually pay, then optimise from there.
Frequently Asked Questions
Which payment gateway is the cheapest in India?
There is no single cheapest gateway – most aggregators sit around 2% on cards and netbanking, with UPI free or near-free. Your effective cost depends on your payment mix, volume and negotiated rate. A UPI-heavy store pays far less than a card-heavy one on the same gateway, so optimise for method mix, not just the sticker rate.
Do I need a registered company or GST to accept online payments?
Not necessarily. Sole proprietors and individuals can onboard with most aggregators using a PAN, a bank account and basic address proof. GST is required only if your turnover crosses the threshold or your category mandates it. That said, a registered entity and GST make approvals smoother, unlock better rates and look more credible to customers and banks.
Are UPI payments charged to the merchant?
For most everyday person-to-merchant UPI transactions, the cost to you is currently zero or very low, which is a big reason UPI dominates Indian checkouts. Rules and MDR policy can change, and premium instruments like credit-card-on-UPI may carry a fee, so treat UPI as cheap rather than permanently free and confirm current terms with your provider.
How long does it take to receive my money (settlement)?
Most Indian aggregators settle on a T+2 basis, meaning funds reach your bank about two working days after a successful order, excluding bank holidays and weekends. Some gateways offer faster or instant settlement on higher plans, sometimes for a small fee. If steady cash flow matters, ask each provider for its current standard cycle before you commit.
Can I accept international payments from my Indian store?
Yes. Razorpay, PayU, Cashfree and CCAvenue support international cards once you enable and get approved for cross-border acceptance, while Stripe is popular for global-first businesses. International transactions usually cost more, around 3% or higher, and involve extra compliance and currency handling. If overseas sales are core to your model, shortlist gateways on their international success rates, not just fees.
Get your payment gateway set up right
Codelith Lab builds e-commerce stores from Rs. 19,999 with UPI, cards and netbanking wired in, tested and ready to sell. Tell us your product and we will recommend the right gateway.
Also serving nearby areas: Codelith Lab builds and integrates e-commerce stores across Pune, including Hinjewadi, Baner, Kharadi and PCMC. Explore our website development in Pune hub, or read more on e-commerce website cost in Pune, e-commerce website vs marketplace in India, and how much a website costs vs the value it delivers.
Comparing the gateways themselves? See our side-by-side comparison of Razorpay, PhonePe, Cashfree and the rest, with charges and settlement cycles.
