For most Indian businesses the shortlist is four names: Razorpay, Cashfree, PhonePe Payment Gateway and PayU. The published standard rate at all of them is about 2% per transaction on cards, netbanking and wallets, plus 18% GST on that fee — on ₹1,00,000 of sales that is ₹2,000 in charges and ₹360 in GST, an effective 2.36% — while UPI is 0% because zero MDR on UPI and RuPay debit is fixed by regulation. Money reaches your bank account on T+2 working days as standard. Everything below is the detail that decides which one you actually sign.
What you pay: MDR, GST and the UPI exception
The fee a gateway takes on each successful transaction is the MDR, or merchant discount rate. Three things about it matter before you compare pricing pages.
The published rate is a starting rate. 2% is what a new merchant is given. Once you are settling a few lakh rupees a month you can ask for 1.6% to 1.8% and most sales teams will move, but you have to ask, in writing, method by method.
18% GST sits on the fee, not on your sale. A 2% rate is 2.36% out of your pocket. If you are GST registered you claim input credit on that GST and the real cost returns to roughly 2%. If you are not registered, 2.36% is what it costs.
UPI is free, and that changes the arithmetic. Since January 2020, MDR on UPI and RuPay debit cards has been zero by law, and UPI is now the majority of successful payments on most Indian consumer websites. A few providers recover some of this through a platform fee, so ask whether UPI carries any charge on your plan. On a ₹2,00,000 B2B invoice a card costs about ₹4,720 including GST and UPI costs nothing, so put bank transfer first on large tickets.
The comparison table
These are published standard rates at the time of writing, excluding 18% GST. They change and they are all negotiable at volume, so build a shortlist here and then get a written quote for your own category.
| Gateway | Standard rate (excl. GST) | UPI | Settlement | International | Suits |
|---|---|---|---|---|---|
| Razorpay | About 2% on cards, netbanking, wallets | 0% | T+2, T+1 on request | Yes, separate approval, about 3% | Most stores, SaaS, subscriptions |
| Cashfree Payments | About 1.75%–1.90% | 0% | T+2, instant as a paid add-on | Yes | Stores that also pay out to vendors |
| PhonePe Payment Gateway | About 2% on cards | 0% | T+2 | Limited | UPI-heavy consumer businesses |
| PayU | About 2% | 0% | T+2 | Yes | EMI-heavy and larger merchants |
| Paytm Payment Gateway | About 2% | 0% | T+1 on eligible plans | Limited | Businesses with a Paytm wallet audience |
| CCAvenue | About 2%, some plans add setup or annual fees | 0% | T+2 | Yes, many currencies | Exporters needing multi-currency checkout |
| Instamojo | Higher than the aggregators above, plan dependent | 0% | Typically slower than T+2 | Limited | Sellers with no website at all |
| Stripe (India) | About 2% domestic | Supported | Varies by account | Strong | Global SaaS billing; India onboarding is selective |
American Express, Diners and international cards cost more everywhere, usually around 3%, and instant settlement is a paid add-on wherever it is offered.
Settlement cycles: T+1, T+2 and paying to go faster
T+2 working days is the default for a new merchant almost everywhere; T+1 comes with a few months of clean history or a higher plan. The word working catches people out: a Friday evening sale settles on Tuesday, and a long festival weekend pushes it to Wednesday. Plan salaries and supplier payments around that, not around your dashboard total.
Instant settlement is sold as the fix, but it is a real fee on every rupee you pull early. It earns its keep only if that cash buys inventory that turns quickly; for a service business it is almost never worth it.
High-risk categories — travel, ticketed events, supplements, anything delivered weeks after payment — often attract a rolling reserve, where part of each settlement is held for a fixed period. COD revenue never touches this cycle at all: your courier remits on its own schedule, and RTO hurts your margin far more than 2.36% ever will.
Onboarding: documents and the pages your website must have
Onboarding is usually two to five working days. Keep these ready:
- PAN of the business (company, LLP or proprietor)
- Certificate of incorporation, or Udyam or shop licence for a proprietorship
- GST certificate, if you are registered
- Cancelled cheque or a bank statement in the exact business name
- PAN and Aadhaar of the director, partner or proprietor
- A live website or app URL
Most rejections are not about documents. They are about the website. The compliance team opens your site and looks for a contact page with a real postal address and phone number, a privacy policy, terms, a refund and cancellation policy with stated timelines, a shipping policy if you sell goods, and visible pricing. A “coming soon” page will be refused, so publish those pages before you apply. Our note on small business websites covers what a first site needs. Some categories — forex, real-money gaming, parts of financial services — are restricted or refused outright, so check yours first.
Payment methods, EMI and international payments
A normal Indian checkout offers UPI, cards, netbanking and a wallet. UPI carries most of the volume and is your cheapest rail; netbanking still matters on higher-value orders; wallet share is small now.
EMI is worth switching on above about ₹5,000 per order and it lifts conversion on electronics, furniture and courses, but no-cost EMI is not free for you: the interest the customer does not pay is a discount you fund, usually several per cent, on top of the MDR. Saved cards run on network tokens since tokenisation became mandatory in 2022, which any current plugin handles for you.
International payments need separate approval, cost about 3% plus GST, and bring cross-border paperwork. If you export services rather than goods, compare that against Payoneer or Wise first; for many consultants a foreign-currency account plus an FIRA is cheaper. PayPal has not supported domestic India payments since 2021, so it is cross-border only.
Subscriptions, mandates and auto-debit
Three rails exist for recurring money in India: UPI AutoPay, card e-mandates, and e-NACH bank mandates for larger commitments. Razorpay Subscriptions and Cashfree both handle all three, so the gateway is rarely the deciding factor.
What decides your revenue is failure handling. RBI rules require a pre-debit notification before each auto-debit, and auto-debit above ₹15,000 needs an extra authentication step (the ceiling is higher for a few categories such as insurance and mutual funds). Card mandates fail far more often than UPI AutoPay, so assume a share of renewals fails monthly and build retries plus a WhatsApp reminder in from day one. That belongs in the specification, not a later sprint; see startup websites.
Selling without a website: payment links and payment pages
If you take money from customers you already know — a clinic, a tuition centre, a consultant, an event organiser — you do not need a checkout at all. Every major gateway gives you payment links to send on WhatsApp, and hosted payment pages that behave like a one-page checkout on their domain. A UPI QR code and a payment link cover you completely.
Honestly, that is enough for a lot of businesses, and paying for a store you do not need is money wasted. A website earns its place when you want to be found by people who do not know you yet — a search problem, not a payments one.
Integration effort: WooCommerce, Shopify and custom builds
On WooCommerce, every gateway named above has an official plugin. Half a day covers installation, live keys, test transactions on each method and the webhook. Configure the webhook — without it, a customer who pays and then closes the browser leaves an unpaid order in your admin.
On Shopify, Shopify Payments is not available in India, so you connect a third-party gateway in a few clicks. Check Shopify’s current additional platform fee for third-party gateways on your plan before budgeting, because it stacks on top of the MDR.
On a custom build, use the hosted checkout unless you have a strong reason not to, and verify the payment signature on your server. Never mark an order paid from a browser callback alone: a checkout that trusts the client can be told a payment succeeded when it did not, and it is the most common security hole we find in handovers from other developers.
For reference, our own web development in India pricing includes gateway setup: the E-commerce Store build at ₹99,999 plus 18% GST covers Razorpay or PhonePe and UPI, GST invoices, Shiprocket or Delhivery and abandoned-cart recovery on WhatsApp. If your site already works, gateway integration alone is a small job that does not need a rebuild.
Refunds, chargebacks and the money you do not get back
The MDR on a refunded order is normally not returned to you: a ₹5,000 order that is refunded still cost you roughly ₹118. Nobody puts that on a pricing page, so if your category has a high return rate, add it to your cost of doing business. Refunds reach the customer in about five to seven working days depending on their bank — say so on the order page and in your WhatsApp reply, and a large share of support messages disappear.
Chargebacks are card disputes raised through the customer’s bank. You get a window to submit evidence — invoice, courier POD, authentication logs — and the Shiprocket or Delhivery delivery proof is usually what wins them. If you lose, you lose the amount and a fee, and a high dispute ratio can get your account restricted. UPI disputes are rarer and run through the bank and NPCI.
Which gateway to pick for your kind of business
A small store under ₹5 lakh a month
Razorpay or Cashfree on the standard plan. Do not spend a week negotiating a rate that saves ₹2,000 a month, and do not pay for instant settlement. Get live, make UPI the first option, revisit pricing when volume justifies it.
A service business sending invoices
Payment links plus UPI, nothing more. On invoices above about ₹50,000, ask for UPI or NEFT rather than card: you save 2.36% each time, which across ten invoices a month is real money.
A subscription product
Pick on mandate coverage and retry tools, not headline rate: you want UPI AutoPay and card e-mandates working together. Razorpay Subscriptions and Cashfree are both fine. Your churn will come from failed renewals, not from the gateway.
A marketplace paying third-party sellers
You need split settlements — Razorpay Route or Cashfree Easy Split — so each seller’s share is held and released directly. Settling everything into your own account and paying vendors by hand creates a compliance problem and a cash-flow trap the first time a payout is disputed. This is custom software territory, not a plugin decision.
Checks before you sign
- Confirm the provider holds a current RBI payment aggregator authorisation.
- Get the rate in writing per method, and ask whether UPI carries any platform fee on your plan.
- Ask for the settlement cycle in working days, and whether a rolling reserve applies to your category.
- Run a live ₹1 transaction on UPI, card and netbanking from a real phone, not just a laptop.
- Run a refund end to end and check how the fee is treated.
- Confirm the webhook fires and the order completes when the customer closes the browser mid-payment.
- Keep a second gateway account approved but idle. Both Razorpay and Cashfree have previously been barred from onboarding new merchants while licences were pending.
- Reconcile settlement reports against orders monthly.
The short version
- Budget 2.36% including GST on cards, netbanking and wallets, 0% on UPI — then push large payments to UPI or NEFT deliberately.
- Razorpay and Cashfree cover almost every case; choose on settlement, split payouts and mandates, not on a 0.1% rate difference.
- T+2 working days is normal, refunds do not return the fee, and no-cost EMI is a discount you fund.
- If you only bill customers you already know, payment links and a UPI QR are enough.
Frequently asked questions
Which payment gateway has the lowest charges in India?
On published standard rates Cashfree is usually a little cheaper than Razorpay and PayU on cards and netbanking, but the difference is small enough that it should not decide your choice. UPI is 0% at all of them, because zero MDR on UPI and RuPay debit is set by regulation. The bigger saving is negotiating your rate once you cross a few lakh rupees a month, and routing large invoices to UPI or NEFT.
Do I have to pay GST on payment gateway charges?
Yes. GST at 18% is charged on the gateway fee itself, not on your sale value. A 2% rate therefore costs 2.36% in cash. If your business is GST registered you can claim input tax credit on that GST component, which brings your effective cost back to about 2%. If you are not registered, the full 2.36% is a cost you cannot recover, so factor it into your pricing.
How long does money take to reach my bank account?
T+2 working days is the standard settlement cycle for a new merchant, with T+1 available on request or on higher plans once you have a clean history. Working days matter: a Friday evening sale usually settles on Tuesday, and festival holidays push it further. Instant settlement is offered as a paid add-on charged on the amount you pull early — useful for restocking inventory, rarely worth it otherwise.
Can an Indian website accept international payments?
Yes, but it is a separate approval on your gateway account and costs about 3% plus GST rather than 2%. Cross-border settlement paperwork applies as well. If you export services rather than ship goods, compare a foreign-currency receiving account such as Payoneer or Wise against a gateway first, since it is often cheaper and gives you the FIRA you need for export documentation.
Do I need a website to accept online payments in India?
No. Payment links sent on WhatsApp, a UPI QR code and hosted payment pages let you take card, UPI and netbanking payments without any site of your own. The KYC requirement is identical. A website matters when you want customers who do not already know you to find you, or when you need a catalogue — not for the act of collecting money itself.
