Payment gateway charges in India: how to compare them

The article you want is a table comparing every Indian gateway's current rates. It is also the article that would mislead you fastest, and it is worth being explicit about why rather than publishing one anyway.

Providers revise pricing. Published rates are starting points that differ by business category, by expected volume and by negotiation, so two businesses signing with the same provider in the same month can hold materially different terms. Introductory rates expire. And the regulatory position on some instruments has itself been changing, which means a figure that was correct when written can be wrong when read.

So the durable thing to learn is the anatomy of the charge and the method for comparing quotes. That knowledge does not expire, and it lets you evaluate whatever any provider puts in front of you today. Any comparison table, including one presented with great confidence, is a snapshot of a moving target — useful as a starting shortlist, never as the basis for a decision you make without reading your own quote.

The percentage everyone quotes is one line among several. A complete gateway cost includes:

The percentage itself, which varies by payment instrument rather than being one number. Sometimes a fixed amount per transaction alongside it, which matters disproportionately on small-value orders. GST at 18% charged on the fee — not on your sale, on the gateway's charge, so a 2% rate is 2.36% in effect. Setup and annual maintenance charges, which some providers levy and others waive. A fee for processing a refund, and in some contracts the original transaction fee is not returned either, so a refunded order can cost you twice. A charge when a customer disputes a payment. And sometimes a payout fee on settlement to your bank.

The practical consequence is that two providers quoting the same headline percentage can differ substantially in what you actually pay. On a business with many small orders, a fixed per-transaction component matters more than the percentage does — and it is the line most often left out of a verbal quote.

There is no single rate, because the cost depends on how the customer pays. Credit cards cost more than debit cards. International cards and instalment options cost more again. Netbanking varies by bank. And UPI has its own history.

Merchant discount rate on UPI and RuPay debit card transactions was made zero by government mandate with effect from 1 January 2020, implemented through Section 10A of the Payment and Settlement Systems Act, 2007 and Section 269SU of the Income-tax Act, 1961. That is a real and significant fact for a business whose customers pay largely by UPI.

Two qualifications matter. Zero merchant discount rate does not always mean nothing appears on your statement — aggregators may levy their own platform charge on that volume, which is a separate commercial term you have to read. And the statutory position has been revisited for larger merchants, with the framework still being settled at the time of writing. So confirm the current rule and, more importantly, confirm what your own contract says, rather than relying on a general statement about UPI being free.

A gateway collects the customer's money immediately and pays it to your bank after a delay — commonly a couple of working days, sometimes longer for newer accounts or particular categories.

That delay does not appear on any invoice and is a genuine cost. Money you have earned and cannot use is working capital you have to fund from somewhere, and for a business that restocks quickly on thin margins, the difference between a two-day and a five-day cycle can matter more than a fraction of a percent on the rate. A slightly more expensive provider with faster settlement is sometimes the cheaper arrangement in practice.

Ask specifically about two related terms. Some providers hold a rolling reserve — a percentage retained for a period against future disputes — which is common in higher-risk categories and materially changes your cash position. And ask what happens when a settlement is late: whether there is a stated timeline, who you contact, and whether anyone answers. A delayed settlement during a festival sale is the scenario in which support quality stops being an abstract consideration.

Take an illustrative 2% rate on a ₹10,000 order. The fee is ₹200. GST at 18% on that fee is ₹36. Total deduction ₹236, leaving ₹9,764 before anything else.

Two adjustments make that figure more honest. First, the fee is charged on the full amount collected, which includes any shipping you charged and the GST you collected on behalf of the government. You are paying a percentage on money that was never your revenue. Second, measure the deduction against your gross margin rather than against the sale price: on an order with ₹2,000 of margin, ₹236 is close to 12% of what you actually earned, which is a very different number from 2.36%.

Then build the calculation on your own instrument mix rather than one blended rate. If most of your customers pay by UPI and a minority by credit card, your effective cost is dominated by that split — and the mix usually moves the total more than the choice between two providers does. A weighted calculation across your actual payment pattern is the comparison worth running.

Ask each provider for the same list, in writing: the rate for every instrument separately, every fixed fee including setup and annual charges, the settlement cycle, refund and dispute fees, whether the original fee is returned on a refund, any reserve policy, whether the quoted rate is introductory and what it becomes, and which business categories they restrict.

Then weight those rates by your own instrument mix to produce one comparable effective cost per provider. Two quotes are only comparable after this step, and doing it usually reorders the shortlist.

Test the checkout before deciding. Complete a real payment on a phone, on mobile data, through the instruments your customers actually use, and try a refund. A gateway whose flow fails on a common app, or whose page loads slowly on a weak connection, costs far more in abandoned orders than any rate difference recovers.

Finally, weigh the things that are not priced: whether support answers, whether the dashboard makes reconciliation possible, and whether the settlement reports match your accounting without manual work. Those determine how much of somebody's month the gateway consumes, and that cost is real even though no quote contains it.