Payment Gateway Charges in India

Payment gateway charges in India are a percentage of each successful transaction, typically between about 1.5% and 3% depending on the payment method, plus 18% GST on that fee. Domestic UPI, cards, net banking and wallets sit at the lower end; international cards and EMI sit higher. Standard online accounts from the major Indian providers carry no setup fee and no annual maintenance charge — you pay only on money you actually collect.

On a ₹1,000 sale at a 2% rate you pay ₹20 in platform fee plus ₹3.60 GST, so ₹23.60 in total and ₹976.40 reaches you. The fee scales with the sale, so the arithmetic is the same at any ticket size. Cashfree's published standard domestic rate is 1.95%, and merchants signing up from 21 July 2026 pay 0% on up to ₹20 lakh of transaction value per month until 31 March 2027.

There is no permanently free payment gateway — a provider carries real cost on every transaction. What does exist is promotional zero-fee pricing for new merchants, and Cashfree currently publishes 0% on domestic payment gateway transactions up to ₹20 lakh per month until 31 March 2027 for accounts opened on or after 21 July 2026. Read the conditions: volume above the monthly cap reverts to the standard rate, and the offer requires UPI to be at least 40% of your monthly value.

No. Quoted rates are almost always exclusive of GST, and 18% is added to the fee — not to your sale. A 2% headline rate costs 2.36% in cash. If your business is GST-registered you can claim that GST as input tax credit, which many small merchants never do.

UPI is the cheapest method to accept in India, followed by net banking and debit cards, with credit cards, EMI and international cards costing more. Because UPI now carries the majority of online payments for most Indian businesses, a per-method pricing structure usually beats a single blended rate — a blended rate makes you pay card-level pricing on UPI volume.

For a standard Indian online payment gateway account, both should be zero — Cashfree publishes zero setup fee and zero annual maintenance charge. Being asked for a setup fee or an annual charge on a normal online account is a reason to compare other providers before committing.

MDR — merchant discount rate — is the percentage a merchant pays on a card or digital transaction, shared between the acquiring bank, the card network and the payment provider. In everyday use in India, the MDR and the payment gateway charge mean the same thing to a merchant: the percentage deducted from each sale. RBI has mandated zero MDR on UPI and RuPay debit for merchant transactions in certain categories, which is one reason UPI is cheap to accept.

The standard domestic settlement cycle is T+1 — money reaches your bank one working day after the transaction, with international settlements typically T+2 in INR. Faster settlement is available as a paid feature at every gateway. Nothing is deducted for a standard cycle, but if you pay suppliers weekly, a slower cycle is a real financing cost even though it never shows on a fee statement.

Usually not — the platform fee on the original transaction is generally not returned when you refund. For a returns-heavy business such as fashion or footwear this becomes one of the bigger cost lines, and it can easily outweigh a 0.1% difference in headline rate. Ask each provider this question directly before you sign.

Cross-border transactions cost the provider more: the card networks charge higher interchange, fraud risk is higher, and there is currency conversion and additional compliance work. Published international card rates in India generally sit near 3%, against under 2% for domestic. If you sell abroad, price your product on the international rate rather than assuming your domestic one.

Compare four things, not one. First, the rate above any promotional cap, because that is the rate you will live on. Second, whether pricing is per method or blended, which matters a great deal if UPI dominates your mix. Third, GST — add 18% to every number so you are comparing like with like. Fourth, the costs that never appear in the headline: refund handling, chargeback fees, instant settlement and payout charges.

Yes, above a certain volume. Published rates are list prices, and providers negotiate on monthly volume, business category and payment mix. A new business has little leverage and should choose on published pricing and promotional offers; a business processing several crore a year should be asking for a rate review annually rather than accepting the card rate it signed up on.

For card and most digital payments in India, surcharging customers is restricted by card network rules and by RBI guidance, and doing it can put your merchant account at risk. The common lawful approaches are the opposite: build the cost into your price, or offer a small prepaid discount that steers customers to the cheapest method for you. Check the current position with your provider rather than assuming.

Exactly the same rates — the plugin is free and does not add a charge of its own. What you pay depends on the payment methods your shoppers use, not on the platform your store runs on. A WooCommerce store whose customers mostly pay by UPI pays materially less than one whose customers mostly use credit cards.

For a small business, UPI collection through a payment gateway or a payment link is the cheapest route, and it needs no website. Take a promotional zero-fee offer if you qualify as a new merchant, keep UPI as the dominant method, avoid instant settlement unless cash flow genuinely requires it, and claim the GST on your gateway fees as input tax credit. Those four together usually matter more than the difference between one provider's rate and another's.