Payment Gateways · Updated 30 Oct 2026

How to Choose a Payment Gateway in India

UPI QR, payment links or a full gateway? What fees really cost, how settlements work, what KYC to expect, and how to compare Razorpay, Cashfree, PayU, PhonePe and others for your business.

Getting paid online in India is easier than ever, but the choice of how to accept payments affects your costs, cash flow and customer experience. A tea stall, a coaching institute and an online store need different things.

Do you need a gateway at all?

  • UPI QR code — for shops and counters. Free to set up from PhonePe, Paytm, Google Pay for Business, BharatPe or your bank. Customers scan and pay from any UPI app.
  • Payment links — for businesses that sell over WhatsApp, Instagram or phone. You send a link, the customer pays by UPI, card or net banking. Most gateways offer this without needing a website.
  • A full payment gateway — for websites and apps with a checkout, subscriptions, or high volumes.

Many small businesses only need a QR code and payment links.

Understanding fees

Gateways charge a percentage per transaction, which varies by payment method — UPI, debit cards, credit cards, international cards, wallets and EMI often have different rates. GST applies on the gateway's fee. Some providers charge setup or annual maintenance fees; many do not. When comparing:

  1. Estimate your payment mix (for example, 70% UPI, 20% cards, 10% net banking).
  2. Ask each provider for the rates for each method, in writing.
  3. Calculate your effective monthly cost at your current volume and at double the volume.
  4. Ask about volume discounts once you cross certain thresholds.

Settlement: when you get your money

Money paid by customers reaches your bank after a settlement period, which differs by provider and business type. Faster or instant settlement is often available for an extra fee. If cash flow is tight, factor this in — a slightly higher fee may be worth getting money a day or two earlier.

KYC and activation

Expect to provide PAN, bank account details, business proof (GST certificate, Udyam, partnership deed or company documents), and a website or app that clearly shows your products, prices, terms, refund policy and contact details. Certain categories — such as gaming, crypto or some financial services — face extra checks or may not be accepted. Incomplete websites are a common reason for delays, so prepare your policy pages before applying.

Features worth comparing

  • Plugins for your platform: Shopify, WooCommerce, Wix or your custom app.
  • Subscriptions for recurring billing (memberships, SaaS, tuition fees).
  • International payments if you sell abroad — check currency support and export documentation.
  • Payouts if you need to pay vendors or customers in bulk.
  • Refunds and disputes — how easy is it to refund, and how are chargebacks handled?
  • Dashboard and reports that your accountant can use for reconciliation.

Protecting yourself

  • Confirm payments in your own dashboard or soundbox, never by trusting a customer's screenshot.
  • Check your QR sticker regularly for tampering.
  • Use two-factor authentication on your gateway account.
  • Reconcile settlements with orders every week.

Shortlist by business type

  • Shops and counters: a free UPI QR with a soundbox from PhonePe, Paytm or BharatPe.
  • Sellers on WhatsApp and Instagram: payment links from Razorpay, Cashfree, PhonePe or Instamojo.
  • Online stores and apps: compare Razorpay, Cashfree, PayU and PhonePe's gateway on fees, settlement and plugins.
  • Exporters and freelancers paid from abroad: check gateway international payments, and consider Wise, Payoneer or PayPal for receiving foreign currency.

Compare providers on our payment gateways and UPI payment apps pages.

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