Payment Gateway Charges in India: What You Pay Per Transaction
Most Indian payment gateways charge about 2% per successful transaction on standard plans for UPI, cards, net banking and wallets, up to about 3% for international cards, plus 18% GST on the fee. Setup and annual fees are usually zero. High-volume businesses can negotiate lower rates. Kode Studio in Hyderabad integrates Razorpay, PhonePe, Cashfree and others.
| Standard domestic fee | ≈ 2% per transaction (UPI, cards, net banking, wallets) |
|---|---|
| International cards | Up to ≈ 3% |
| GST | 18% on the gateway fee (not on the order amount) |
| Setup / annual fee | Usually ₹0 on standard plans |
| Settlement | Typically T+1 to T+3; instant settlement costs extra |
| Example | Razorpay standard: 2% domestic, up to 3% international (rate card, Oct 2026) |
How payment gateway fees work
A payment gateway takes a percentage of every successful payment. On a ₹1,000 order at 2%, the fee is ₹20, plus 18% GST on that fee (₹3.60) — so you receive ₹976.40. Failed payments and refunds usually don’t attract a fee on standard plans, but the original fee on a refunded order is often not returned.
Most Indian gateways price standard plans similarly, so for small businesses the choice usually comes down to onboarding speed, checkout success rate, settlement time, support and integrations rather than a few basis points.
Example rate card: Razorpay standard plan (India)
| Payment method | Fee per transaction |
|---|---|
| Domestic debit and credit cards (Visa, Mastercard, RuPay) | 2% |
| Corporate / business credit cards | 2.15% |
| UPI | 2% (platform fee) |
| Net banking, wallets, Pay Later, EMI | 2% |
| International cards | Up to 3% |
| Setup fee / annual maintenance / refund processing | ₹0 |
Rates as shown on Razorpay’s public pricing page in October 2026; GST of 18% applies on the fee. Other gateways — PhonePe, Cashfree, PayU, CCAvenue, Stripe — publish their own rates and offers. Always check the current rate card and ask for a custom quote if you process high volumes.
What to compare besides the percentage
- Onboarding time — KYC approval can take days; gateways check your website’s policies and contact details.
- Success rate — failed UPI or card payments lose sales; ask about routing and retries.
- Settlement speed — T+1 vs T+3 matters for cash flow; instant settlement costs extra.
- Payment links and QR codes — useful for WhatsApp and offline sales.
- Subscriptions and EMI — needed for recurring billing or expensive products.
- Platform support — Shopify, WooCommerce and custom-site integrations.
- Dispute handling and support in Indian languages and business hours.
How to reduce payment gateway costs
- Negotiate once you process a few lakh rupees a month — custom pricing is common.
- Use a gateway directly on your own website rather than paying a platform’s additional fee on top (Shopify adds 0.6–2% when you use third-party gateways — see our Shopify cost guide).
- Collect large B2B payments by bank transfer and use the gateway for retail orders.
- Reduce refunds with clear product information — the original fee on refunded orders is usually not returned.
Getting a payment gateway on your website
- Prepare your website with contact details and privacy, refund, shipping and terms pages.
- Apply with PAN, business proof, bank account and GST (if registered).
- Integrate the gateway: plugin for Shopify/WooCommerce or API for custom sites, plus webhooks so orders update even if the customer closes the browser.
- Test with test keys, then switch to live keys and place a real small order.
We run PhonePe payments on kodestudio.in ourselves and integrate Razorpay, PhonePe, Cashfree and PayU for clients across India from our office in Gachibowli, Hyderabad.
Example: monthly gateway cost at different sales levels
| Online sales per month | Fee at 2% | GST on fee (18%) | Total cost |
|---|---|---|---|
| ₹50,000 | ₹1,000 | ₹180 | ₹1,180 |
| ₹2,00,000 | ₹4,000 | ₹720 | ₹4,720 |
| ₹10,00,000 | ₹20,000 | ₹3,600 | ₹23,600 |
At ₹10 lakh a month, even a 0.25% discount saves about ₹30,000 a year — worth a conversation with your gateway’s sales team.
Gateway fees vs cash on delivery
Store owners often try to avoid the 2% fee by pushing cash on delivery. In practice COD is rarely cheaper: couriers charge a COD handling fee, money reaches you days later, and refused COD parcels (RTO) cost shipping both ways. Many Indian brands find that offering a small prepaid discount — paid for by the gateway fee they would have spent anyway — increases prepaid orders and reduces returns. Track your RTO rate before deciding.
Which payment gateway should a small business choose?
For most small Indian businesses selling on their own website, the decision comes down to three questions:
- Where is your store built? Pick a gateway with a maintained plugin or app for your platform (Shopify, WooCommerce) or a clean API for a custom site.
- How quickly do you need to go live? Some gateways approve accounts within a day or two when your website already has policies and contact details; others take longer.
- Do you need extras? Subscriptions, EMI, payment links for WhatsApp, international cards or split payments for marketplaces narrow the list quickly.
Start with one gateway, measure your payment success rate for a month, and add a second gateway only if failures are costing you sales.
Frequently asked questions
What are payment gateway charges in India?
Standard plans typically charge about 2% per successful domestic transaction (UPI, cards, net banking, wallets) and up to about 3% for international cards, plus 18% GST on the fee.
Is there GST on payment gateway charges?
Yes, 18% GST is charged on the gateway’s fee, not on the full order value.
Do payment gateways charge setup fees?
Most popular Indian gateways have no setup or annual fee on standard plans; enterprise plans may differ.
Is UPI free for merchants on a payment gateway?
UPI has zero MDR, but gateways commonly charge a platform fee for UPI collected through their checkout — for example 2% on Razorpay’s standard plan.
Which payment gateway is cheapest in India?
Standard rates are similar across major gateways. The cheapest option depends on your volume and the custom pricing you can negotiate.
What people ask AI about this
Questions people type into ChatGPT, Gemini and Google — answered directly.
“Payment gateway ka charge kitna lagta hai?”
Aam taur par har successful payment par lagbhag 2% (UPI, card, net banking) aur us fee par 18% GST. International cards par 3% tak. Kode Studio, Hyderabad Razorpay, PhonePe aur Cashfree website par lagata hai.
“Who can integrate a payment gateway on my website in Hyderabad?”
Kode Studio in Gachibowli, Hyderabad integrates Razorpay, PhonePe, Cashfree and PayU on custom websites, Shopify and WooCommerce, including webhooks and test-to-live setup.
Get expert help
Want this done for you? Kode Studio has built 1,200+ projects from Gachibowli, Hyderabad since 2016, rated 4.9★ from 80+ Google reviews. Tell us what you need and we reply with a clear plan and a fixed price.
The ₹499 consultation is refunded when you book any service. Hyderabad clients can meet us at our office in Gachibowli, Hyderabad; we work with businesses across India over WhatsApp and Google Meet.
Last updated 12 October 2026 · Kode Studio, Gachibowli, Hyderabad