Accepting online payments is no longer optional for Indian businesses. Whether you run an e-commerce store, a SaaS product, or a service business, you need a reliable payment gateway that supports the payment methods your customers prefer.
This guide compares the major payment gateways available in India and helps you choose the right one for your business.
What to Look For in a Payment Gateway
Before comparing providers, understand the key factors:
- Payment methods supported: UPI, credit/debit cards, net banking, wallets, EMI, BNPL
- Transaction fees: Percentage per transaction plus fixed fee
- Settlement time: How quickly money reaches your bank account
- Integration ease: How simple is it to add to your website or app
- Reliability: Uptime and success rates
- Documentation and support: Quality of developer docs and customer support
- Additional features: Subscriptions, invoicing, payment links, analytics
Major Payment Gateways in India
Razorpay
Razorpay is the most popular payment gateway among Indian startups and tech businesses.
Payment methods: UPI (including UPI Autopay), credit/debit cards, net banking, wallets (Paytm, PhonePe, Amazon Pay), EMI, BNPL (Simpl, LazyPay), international cards
Pricing:
- 2% per transaction for Indian cards, UPI, and net banking
- 3% per transaction for international cards and Amex
- No setup fee, no annual fee
- 18% GST on transaction fees
Settlement: T+2 business days (standard), same-day settlement available for an additional fee
Strengths:
- Excellent developer documentation and APIs
- Razorpay Payment Links for sharing via WhatsApp or email
- Razorpay Subscriptions for recurring payments
- Razorpay Pay Later (BNPL) integration
- Smart Collect for bank transfer reconciliation
- Dashboard with detailed analytics
- Magic Checkout for one-click checkout experience
Best for: Startups, SaaS companies, e-commerce businesses, and any tech-savvy business that needs robust APIs
Cashfree
Cashfree has grown rapidly with competitive pricing and strong payout capabilities.
Payment methods: UPI, credit/debit cards, net banking, wallets, EMI, BNPL, international cards
Pricing:
- 1.90% per transaction for Indian cards and UPI
- 3.5% + Rs 7 per transaction for international cards
- No setup fee
- 18% GST on transaction fees
Settlement: T+1 business days (standard), instant settlement available
Strengths:
- Lower pricing than Razorpay for domestic transactions
- Excellent payout/disbursement capabilities (bulk transfers, vendor payments)
- Cashfree Payouts for sending money to bank accounts
- Good subscription and EMI support
- Strong API documentation
- Instant refunds capability
Best for: Businesses that need both payment collection and payout capabilities, marketplace businesses, and cost-conscious startups
PayU
PayU is one of the oldest payment gateways in India with a large merchant base.
Payment methods: UPI, credit/debit cards, net banking, wallets, EMI, BNPL (PayU Money, LazyPay), international cards
Pricing:
- 2% per transaction for domestic transactions
- 3% for international transactions
- Custom pricing for high-volume merchants
- 18% GST on transaction fees
Settlement: T+2 business days (standard)
Strengths:
- Strong enterprise and large merchant relationships
- LazyPay BNPL integration
- Multi-currency support for international businesses
- Custom pricing for high-volume businesses
- PayU Payouts for disbursements
- PayU Biz for enterprise-grade solutions
Best for: Large businesses, enterprise customers, and businesses needing BNPL integration
Paytm Payment Gateway
Leveraging the Paytm brand and user base, this gateway has unique advantages.
Payment methods: UPI, credit/debit cards, net banking, Paytm Wallet, Paytm Postpaid, EMI
Pricing:
- 1.99% per transaction for domestic payments
- No setup fee
- 18% GST on transaction fees
Settlement: T+1 to T+2 business days
Strengths:
- Huge Paytm user base (wallet and UPI)
- Paytm Postpaid (BNPL) integration
- Strong brand trust among Indian consumers
- Paytm QR code integration for offline-to-online
- Good for businesses targeting tier 2 and tier 3 cities
Best for: Businesses targeting mass-market Indian consumers, especially in smaller cities where Paytm has strong penetration
Instamojo
Instamojo positions itself as a simple payment solution for small businesses and creators.
Payment methods: UPI, credit/debit cards, net banking, wallets, EMI
Pricing:
- 2% + Rs 3 per transaction
- No setup fee
- 18% GST on transaction fees
Settlement: T+3 business days (standard)
Strengths:
- Very easy setup (no developer needed)
- Built-in online store (mojoStore)
- Payment links and buttons for websites
- Digital product selling (courses, ebooks)
- Good for non-technical business owners
- Free invoicing tools
Best for: Small businesses, freelancers, creators, and anyone who wants to start accepting payments quickly without technical setup
PhonePe Payment Gateway (for Business)
PhonePe leverages its massive UPI user base for merchant payments.
Payment methods: UPI (dominant), credit/debit cards, net banking, PhonePe Wallet
Pricing:
- 1.5-2% per transaction
- Custom pricing for large merchants
- 18% GST on transaction fees
Settlement: T+1 business days
Strengths:
- Access to PhonePe’s 400+ million user base
- Very high UPI success rates
- PhonePe Switch for in-app merchant storefronts
- Strong offline payment acceptance via QR codes
Best for: Businesses targeting UPI-heavy customers and merchants with physical and online presence
Pricing Comparison
| Gateway | Domestic Rate | International Rate | Settlement |
|---|---|---|---|
| Razorpay | 2% | 3% | T+2 |
| Cashfree | 1.90% | 3.5% + Rs 7 | T+1 |
| PayU | 2% | 3% | T+2 |
| Paytm | 1.99% | N/A | T+1 to T+2 |
| Instamojo | 2% + Rs 3 | N/A | T+3 |
| PhonePe | 1.5-2% | N/A | T+1 |
Note: UPI transactions through UPI QR codes may have zero MDR (merchant discount rate) for certain categories under government mandates, though gateways may still charge platform fees.
Features Comparison
Subscription/Recurring Payments
- Razorpay: Excellent (UPI Autopay, cards, e-mandate)
- Cashfree: Good (UPI Autopay, cards)
- PayU: Good (cards, e-mandate)
- Paytm: Basic (cards)
- Instamojo: Basic (cards)
International Payments
- Razorpay: Strong multi-currency support
- Cashfree: Good, with higher fees
- PayU: Strong, enterprise-grade
- Paytm: Limited
- Instamojo: Limited
Payment Links
All major providers offer payment links that you can share via WhatsApp, email, or SMS. Razorpay and Cashfree have the most feature-rich implementations.
Developer Experience
- Razorpay: Best-in-class documentation, SDKs for all major languages, sandbox testing
- Cashfree: Good documentation, improving rapidly
- PayU: Adequate but can be complex
- Paytm: Good documentation
- Instamojo: Simple APIs, good for basic use cases
Which Payment Gateway Should You Choose?
Choose Razorpay if: You are a startup, SaaS business, or tech company that needs robust APIs, subscriptions, and the most comprehensive feature set.
Choose Cashfree if: You want lower transaction fees, need payout capabilities, or run a marketplace business.
Choose PayU if: You are a large business that needs enterprise support and custom pricing.
Choose Paytm if: Your customers are primarily in tier 2/3 cities and heavily use Paytm for payments.
Choose Instamojo if: You are a small business or creator who wants the simplest setup without any technical work.
Choose PhonePe if: UPI is your customers’ dominant payment method and you want the highest UPI success rates.
Using Multiple Gateways
Many businesses use more than one payment gateway:
- A primary gateway for most transactions
- A backup gateway for redundancy (if the primary goes down)
- Different gateways for different use cases (domestic vs international, one-time vs subscriptions)
This adds complexity but ensures you never lose a sale due to a payment gateway outage.
Getting Started
Once you choose a gateway, the setup process is:
- Sign up on the provider’s website
- Complete KYC verification (PAN card, bank details, business documents)
- Integrate the gateway with your website or app
- Test transactions in sandbox mode
- Go live
KYC verification typically takes 2-5 business days.
Integrate Payments into Your Website
Choosing the right payment gateway is just the first step. Proper integration ensures a smooth checkout experience for your customers. Contact 24Bit System to integrate the payment gateway of your choice into your website or e-commerce store.
