Gateway comparisons usually stop at the headline rate, which is the least differentiated thing about them. Everyone is around 2% on cards. The real differences are settlement speed, what they need from you at onboarding, how they behave during a dispute, and whether their COD remittance reporting is legible.
Here is how to compare them on the things that vary.
What each method costs you
Indicative and rounded. Rates are negotiable above a few lakh a month in volume.
| Method | Typical merchant cost | Notes |
|---|---|---|
| UPI (P2M) | 0% | The reason to make UPI the default option at checkout |
| RuPay debit | 0% on most transactions | Regulated; check current rules |
| Other debit cards | ~0.4–0.9% | Capped on small-ticket transactions |
| Credit cards | ~2% | Higher for international and premium cards |
| Netbanking | ~1.5–2% | Varies notably by bank |
| Wallets | ~1.8–2.5% | Declining in relevance |
| International cards | ~3% + forex | Plus a currency conversion spread |
| EMI | ~2–4% | Subvention cost may fall on you |
| GST on the fee | 18% of the fee | Not of the transaction. Frequently forgotten |
Settlement: the part that affects your cash flow
| Cycle | What it means | Typical cost |
|---|---|---|
| T+2 | Money in your bank two working days after capture | Standard |
| T+1 | One working day | Paid add-on |
| Same day / instant | Within hours, usually capped | Paid, often a percentage |
| COD remittance | Days after the courier collects — varies by courier, not gateway | Built into courier pricing |
Two things that catch sellers out:
- Working days, not days. A Friday evening sale settles on Tuesday. A long weekend makes it Wednesday.
- A rolling reserve. Newer merchants in higher-risk categories sometimes have a percentage held back for a period. Ask about this before you sign, not after your first big week.
What you need to get approved
Onboarding fails more often than people expect, and almost always for the same reasons.
How to compare providers honestly
Ask every provider these seven questions, in writing, before you integrate.
What is the all-in rate per method, including GST?
Get it per method. A blended "2%" hides a lot.
What is the standard settlement cycle, and what does faster cost?
And whether there is a rolling reserve for a new merchant in your category.
What is the chargeback process and fee?
How long do I have to respond, what evidence do you accept, and what do you charge per dispute regardless of outcome?
What is the refund flow?
Is the original fee refunded when I refund a customer? Usually not — which means every refund costs you the fee twice over.
What does the reconciliation report look like?
Ask for a sample. You will read it every week for years. Illegible reports cost real hours.
Do you support UPI intent, UPI collect, and a saved-card flow?
Checkout friction on mobile is where Indian carts are lost.
What is the support channel and response time when money is stuck?
The honest test is not the happy path. It is the Tuesday when ₹40,000 has not settled.
Reducing payment costs without annoying customers
- Make UPI the default and the first option shown. Most Indian buyers prefer it anyway, and it is free to you.
- Do not add a card surcharge. It is usually against network rules and always costs you goodwill.
- Do offer a prepaid discount over COD. This is a different thing from a card surcharge and it works — see cutting RTO.
- Turn off methods nobody uses. Every extra logo at checkout is a decision, and decisions cost conversions.
- Renegotiate at ₹5 lakh a month. Rates are not fixed; nobody offers a better one unprompted.
Chargebacks, briefly
A chargeback is a customer disputing a charge with their bank rather than asking you for a refund. It is rare in India relative to card-heavy markets, and unpleasant when it happens.
What protects you:
- Delivery proof. Signed POD or a delivery scan tied to the order.
- A clear billing descriptor. If your bank statement line says something unrecognisable, disputes go up.
- Fast, documented communication. Saved messages showing you offered a resolution.
- Accurate product pages. "Not as described" is the most common category, and it is the one you control.
Respond inside the window, every time, even when you expect to lose. A pattern of unanswered disputes affects your standing with the gateway.
Frequently asked questions
Which payment gateway is best for a small business in India?
For most small stores the differences are marginal — pick on onboarding speed, settlement cycle and the legibility of the reconciliation report. What matters far more is that UPI works cleanly on mobile, because that is where most of your payments will come from.
Do I pay a fee on UPI payments?
Generally no merchant discount rate applies to UPI person-to-merchant transactions under current rules. Your gateway may charge for platform features around it, so confirm what is and is not included.
How long does it take to receive money from online sales?
Standard is two working days after the payment is captured. Faster settlement is available as a paid feature. Cash-on-delivery money follows the courier's remittance cycle instead, which is usually longer.
Can I accept payments without GST registration?
Yes. Gateways ask for GSTIN if you have one, but registration is generally not a precondition for accepting payments. The tax treatment of your sales is a separate question — see the GST guide.
What happens if a payment succeeds but the order fails?
The amount is auto-refunded within a few working days in most cases. Keep the gateway's transaction ID against the failed order so you can answer the customer immediately instead of asking them to wait and see.
Should I use a payment link instead of a gateway?
For your first ten orders, absolutely. Links are quicker to set up and let you validate the product. Move to a proper checkout once manually sending links starts costing you orders at 11 pm.