What do payment gateways charge in India?

Across the 9 gateways we verified, standard domestic rates cluster around 2% per successful transaction (range 1.95%–2.5%), with no setup or monthly fee on standard plans. Crucially, 18% GST is charged on the fee, so a "2%" gateway actually costs about 2.36% all-in. On Rs.5,00,000 of monthly sales that is roughly Rs.11,800/month, or Rs.1,41,600/year.

Is GST charged on payment gateway fees?

Yes. 18% GST applies on the gateway fee itself, not the transaction amount. So a 2% gateway fee becomes an effective 2.36% once GST is added. Registered businesses can usually claim it as input tax credit, but it is still real cash out the door each month.

Do payment gateways charge for UPI in India?

Often, yes — even though UPI's underlying merchant rate (MDR) is legally zero. Many gateways charge their flat rate (~2%) on UPI just like cards. That means a UPI-heavy business on a flat-rate gateway pays card-level fees on near-free transactions: about Rs.11,800/month on Rs.5,00,000 of UPI-dominant sales, versus ~Rs.1,475 for the underlying cost — roughly Rs.1,23,900/year of overpayment. Gateways with UPI-specific or category-based pricing (PhonePe, Paytm) can be far cheaper for UPI-dominant merchants.

Which payment gateway is cheapest in India?

It depends on how your customers pay, not just the headline rate. Within the 1.95%–2.5% band the gateways are close; your payment-method mix swings the real cost more. A UPI-heavy merchant should prioritise a gateway with low UPI/category pricing; a card-heavy merchant pays roughly the same ~2% almost everywhere. Always confirm current rates and any promotional pricing on the vendor's own page.

Are there setup or annual fees for payment gateways in India?

Most standard plans have no setup, annual, or maintenance fee — you pay only per successful transaction. Some gateways (e.g. CCAvenue) offer optional plans that trade an upfront/annual fee for a lower transaction rate, which can pay off at high volume. International transactions cost more (typically up to 3%+).

FindThatSoftwareData study

What Payment Gateways Really Cost in India

Every gateway quotes a tidy ~2% per transaction. Your real cost is higher — and which gateway is cheapest depends on how your customers pay, not the headline rate. We verified the per-transaction charges of 9 India gateways and computed what merchants actually pay, including the 18% GST most comparisons ignore. Updated June 2026.

The short answer

Standard domestic rates cluster around 2% (1.95%–2.5% across 9 verified gateways), with no setup or monthly fee. Add 18% GST on the fee and the real cost is about 2.36%. The bigger trap: 5 of 9 charge a flat rate even on UPI, whose underlying MDR is zero — so a UPI-heavy merchant on a flat-rate gateway overpays roughly Rs.1,23,900/year on Rs.5,00,000 of monthly sales. Figures exclude what input tax credit may recover.

Key findings

The headline rate hides GST. A 2% gateway costs ~2.36% after 18% GST on the fee.
UPI isn't free on most gateways. 5 of 9 charge their flat rate on UPI despite UPI's zero statutory MDR.
Payment mix beats gateway choice. The underlying cost ranges from ~0.25% (UPI-heavy) to ~1.41% (card-heavy) — a 6× swing, wider than the gap between any two gateways.
Gateways differ in model. 5 use one flat rate; 4 price by method or merchant category — which matters a lot if UPI dominates your sales.

Verified per-transaction rates

Standard domestic rate for each gateway, source-checked on the vendor's own charges page. International rates are higher; promotional and category rates are noted.

Gateway	Standard rate	After 18% GST	Pricing model
Cashfree PaymentsStandard 1.95% flat; a promotional 1.6% applies to new signups for a limited window.	1.95%	2.30%	Flat rate
PhonePe Payment Gateway~1.95% standard; UPI rates are often lower, with promotional zero-fee windows on some methods.	1.95%	2.30%	By method
Paytm Payment GatewayVaries by merchant category: ~1.20% utilities/government/education, ~1.40% grocery/kirana, ~1.99% other.	1.99%	2.35%	By category
RazorpayFlat 2% across cards, UPI, net banking and wallets on the Standard plan; international up to 3%.	2%	2.36%	Flat rate
EasebuzzMethod-differentiated: ~2.5% UPI, ~1.2% debit cards, ~2.2% credit cards; T+1 settlement.	2%	2.36%	By method
PayU~2% on standard methods, varying by method and volume.	2%	2.36%	Flat rate
CCAvenue~2% on domestic cards/net banking; optional plans trade a setup/annual fee for lower transaction rates.	2%	2.36%	Flat rate
Instamojo~2–5% depending on method; free to start with optional paid add-ons.	2%	2.36%	By method
Stripe~2–3% plus a small flat fee; higher for international cards and currency conversion.	2.5%	2.95%	Flat rate

What you actually pay, by monthly sales

Using the typical (median) 2% rate, here is the monthly fee plus 18% GST at three levels of monthly GMV (total transaction value).

Monthly sales (GMV)	Gateway fee	+ 18% GST	Total / mo	Per year
Rs.1,00,000A small shop or early D2C store	Rs.2,000	Rs.360	Rs.2,360	Rs.28,320
Rs.5,00,000A growing online business	Rs.10,000	Rs.1,800	Rs.11,800	Rs.1,41,600
Rs.25,00,000A high-GMV seller or marketplace	Rs.50,000	Rs.9,000	Rs.59,000	Rs.7,08,000

The UPI trap: paying card rates on free rails

UPI's statutory merchant rate is zero, yet most flat-rate gateways still charge their full ~2% on UPI. For a business where 8 in 10 payments are UPI, that is a large, avoidable cost.

Flat-rate gateway

Rs.11,800/mo

2% on Rs.5,00,000 of UPI-dominant sales, incl. GST

Underlying UPI-heavy cost

Rs.1,475/mo

~0.25% effective for an 80% UPI mix, incl. GST

That is roughly Rs.10,325/month — Rs.1,23,900/year — in avoidable fees. If UPI dominates your sales, prioritise a gateway with UPI-specific or category-based pricing over a flat rate.

Why payment mix matters more than the gateway

The underlying cost of accepting a payment depends heavily on the method (UPI ~0%, debit ~0.9%, credit ~2%, net banking ~1.2%). Here is the blended underlying rate for three common customer mixes.

Customer mix	UPI / Debit / Credit / Netbank	Underlying rate
UPI-heavyKirana, D2C, services — customers mostly pay by UPI	80% / 10% / 5% / 5%	0.25%
BalancedA typical online store with a mix of methods	50% / 15% / 25% / 10%	0.76%
Card-heavyTravel, electronics, B2B — mostly credit cards	20% / 10% / 60% / 10%	1.41%

Methodology

Rates are the representative standard domesticper-transaction charges of the payment gateways in the FindThatSoftware catalog, each confirmed on the vendor's own pricing/charges page (June 2026) — a verified sample, not a market census. Promotional and category-specific rates are noted, not silently averaged. GST is the statutory 18% applied to the gateway fee. The payment-mix model uses realistic India per-method costs (UPI's statutory MDR is zero; cards and net banking carry real interchange) to show the direction and size of the effect, and is illustrative, not a vendor quote. International transactions and chargeback/settlement options are out of scope. Cite as "FindThatSoftware Payment Gateway Cost Study (India, 2026)."

Frequently asked questions

What do payment gateways charge in India?: Across the 9 gateways we verified, standard domestic rates cluster around 2% per successful transaction (range 1.95%–2.5%), with no setup or monthly fee on standard plans. Crucially, 18% GST is charged on the fee, so a "2%" gateway actually costs about 2.36% all-in. On Rs.5,00,000 of monthly sales that is roughly Rs.11,800/month, or Rs.1,41,600/year.
Is GST charged on payment gateway fees?: Yes. 18% GST applies on the gateway fee itself, not the transaction amount. So a 2% gateway fee becomes an effective 2.36% once GST is added. Registered businesses can usually claim it as input tax credit, but it is still real cash out the door each month.
Do payment gateways charge for UPI in India?: Often, yes — even though UPI's underlying merchant rate (MDR) is legally zero. Many gateways charge their flat rate (~2%) on UPI just like cards. That means a UPI-heavy business on a flat-rate gateway pays card-level fees on near-free transactions: about Rs.11,800/month on Rs.5,00,000 of UPI-dominant sales, versus ~Rs.1,475 for the underlying cost — roughly Rs.1,23,900/year of overpayment. Gateways with UPI-specific or category-based pricing (PhonePe, Paytm) can be far cheaper for UPI-dominant merchants.
Which payment gateway is cheapest in India?: It depends on how your customers pay, not just the headline rate. Within the 1.95%–2.5% band the gateways are close; your payment-method mix swings the real cost more. A UPI-heavy merchant should prioritise a gateway with low UPI/category pricing; a card-heavy merchant pays roughly the same ~2% almost everywhere. Always confirm current rates and any promotional pricing on the vendor's own page.
Are there setup or annual fees for payment gateways in India?: Most standard plans have no setup, annual, or maintenance fee — you pay only per successful transaction. Some gateways (e.g. CCAvenue) offer optional plans that trade an upfront/annual fee for a lower transaction rate, which can pay off at high volume. International transactions cost more (typically up to 3%+).

Source: FindThatSoftware catalog analysis, June 2026. Rates change and promotional pricing is time-limited; figures reflect verified vendor pricing at time of writing. Cite as "FindThatSoftware Payment Gateway Cost Study (India, 2026)".