The Tool Desk
Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →There is no universally cheapest payment gateway. The lowest headline rate can become more expensive after GST, platform charges, fixed fees, refunds, chargebacks, settlement upgrades and the end of an introductory offer. Compare each provider against your own successful-payment mix, obtain the terms in writing and calculate the all-in rupee cost.
For an Indian merchant, that means pricing standard bank-to-bank UPI, RuPay credit card on UPI where relevant, debit cards, credit cards and net banking separately. Then add taxes and every service fee you will actually use. Public rate cards are useful starting points, not a final quote: underwriting, business category, volume and negotiated terms can change what you are offered.
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What you are actually comparing
A payment gateway bill can contain more than a single percentage. Providers may describe charges as a transaction discount rate (TDR), merchant discount rate (MDR), platform fee, technology fee or payment-instrument fee. Those labels are not necessarily equivalent, so compare the rupee amount payable under the contract rather than assuming two identically worded percentages cover the same services.
Separate the payment instruments
- UPI: Ask specifically about standard bank-to-bank UPI, credit-card-on-UPI transactions and any other UPI variant your customers use. “Zero MDR” may refer only to the regulated instrument charge, while a gateway platform fee still applies.
- Cards: Request separate prices for domestic debit cards, domestic credit cards, RuPay and international cards. EMI, Amex and Diners transactions may have different rates.
- Net banking: Record its rate separately from cards even when a provider publishes one combined domestic figure.
- Other methods: Include wallets, BNPL, EMI, recurring payments or international acceptance only if your business needs them; optional methods can materially change the blended cost.
Use successful transactions as the starting base
Cashfree states that TDR is deducted for each successful transaction before settlement. PayU says GST is extra, while Razorpay says its fee and applicable GST are deducted at source. Your agreement and invoice determine whether the percentage applies to successful, captured or another defined transaction base, so have the provider state that definition in the quote.
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Published pricing examples and their qualifications
The following figures are provider-published examples accessed in 2026. They show how to read a rate card, not an independent market ranking. Rates, offers and eligibility can change; confirm them immediately before signing.
| Provider | Published example | Qualification to verify |
|---|---|---|
| Cashfree Payments | Standard domestic pricing displayed at 1.95%. Its page also displays a limited-period offer of 0% gateway fees up to ₹20 lakh GMV for eligible new merchants. International cards are listed at 2.99% for Visa/Mastercard and 2.95% for American Express. | The 0% offer is limited to eligible new merchants and has its own enrolment, qualifying-mode, cap and duration terms. Cashfree describes the platform fee separately from payment-instrument fees. Check whether the quoted rate applies to your exact UPI or card category. |
| PayU | 2% for domestic cards and net banking; 3% for EMI, Amex, Diners and international transactions. Merchant UPI pricing is said to vary by business type and volume. | GST is extra. PayU reserves the right to change prices and describes custom pricing based on volume, industry and business requirements. Standard settlement is listed as T+2. |
| Razorpay | 2% fee plus GST for successful payments; setup and annual maintenance fees are listed as zero. | Razorpay says standard bank-to-bank UPI has zero MDR but its 2% platform or technology fee still applies. Its FAQ says the fee and GST are deducted before settlement. Settlement is described as typically T+1 or instant, subject to the applicable terms. |
Sources: Cashfree official pricing, PayU official pricing and Razorpay official pricing.
How to calculate your all-in gateway cost
Use one representative month and calculate each provider separately:
All-in cost = transaction charges on successful payments by mode + applicable GST + fixed charges + optional services actually used.
Build the input sheet
- Enter gross successful volume, number of successful transactions and average ticket size.
- Split volume and transaction count among standard UPI, credit-card-on-UPI if relevant, debit cards, credit cards, net banking and any other method.
- For every method, enter the percentage rate, the transaction base, GST treatment and any per-transaction or monthly fixed fee.
- Add setup, onboarding, annual maintenance, plugin, SDK, reporting or other compulsory charges. Mark optional services, such as instant settlement, separately so you can remove them if you will not use them.
- Estimate refunds, chargebacks, disputes and failed-payment costs from the provider’s written schedule. Do not fill unknown cells with an assumed industry average.
- Model the settlement schedule and any reserve or hold requirement, then price same-day or instant settlement only if your cash-flow plan needs it.
Illustrative blended-rate calculation
Suppose a month has ₹10,00,000 of successful volume: ₹6,00,000 UPI, ₹2,00,000 domestic cards and ₹2,00,000 net banking. If a written quote charged 0.8% on UPI, 2% on cards and 2% on net banking, the pre-tax transaction charge would be ₹4,800 + ₹4,000 + ₹4,000 = ₹12,800. The blended pre-tax rate is 1.28% (₹12,800 ÷ ₹10,00,000). Add GST on the amount and any fixed or optional charges stated in that quote. This example is arithmetic, not a claim about any provider’s UPI offer.
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Repeat the calculation after replacing each rate with the provider’s actual quote. A gateway with a higher card rate can still be cheaper for a UPI-heavy merchant, while a lower headline rate can lose its advantage when a large share of customers use a higher-priced method.
UPI: why “zero MDR” needs careful reading
Razorpay’s pricing page says standard bank-to-bank UPI has zero MDR while its platform or technology fee remains applicable. PayU says merchant UPI pricing varies by business type and volume. Cashfree explains that UPI gateway charges follow applicable law and distinguishes its platform fee from fees charged for payment instruments. Therefore, ask for the total gateway charge on a successful ₹1,000 bank-to-bank UPI payment, not merely whether MDR is zero.
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Questions to put in the UPI quote
- Does the quoted percentage apply to standard bank-to-bank UPI, credit card on UPI, or both?
- Is there a platform, technology or gateway fee when the instrument MDR is zero?
- Is the fee calculated on the transaction value, a capped amount or another base?
- Is GST charged on the platform fee, the instrument fee, or both?
- Do refunds, failed attempts and disputes have separate charges?
Cards and net banking: compare categories, not a single “domestic” line
Cards
Domestic debit and credit cards can carry different economics, and international, EMI, Amex and Diners transactions may be priced separately. PayU’s published example is 2% for domestic cards and 3% for EMI, Amex, Diners and international transactions, with GST extra. Cashfree’s page displays separate international-card examples: 2.99% for Visa/Mastercard and 2.95% for American Express. Use your own card mix and ask whether the percentage includes all gateway and payment-instrument components.
Net banking
PayU’s public example groups domestic net banking with domestic cards at 2%, but another provider may quote net banking differently. Record the rate, any bank-specific surcharge, minimum or fixed fee and the settlement treatment. A merchant whose customers prefer net banking should not use a card-only rate to estimate costs.
GST, deductions and the amount you receive
GST is not an optional add-on to ignore in a comparison. PayU explicitly states that GST is extra; Razorpay says applicable GST is deducted before settlement; Cashfree describes deduction of TDR before settlement. Ask for a sample settlement statement showing gross payment, each fee, GST and net amount credited. Confirm whether the provider’s percentage is quoted before GST and whether GST is calculated on all components or only a specified fee.
Use the invoice and settlement report together
- Match the count and value of successful transactions to your order system.
- Check that each payment mode is assigned the contracted rate.
- Reconcile refunds, reversals and chargebacks to the correct reporting period.
- Verify that GST and any withholding or reserve are shown as separate deductions.
- Calculate the effective rate: total gateway deductions divided by successful gross volume.
Promotional pricing: model the offer and the post-offer period
Cashfree’s public page currently displays an eligible new-merchant offer of 0% gateway fees up to ₹20 lakh GMV for a limited period, while also displaying standard domestic pricing of 1.95%. Treat those as two different scenarios. Before relying on the promotion, obtain the offer terms covering eligibility, sign-up or enrolment dates, qualifying payment modes, the GMV cap, duration, tax treatment, and the rate after the cap or expiry.
Run two cost scenarios
- Calculate the cost during the promotional window, including any platform fee or GST that the phrase “0% gateway fees” does not remove.
- Calculate the cost after the cap or end date using the written standard or negotiated rate.
- Estimate the month in which your expected volume reaches the cap.
- Compare the weighted cost over your expected first year, rather than selecting the offer solely because its first month is cheapest.
Fees outside the percentage rate
Ask every provider for a complete schedule covering:
- Setup, onboarding and annual maintenance fees.
- Gateway, platform, technology and payment-instrument charges.
- Refund, chargeback, dispute and representment fees.
- Failed-payment, reversal or bank-return treatment.
- International, EMI, recurring-payment and currency-conversion charges if relevant.
- Paid plugins, SDK support, reports or other features your integration requires.
- Standard, same-day, instant or priority settlement charges.
- Reserve, hold or minimum-volume conditions.
PayU says it has no setup, onboarding or annual fees and that priority or same-day settlement may carry a nominal fee depending on profile. Razorpay lists setup and annual maintenance fees as zero and recommends checking refund and chargeback fees. These statements do not establish that all merchants receive identical terms, so retain the written schedule for your account.
Settlement timing and reliability belong in a separate decision
PayU lists standard T+2 settlement. Razorpay describes settlement as typically T+1 or instant, and Cashfree advertises next-day settlement for the current offer. “T+1” or “T+2” should be read with the provider’s cut-off time, bank holidays, reserve policy and eligibility conditions. If faster access to cash matters, price the acceleration service and include it in the all-in calculation.
Do not choose a gateway on an unsupported claim that it has the best success rate. The reviewed public pages do not provide comparable, independently measured success rates for the same merchant category, customer devices, banks and payment mix. Use your own pilot data or a controlled rollout, and compare failed-payment reasons rather than a single marketing percentage.
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Get comparable written quotes
Send every provider the same assumptions so the replies can be compared line by line.
Information to supply
- Business category, website or app type and expected risk profile.
- Monthly gross and successful volume, transaction count and average ticket.
- Expected percentage of UPI, debit card, credit card and net banking payments.
- Expected international, EMI, recurring or credit-card-on-UPI share.
- Required settlement schedule and any reserve or cash-flow constraints.
- Integration, reporting, reconciliation and support requirements.
Information to demand
- A mode-by-mode rate sheet for successful or captured transactions, with the base defined.
- GST treatment and a sample settlement statement.
- All fixed, optional, refund, chargeback and dispute charges.
- Promotion eligibility, cap, dates, qualifying modes and post-promotion rate.
- Settlement cut-offs, reserve terms and prices for accelerated settlement.
- The date through which the quote is valid and the process for future price changes.
PayU says custom pricing can depend on volume, industry and business requirements, and Cashfree invites custom pricing for some needs. A public webpage therefore cannot substitute for the quote applicable to your merchant account.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.A practical decision framework
- Normalize: Put every provider’s fees into the same spreadsheet columns and the same monthly payment mix.
- Calculate: Add mode-level transaction fees, GST, fixed charges and only the optional services you will use.
- Stress-test: Recalculate with a higher card share, a larger refund rate, the promotional cap reached and no promotional discount.
- Check cash flow: Compare contractual settlement timing, reserves and acceleration prices.
- Validate operations: Review reconciliation reports, refund workflow, dispute handling and integration requirements.
- Pilot: If rates are close, run a controlled period and measure your own approval, failure, refund and settlement results.
- Document: Save the signed schedule, offer terms and date-stamped rate card; public prices can change.
Common comparison mistakes
Choosing the lowest advertised percentage
A single domestic rate ignores payment mix, GST and fixed charges. Use the blended effective rate from successful volume.
Treating zero MDR as a free transaction
Instrument MDR and gateway platform fees can be separate. Request the total rupee deduction for each UPI category.
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Applying a card rate to UPI or net banking
Providers may price instruments differently. Keep separate columns and do not infer an unstated rate.
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Counting a temporary offer as a permanent price
Model the cap, expiry and post-offer rate, including any conditions that make the offer unavailable to your business.
Ignoring small fees
Refunds, disputes, instant settlement, plugins and reporting can outweigh a few basis points when transaction volume is high.
Assuming public rates are your final rates
Underwriting and negotiated pricing can change the offer. Require a written schedule tied to your merchant profile.
Bottom line: compare the rupees, not the headline
Build a provider-by-provider model using your own successful UPI, card and net-banking mix. Include GST, platform and instrument fees, fixed charges, refunds, chargebacks, settlement options and the full life of any promotion. Then verify the result against a written quote and a sample settlement statement. The cheapest gateway is the one that produces the lowest dependable all-in cost for your payment mix and cash-flow needs—not the one displaying the smallest isolated percentage.
Frequently Asked Questions
Should I compare rates using total sales or successful payments?
Start with the provider’s defined chargeable base, normally successful or captured payments, and verify it against the contract and settlement report. Do not divide fees by abandoned checkout attempts.
How can I compare a promotional rate with a negotiated rate?
Calculate the weighted cost over the period you expect to use the gateway, including the promotional cap, expiry date, taxes and the post-promotion quote. A short introductory discount may not be the lowest long-term cost.
What should I do when a provider will not disclose a UPI rate publicly?
Request a written mode-specific quote using your business category, volume and payment mix. Mark the rate as unconfirmed until the provider states the fee, GST base and any platform charge in writing.
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Only if the value of earlier cash access exceeds the acceleration charge and any reserve or eligibility cost. Compare the contractual cut-off and net settlement amount, not just the advertised speed.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
