Cost Examples and Choosing an Acceptance Set-up
Payment gateway charges in India: pricing models, fixed fees and add-ons explained
How online payment gateways and aggregators price UPI, cards, net banking, wallets, EMI and international payments in India, with illustrative sums and the questions to ask.
Online payment gateways in India usually charge a percentage per payment, set by payment method, sometimes with a fixed fee per transaction, plus optional charges for set-up, annual maintenance, instant settlement, international cards, EMI, refunds and chargebacks, all before 18% GST. Most offer a standard plan for small merchants and custom pricing for larger ones. The legal zero charge on RuPay debit cards and UPI payments up to ₹2,000 applies online too; gateways may not charge for the payment itself on those methods, though they may price separate services. The cheapest gateway for one business can be the dearest for another, depending on the mix of methods and ticket sizes. This guide explains the models with illustrative numbers; for a specific provider, read its current pricing page and your written offer. It belongs to the best-fit method.
Pricing models
| Model | How it looks | Good for | Watch out for |
|---|---|---|---|
| Flat percentage across methods | "x% on all domestic payments" | Simplicity | Overpaying on UPI and debit |
| Per-method rates | UPI, debit, credit, net banking, wallets, international priced separately | Most online businesses | Many lines to compare |
| Percentage + fixed fee | "x% + ₹y per transaction" | Larger tickets | Expensive for small tickets |
| Custom or negotiated | Rates set for your volume | High-volume merchants | Renewal and minimum-volume clauses |
| Subscription bundle | Monthly fee including some volume | Steady volumes | Unused allowance |
Typical cost elements
| Element | Notes |
|---|---|
| UPI | Free up to ₹2,000 by law; select payments above ₹2,000 to carry UPI MDR once implemented |
| RuPay debit | Free by law |
| Other debit cards | Within RBI caps |
| Credit cards | Higher; premium and corporate cards may cost more |
| International cards | Higher; may include currency conversion |
| Net banking | Varies by bank |
| Wallets | Varies; PPI interchange may apply on UPI-routed wallet payments above ₹2,000 |
| EMI (card and cardless) | Often much higher; check who bears the interest subsidy in "no-cost EMI" |
| Set-up and annual fees | Increasingly waived on standard plans; check |
| Instant settlement | Extra percentage |
| Refund fee | Some charge; ask whether MDR is returned |
| Chargeback fee | Per dispute, often charged even if you win |
| Payment links, invoices, subscriptions | Same rates or extra product fee |
Worked example: same sales, two pricing styles (illustrative)
An online shop sells ₹8,00,000 a month across 1,000 orders (average ₹800).
| Method | Sales | Per-method rates | Fee |
|---|---|---|---|
| UPI up to ₹2,000 | ₹4,80,000 | 0% | ₹0 |
| RuPay debit | ₹40,000 | 0% | ₹0 |
| Other debit | ₹80,000 | 0.9% | ₹720 |
| Credit cards | ₹1,60,000 | 2.0% | ₹3,200 |
| Net banking | ₹40,000 | 1.9% | ₹760 |
| Total | ₹8,00,000 | ₹4,680 |
Alternative offer: a flat 1.0% on other debit cards, credit cards and net banking, plus ₹2 per transaction. The charged sales are ₹80,000 + ₹1,60,000 + ₹40,000 = ₹2,80,000, so the percentage part is ₹2,800.
| How the ₹2 fixed fee is applied | Transactions | Fixed part | Total fee |
|---|---|---|---|
| Only on charged methods (about 400 orders) | 400 | ₹800 | ₹3,600 |
| On every order, including UPI and RuPay debit | 1,000 | ₹2,000 | ₹4,800 |
Applied only to charged methods, the alternative is ₹1,080 cheaper than the per-method offer. Applied to every order, it is dearer, and a fee on UPI payments up to ₹2,000 or RuPay debit payments would itself be a charge on a zero-charge mode. Ask the provider to confirm in writing how the fixed fee works. Always model your own mix with the MDR fee calculator.
Fixed fees and small tickets
| Ticket | 2% | ₹3 fixed | Total | Effective rate |
|---|---|---|---|---|
| ₹200 | ₹4 | ₹3 | ₹7 | 3.5% |
| ₹1,000 | ₹20 | ₹3 | ₹23 | 2.3% |
| ₹10,000 | ₹200 | ₹3 | ₹203 | 2.03% |
If your average order is small, a fixed fee matters more than the percentage.
Hidden costs to model
- Failed payments: no fee usually, but lost sales; ask about retry flows.
- Refunds: if MDR is not returned, a 10% refund rate adds 10% to your MDR on those sales.
- Chargebacks: fee per case plus the lost sale if you lose; see chargebacks.
- Rolling reserves for new or high-risk merchants.
- Currency conversion on international payments.
- Developer time to integrate and maintain a checkout.
The online store example builds these into a monthly total.
Questions for every gateway
- Rates per method and per card type, in writing, dated.
- Does any fixed fee apply to UPI up to ₹2,000 or RuPay debit? (It should not, as a charge for the payment.)
- How will the UPI MDR above ₹2,000 be applied and shown?
- Refund and chargeback fees; is MDR returned on refunds?
- Settlement cycle and instant settlement cost.
- Rolling reserve, if any, and when it is released.
- Is checkout hosted or tokenised so you never store card data?
- Is the company an RBI-authorised payment aggregator (PA-O)?
FAQ
Are set-up fees normal?
Many standard plans waive them; custom plans may include integration or onboarding fees. Ask for any fee in writing.
Can a gateway change prices?
Yes, according to the agreement. Look for a notice period and the right to exit.
Is a gateway the same as a payment aggregator?
Often the same company performs both roles. The PA is the regulated entity that handles funds; see payment aggregator rules.
Are international payments regulated differently?
Cross-border collection uses PA-CB rules and FEMA; pricing usually includes higher network fees and conversion.
Sources
- Reserve Bank of India — Master Direction on Payment Aggregators and the list of authorised PAs
- NPCI — UPI and RuPay rules
- Department of Financial Services — section 10A notification and UPI MDR FAQ
- CBIC GST — GST on gateway fees
