Razorpay, PayU, Cashfree, CCAvenue, PhonePe, Paytm and Stripe — what each really costs to take a payment online in India, why UPI changes the whole calculation, and how GST and the headline rate fit together.
🇮🇳 India edition. Selling from elsewhere? Read the US, UK or Australia version.
Payment processing is one of the few costs an Indian online business pays on every sale — but India is unlike any other market, because of two things most comparisons gloss over: UPI, which has been effectively free, and 18% GST, which is added to every gateway fee. Get those two right and the rest is a fairly tight race around 2%. Here is how the major Indian payment gateways compare in 2026, what a real sale costs once GST is counted, and the UPI rule change every merchant should know about.
These are standard published online rates for domestic transactions, before 18% GST (which every provider adds). Most gateways negotiate real rates by volume after KYC, so treat these as entry rates:
| Gateway | Standard domestic rate | Best known for |
|---|---|---|
| Razorpay | 2.0% | Developer-first, broadest stack |
| PayU | 2.0% | High success rates, enterprise |
| Cashfree | 1.95% | Fast settlements + payouts |
| CCAvenue | 2.0% | Most payment options, multi-currency |
| PhonePe PG | from 1.99% | UPI dominance |
| Paytm PG | 1.99% (UPI/RuPay 0%) | 0% UPI + wallet ecosystem |
| Instamojo | 2% + ₹3 (Growth) | No-code for micro-merchants |
| Stripe (India) | 2.0% (invite-only) | Exporters / international cards |
UPI and RuPay debit are frequently 0% (see below). International cards run around 3%. Add 18% GST to every fee.
UPI is India's defining advantage. For years it has carried zero MDR — free for the merchant — which is why a UPI-heavy store can run at a far lower effective cost than a card-heavy one anywhere else in the world. That is changing, slightly, and it is worth knowing before you choose.
From 15 October 2026, a 0.4% MDR applies to person-to-merchant UPI payments above ₹2,000, capped at ₹300 per transaction. Payments of ₹2,000 or less, all person-to-person transfers, and small merchants receiving up to ₹1 lakh a month via UPI stay at 0%. So for the typical small basket UPI is still free; only larger UPI sales start to carry a small charge — and whether each gateway passes that through to merchants is still settling. For most stores, UPI remains the cheapest rail by a wide margin.
A headline "2%" is never what you pay, because 18% GST sits on top of the fee. The honest figure is about 2.36%. On a card sale:
The lesson: in India the biggest lever on your payment costs is not which gateway you pick — they cluster around 2% — but how much of your volume runs on UPI. Encouraging UPI at checkout does more for your margin than shaving 0.05% off a card rate.
The default for Indian startups and developers. Razorpay charges a unified 2% across domestic cards, UPI, netbanking (72+ banks), wallets and EMI, with corporate cards at 2.15% and international around 3%. There is no setup fee and no annual maintenance, settlement is T+1 (instant settlement is a paid add-on), and the appeal is the breadth of the stack around the payment — subscriptions, payment links, payouts (RazorpayX), smart routing and clean APIs. For anyone building a custom or headless checkout, that programmability is the draw.
PayU matches Razorpay at 2% on domestic Visa/Mastercard (Amex, Diners and international around 3%), with no setup or annual fees, and is known for high transaction success rates and enterprise optimisation like smart retries. Cashfree is marginally cheaper at 1.95% on cards (international 2.99%), with a strong payouts suite and fast settlements — and a time-limited offer of 0% platform fee for new merchants through March 2027, worth checking while it lasts. CCAvenue, the oldest gateway, bundles the widest payment coverage (200+ options, 27 currencies) at 2% on its Startup Pro plan, with international at 3% and Amex/Diners at 4% — but note it is the one mainstream gateway with an annual charge (about ₹1,200 a year, waived the first year), where its rivals have none.
PhonePe Payment Gateway leans on India's largest UPI app, with introductory card pricing from 1.99% and zero setup or maintenance — strong if your customers pay mostly by UPI. Paytm Payment Gateway markets 0% on UPI and RuPay, 1.99% on credit cards and netbanking, plus its wallet ecosystem — a good fit for consumer-facing and QR-led businesses. Instamojo is the easiest no-code route for solo sellers: its Growth plan is 2% + ₹3 per transaction, but note the flat ₹3 hurts small tickets and the entry (Lite) plan is a steep 5% unless you buy a paid plan.
Worth a clear note, because Stripe is the global default elsewhere: in India it has been invite-only since 2024 and remains so. Indian Stripe accounts are card-only — no UPI or netbanking collection — at about 2% domestic and 3–4.3% international. That makes Stripe a tool for Indian exporters taking international card payments, not for domestic Indian ecommerce, where the UPI-capable local gateways are essential.
The pattern: Indian gateways cluster around 2% on cards, so the real differences are UPI pricing, settlement speed, GST, and the breadth of the stack — not a race to the lowest card percentage.
The biggest shift in ecommerce is separating the storefront from the commerce engine: instead of a bundled platform owning your checkout, a store runs a fast custom front end that connects to a payment gateway directly. That is the model Claude CMS builds — your pages stay self-hosted and quick, and checkout connects to your own payment account, so money settles to you with no platform taking a slice and no hosted-platform surcharge for bringing your own gateway. For an Indian store that also means being able to offer UPI, the rail that makes the whole cost model work — something a card-only global processor cannot give you here.
The keys stay yours, too. When you connect a gateway (or any service) to a Claude CMS store, the credential is sealed in Claude CMS Vault — encrypted on arrival, usable to run your checkout, never exposed. The connections hub lists the payment, shipping and email services a store can plug into, with India-specific options among them.
For an Indian store in 2026 the card rates are close enough that the decision is really about UPI, settlement speed, GST-inclusive cost and how much stack you want around the payment. The best choice is the one with the lowest total cost of running and converting your customers — and if you want a fast, self-owned, UPI-capable checkout without wiring it together yourself, that is the point of building the store with Claude.
New to this? Start with our guide to setting up your Claude ecommerce website — from an empty site to a working store with checkout connected to your own account.
About 2% on domestic cards, UPI, netbanking and wallets — Razorpay, PayU and CCAvenue near 2%, Cashfree 1.95%, PhonePe and Paytm from 1.99%. International cards about 3%. Add 18% GST, so 2% is really about 2.36%.
Effectively yes, and it's India's biggest cost advantage. From 15 October 2026 a 0.4% MDR (cap ₹300) applies to P2M UPI above ₹2,000; up to ₹2,000, all P2P, and small merchants (up to ₹1 lakh/month) stay at 0%.
Yes — 18% GST on the fee, so always compare on the GST-inclusive figure.
Only by invite, and card-only (no UPI/netbanking). It suits exporters taking international cards, not domestic Indian ecommerce.