Payment gateway for website in India: fees and how to start

Short answer: A payment gateway for a website lets customers pay by UPI, card, net banking or wallet on your own site and sends the money to your bank, usually one to three working days later. Standard plans from Razorpay, Cashfree, PayU, PhonePe and Paytm have no setup fee and charge around 2% plus GST per successful payment at the time of writing, with UPI often lower or zero and international cards higher. Many small businesses do not need one yet: a UPI QR or a payment link does the job until customers must pay without messaging you.

Owners ask about a payment gateway for website builds as if it were the hard part. It is not; the gateway takes an afternoon. The hard part is knowing whether you need one at all, what it costs on each sale, what paperwork is involved, and what to put around the pay button so receipts and refunds do not turn into WhatsApp arguments. This guide answers those in plain English and compares the main Indian gateways at the time of writing.

What a payment gateway does, in one line

A payment gateway is the service that takes a customer’s UPI, card, net banking or wallet payment on your website, checks it with the bank, and deposits the money in your account after deducting its fee. You never see the card details; the gateway handles all of that.

Do you actually need one on the website?

For a lot of small businesses, the honest first step is no gateway and no website at all:

• A UPI QR code or UPI ID for walk-in and WhatsApp customers. Free, instant, and every customer knows how to use it.
• A business QR from PhonePe, Google Pay or Paytm for Business, which adds a proper business name, daily reports and staff notifications.
• Payment links from Razorpay, Cashfree or Instamojo. You create a link for ₹2,500, send it on WhatsApp, and the customer pays by any method. The gateway fee applies, but there is nothing to build.

You need a gateway on the website when customers must pay on their own, without messaging you first:

1. An online store where people add products to a cart and check out.
2. Course or membership sales where access should unlock the moment payment lands.
3. Bookings and appointments with an advance to reduce no-shows.
4. Deposits and invoices for services, where a "Pay now" page beats a screenshot of a QR.

If none of those apply, start with links and a QR, and add the gateway when you build the store. Our guide on ecommerce website cost in India covers the store side.

The main gateways in India compared

Every figure below is a typical rate from public pricing pages at the time of writing. Rates differ by payment method, by category and by negotiation once your volumes grow. Check the pricing page; plans change.

Our view: Razorpay or Cashfree are the easiest starting points because every website platform has a ready plugin for them. PhonePe is worth a look if most customers pay by UPI, Instamojo suits a seller with a few products and no website, and CCAvenue and PayU tend to be chosen by larger or older businesses. You can change later.

How the charges actually work

• Percentage per successful payment. You pay only when a payment succeeds, so a failed payment costs nothing.
• Cards and net banking are commonly around 2% plus GST at the time of writing. On a ₹1,000 sale that is about ₹20 plus GST on the fee.
• UPI has been charged at zero or very low rates by most gateways under the current government zero-charge rules for UPI and RuPay debit cards. This rule has been debated, so confirm it is still in place when you sign up.
• International cards are typically around 3% or more, plus currency conversion, and need extra approval from the gateway.
• GST on the fee. The fee itself attracts GST, which is why "2%" ends up nearer 2.4% of the sale.

Build the fee into your prices. At ₹2 lakh of monthly sales, 2% plus GST is roughly ₹4,000 to ₹5,000 a month, which is a real cost line.

Documents you need

Gateways run a KYC check before they let you accept payments. Typically:

• PAN of the business, or of the proprietor for a sole proprietorship.
• A bank account in the business name (or the proprietor’s name for a proprietorship).
• Business proof: GST certificate, Udyam (MSME) registration, shop and establishment licence, or company incorporation papers.
• GST number. Generally required for companies and partnerships. For sole proprietors, some gateways accept an application without GST for certain categories at the time of writing, but this varies by gateway and product type. Confirm on their checklist and ask your accountant.
• A website or app that already exists, with visible contact details, terms, privacy, refund and shipping policies. Gateways look for these pages before approving live payments, so have them ready.

Approval usually takes a few working days if the documents are clean; a mismatch between PAN name, bank name and business name is the most common cause of delay.

Settlement, refunds and chargebacks

• Settlement is when the gateway pays you. Typically T+1 to T+3, meaning one to three working days after the payment, minus the fee. Weekends and bank holidays push it out. Instant or same-day settlement is offered by several gateways for an extra charge.
• Refunds are issued from your dashboard and reach the customer in roughly five to seven working days for cards, faster for UPI. The gateway’s fee on the original payment is often not returned, so a refunded ₹1,000 sale can still cost you about ₹24.
• Chargebacks happen when a cardholder disputes a payment with their bank. The gateway asks you for proof: order details, delivery proof, chat history. If you cannot show it, the money is reversed, so keep records of every order and delivery.

What "free payment gateway" really means

The search "free payment gateway for website" has thousands of results, and every one of them means the same thing: no setup fee and no monthly fee. None of them means no charge per transaction. Card networks and banks charge the gateway, and the gateway charges you. The only genuinely free way to receive money is direct UPI to your own account, which is fine for a shop counter and useless for an online checkout.

What to add on the website around the payment

Customers judge the whole flow, not just the button:

1. A clear price before the button, including GST and delivery, so nothing changes at checkout.
2. The gateway’s hosted checkout page rather than a custom-built card form. It is safer and it is what the gateway approved.
3. An order confirmation page with an order number, what was bought and what happens next.
4. A confirmation email and a WhatsApp message with the receipt. The WhatsApp one gets read; the email is the record. Our WhatsApp Automation service can send these automatically from the official API.
5. A failed-payment path. A plain message saying "Payment did not go through, try again or pay by UPI here", and a follow-up message an hour later if the order is still unpaid.
6. Terms, refund and shipping policy pages linked in the footer, because the gateway requires them and customers look for them.

Security basics for a non-technical owner

• Never store card details anywhere: not on your site, not in a sheet, not in a chat. Use the gateway’s hosted page and let them carry that responsibility.
• Use HTTPS on the whole site, which is free on every modern host.
• Verify payments on the server, not from a "success" page. A developer should confirm each order against the gateway’s record before marking it paid.
• Keep the dashboard login safe with two-factor authentication and separate staff logins, and never leave the store in test mode.

Common mistakes

• Using a personal UPI QR for a registered business. Payments land in a personal account, GST reporting gets messy, and the customer sees a person’s name instead of the shop.
• Business name mismatch. If the name on the checkout page or bank statement differs from your shop name, customers hesitate and chargebacks rise. Set the display name in the gateway dashboard.
• Ignoring failed payments. In our experience a large share of dropped checkouts are simply people whose UPI timed out. One WhatsApp message recovers many of them.
• Not testing on a phone. Most Indian customers pay on mobile. Place a real ₹10 order yourself before launch.
• Choosing by the lowest advertised rate alone. A tenth of a percent matters less than a plugin that works and support that answers.

If you are also deciding between a marketplace and your own store, our post on selling on Amazon, Flipkart, Meesho or your own website compares the fees side by side.

What we charge

Gateway integration is part of any online store or booking site we build, not a separate product. Our Growth package under Business Websites is ₹49,999 one-time for up to 12 pages, a blog section, full SEO setup and speed tuning, with three months of free small changes; it suits a services business that wants a "Pay now" page, payment links or a booking deposit. A full online store with cart, checkout, stock and courier integration is quoted per project, as explained in our ecommerce website cost guide.

In both cases the gateway account is opened in your name, the gateway’s own fees are paid by you directly to the gateway, and we list every monthly cost before you pay us. All fixed prices are on the pricing page.

The short version

A payment gateway takes customer payments on your website and settles them to your bank in one to three working days, for around 2% plus GST per successful payment at the time of writing, with UPI often cheaper and no setup fee on standard plans. Start with a UPI QR or payment links if customers already message you before paying, and add a gateway when you launch a store, course, booking or deposit page. Keep your PAN, bank account and business proof consistent, use the gateway’s hosted checkout, send a WhatsApp receipt, and follow up every failed payment.