Payment Gateways for Ecommerce in India
Razorpay is the usual first payment gateway for an Indian online store: one checkout for UPI, cards, net banking and wallets, a 2% platform fee plus 18% GST on the fee, no setup or annual charge, and T+1 settlement. Cashfree, PayU, CCAvenue, Paytm and PhonePe are the common alternatives.
For Indian store owners choosing, onboarding and testing a payment gateway on WooCommerce or another e-commerce platform.
knowledge
- Read time
- 4 min
- Sections
- 8
- Updated
- 14 Nov 2026
- Written by
- WebJi® team
Last editorial update: 14 November 2026. Prices follow the dated sources on this page; checkout confirms current charges.
How does a payment gateway work in an Indian online store?
A payment gateway carries the buyer's UPI, card or net-banking payment from your checkout to the bank, then settles the money, minus its fee, into your business account. Card details go to the gateway's hosted page, not to your server; your store only receives a signed confirmation.
- The buyer chooses UPI, card, net banking or a wallet on the checkout page.
- The gateway sends the request to the bank, card network or UPI app for approval.
- A webhook from the gateway marks the order as paid in your store.
- After the settlement cycle, the net amount reaches your current account.
Step three is where most real-world problems sit: a blocked or misconfigured webhook leaves a paid order showing "pending". The WooCommerce checkout troubleshooting guide covers the usual fixes.
Which payment gateways do Indian e-commerce stores use?
Razorpay is the usual first choice for a new Indian store because it covers UPI, cards, net banking and wallets in one checkout and has official WooCommerce and Shopify integrations. Cashfree, PayU, CCAvenue, Paytm and PhonePe are the common alternatives, each with its own rate card.
| Gateway | Often chosen for | Check before signing |
|---|---|---|
| Razorpay | New WooCommerce or Shopify stores wanting every method in one checkout | Published 2% platform fee, T+1 settlement[1] |
| Cashfree | Stores that also need payouts to vendors or refunds at scale | Rate per method, payout pricing |
| PayU | Larger catalogues and EMI-heavy baskets | EMI and card rates, settlement cycle |
| CCAvenue | Wide list of payment options and international cards | Any annual or setup charge |
| Paytm, PhonePe | Buyers already living in those apps; UPI-heavy carts | UPI pricing and plugin support |
Only Razorpay's figures are quoted here because they were read from its own pricing page; read the others on their official pricing pages on the day you compare, as rates change. Many stores run a second gateway as a fallback when the first has an outage.
What do payment gateway charges in India actually cost a store?
Razorpay's standard plan, read on 14 November 2026, charges a 2% platform fee per successful domestic transaction plus 18% GST on that fee, with no setup, annual or refund fees. On a ₹2,000 order that is ₹40 + ₹7.20 GST = ₹47.20.[1]
| Payment type | Fee | Cost on a ₹2,000 order incl. GST on fee |
|---|---|---|
| Domestic cards, net banking, wallets | 2% | ₹47.20 |
| UPI and RuPay debit | Zero MDR, 2% platform fee | ₹47.20 |
| Corporate or business credit cards | 2.15% | ₹50.74 |
| International cards | Up to 3% | Up to ₹70.80 |
"Zero MDR on UPI" means no bank interchange is charged under RBI policy; the gateway can still bill a technology or platform fee, so read the full rate card rather than the headline. GST applies only to the fee, never to the order value. Instant settlement and custom rates for stores above ₹5,00,000 a month are priced separately. The wider budget, including hosting and build, is in the e-commerce website cost guide.
Which payment methods should an Indian checkout offer?
Offer UPI first, then debit and credit cards, then net banking, and keep cash on delivery available for first-time buyers if your margins allow. Indian buyers abandon carts most often when the payment step sends them away to another app and the cart is lost on return.
- UPI intent and QR: app-switch on mobile, a QR code on desktop.
- Saved cards: RBI rules require card-on-file tokenisation; use the gateway's token feature, never store card numbers.
- EMI: worth enabling for baskets above a few thousand rupees.
- Final amount: show shipping and tax before the payment screen.
The UPI set-up for WooCommerce, including QR on desktop, is in UPI payments on WooCommerce. If you have not yet chosen between a marketplace and your own store, read how to sell products online in India.
What documents does payment gateway KYC need in India?
Expect to submit PAN, a bank account in the business name, proof of business, GSTIN where registered, and a live website showing products, prices, terms, shipping and refund policies. Approval usually follows within a few working days once documents are complete.
- Sole proprietor
- Personal PAN, a current or business account, and one proof of business such as GST or Udyam registration.
- Partnership or LLP
- Firm PAN, partnership deed or LLP agreement, and partner KYC.
- Private limited company
- Company PAN, certificate of incorporation, and director KYC.
Reviewers check the website itself, so build the store and its policy pages first and start KYC in parallel rather than after launch.
How do you add a payment gateway to WooCommerce?
Install the gateway's official plugin, enter test API keys, confirm a test order turns to "Processing" through the webhook, then switch to live keys and run one small real payment per method. Test UPI on its own; most buyers will use it.
- Install the plugin published by the gateway and enable it under WooCommerce → Settings → Payments.
- Paste the test key ID and secret, and register the webhook URL shown in the plugin in the gateway dashboard.
- Place a test order; it must move to Processing without a manual refresh.
- Switch to live keys, pay ₹1 or a small amount by UPI and by card, then refund both.
- Repeat the test on a staging copy after every plugin or WooCommerce update.
The detailed Razorpay walk-through is in Razorpay for WooCommerce. The gateway is a plugin, not a hosting feature, but checkout speed depends on the server; WooCommerce hosting is sized for that. A WebJi® store build includes live test orders through each payment mode before handover.
How do you keep an Indian checkout PCI-DSS safe?
Use the gateway's hosted or embedded checkout so card data never touches your server; that keeps a small store in the lightest PCI-DSS scope. Then force HTTPS on every page and keep the plugin updated.
Store only the gateway's payment ID and the last four digits that it returns. Rotate API keys if a developer leaves, and watch for a sudden rise in failed payments, which more often means an expired key or broken webhook than fraud. A valid SSL certificate across the whole site is something gateway reviewers expect to see.
Sources
- Razorpay India pricing, razorpay.com/pricing — 2% platform fee on domestic instruments, 18% GST on the fee, ₹0 setup and AMC, T+1 settlement, international cards up to 3%. Read on 14 November 2026.
Figures about other companies were read on the date shown and may change without notice. WebJi® is not affiliated with, and is not the support desk of, any company named on this page.
Frequently asked questions
Can I accept payments without a GST registration?
Many gateways onboard sole proprietors below the GST threshold with PAN, a bank account and another proof of business. Whether you must register for GST depends on turnover and what you sell, so check with your accountant before launch.
Is the gateway fee itself eligible for GST input credit?
Usually yes for a GST-registered business, because the gateway issues a tax invoice for its fee and the 18% GST on it. Download the monthly invoice from the dashboard and give it to your accountant with your purchase records.
Can one store use two payment gateways at the same time?
Yes. WooCommerce can show both at checkout, or you can keep the second hidden as a fallback for outages. Each needs its own KYC, keys and webhook, and reconciliation takes a little longer at month end.
How do refunds work through a payment gateway?
You issue the refund from WooCommerce or the gateway dashboard, and money returns to the original method. Razorpay lists normal refunds at no fee and charges separately for instant refunds; standard refunds reach the buyer within several working days.
Last editorial update: 14 November 2026. Prices follow the dated sources on this page; checkout confirms current charges.
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