What are the typical charges for using payment gateways in India?
Standard Transaction Charges
- Credit and debit card payments usually cost around 1.75% to 2.5% per successful transaction.
- UPI payments are generally free or charged at 0% to 1%, depending on volume and provider.
- Wallet transactions (Paytm, PhonePe, etc.) typically incur 1.5% to 2.5% fees.
- Net banking fees are usually 1% to 1.75%.
- International card payments can attract 3% to 4.5% including currency conversion charges.
Setup and Maintenance Fees
- Most modern Indian gateways offer zero setup fees for basic plans.
- Some legacy gateways (like CCAvenue) may charge a one-time setup fee of ₹1,200 to ₹3,000.
- Monthly maintenance fees may apply for premium features or higher-volume plans.
- Custom enterprise solutions have negotiable pricing based on transaction volumes.
- Freemium models are common — base features are free, advanced features are billed.
Refund and Chargeback Fees
- Refunds often carry no fee, but original gateway charges may not be reversed.
- Some gateways charge ₹300 to ₹500 per chargeback for dispute handling.
- Instant refunds may cost extra or be bundled with premium gateway plans.
- Cashbacks and reward redemptions are usually funded by the business, not the gateway.
- Chargeback success depends on merchant documentation and response time.
Payout and Settlement Fees
- Settlement cycles are usually T+1 or T+2 days (transaction date + 1 or 2 days).
- Instant settlement features may incur a fee of 0.5% to 1% or fixed charges like ₹5–₹15 per transfer.
- Bank holidays and weekends may delay regular settlements.
- High-volume merchants can negotiate faster payout schedules at lower fees.
- RazorpayX, Cashfree, and PayU offer payout automation for vendors and affiliates.
GST on Payment Gateway Fees
- All payment gateway fees attract 18% GST, which is shown in monthly invoices.
- GST on fees can be claimed as Input Tax Credit (ITC) by GST-registered businesses.
- Invoices and reconciliation reports are downloadable from your payment provider’s dashboard.
- Accurate GST accounting helps avoid mismatch in GSTR filings.
- Ensure proper classification of payment processing expenses in books of accounts.
