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Best Payment Gateway in India: A Simple Guide for E-Commerce Businesses

If you are running an e-commerce website in India, choosing the rightpayment gateway is one of the most important decisions you will make. Customers may love your products, but if the payment experience is slow, confusing, or untrustworthy, they will leave without buying.

What Is a Payment Gateway?

A payment gateway is a service that helps your website accept online payments safely. When a customer pays on your website using:

• UPI
• Debit card
• Credit card
• Net banking
• Wallets

The payment gateway securely transfers the payment information between:

• Your website
• The customer’s bank
• Your bank

Without a payment gateway, online payments are not possible on an e-commerce site.

Why is a payment gateway required?

A payment gateway is important for four main reasons:

• Security
  

  It protects sensitive data like card numbers and UPI IDs using encryption so that hackers cannot steal your customer’s information.

• Trust
  

  When customers see familiar names like Razorpay, PhonePe, Paytm, or Cashfree during checkout, they feel safer and more confident to complete the payment.

• Automation
  

  Once payment is done, the system can automatically confirm the order, send emails, update inventory, and trigger delivery without manual checking..

• Compliance
  

  In India, RBI rules are strict. Using a proper payment gateway helps your business follow banking and data rules while accepting online payments.

Types of Payment Gateways in India

1.Hosted Payment Gateway

• Customer is redirected to the gateway’s payment page
• Easy to set up
• Best for small businesses

2.API / Integrated Payment Gateway

• Payment happens directly on your website
• Better user experience
• Most popular choice for e-commerce

3.Self-Hosted Payment Gateway

• Full control over payment process
• High security responsibility
• Used by large companies only

4.Bank Payment Gateway

• Direct integration with banks
• Limited flexibility
• Less common today

How Many Payment Gateways Are There in India?

In India, there are dozens of payment gateways and aggregators, and the number is increasing every year. Many of them are approved under RBI’s Payment Aggregator framework.

Best Payment Gateways

Razorpay

• Easy integration
• Supports UPI, cards, wallets
• Good for startups and growing brands

Paytm Payment Gateway

• Strong UPI and wallet user base
• Trusted brand in India

Cashfree Payments

• Fast settlements
• Competitive pricing
• Good for high-volume businesses

PayU

• Reliable and widely used
• Supports international payments

Instamojo

• Beginner-friendly
• Good for small sellers and creators

CCAvenue

• One of the oldest gateways
• Supports international currencies

How Much Do Payment Gateways Charge?

Most payment gateways in India charge:

• 1.5% to 3% per transaction
• Plus 18% GST

Payment Type	Charges
UPI	0% to 1.5%
Debit/Credit Cards	~2%
International Cards	3% to 4%
Wallets	1.5% to 2%

How Much Do Payment Gateways Charge Per Transaction?

On average:

• ₹1000 order → ₹20–₹30 fee
• The rest goes to your bank account
• Settlement happens in 1–2 working days

High-volume businesses can negotiate lower rates.

Which Payment Gateway Is Best?

There is no single “best” gateway for everyone. It depends on:

• Your business size
• Monthly sales volume
• Type of customers
• Domestic or international payments

Our Recommendation:

• Startups & SMEs: Razorpay, Instamojo
• High-volume businesses: Cashfree, PayU
• International selling: PayU, CCAvenue

Which Payment Gateway Is Free?

No gateway is fully free.

However:

• Instamojo allows passing the fee to customers (convenience fee)
• UPI transactions can be zero-cost in some cases
• Some gateways offer zero setup fees

But every gateway earns money per transaction.

How Does a Payment Gateway Work?

STEP 1

Order Placement: Customer places an order on your website

STEP 2

Details Entry: Customer enters payment details (UPI / card / net banking)

STEP 3

Encryption: Payment gateway encrypts the data for safe transmission

STEP 4

Verification: Bank checks and approves the payment

STEP 5

Notification: Payment success message is sent to your website

FINISH

Confirmation: Order is confirmed for the customer

Settlement: Money is settled into your account (usually in 1–2 days)

Checklist Before Choosing a Payment Gateway

Before selecting a payment gateway, business owners usually check:

• Easy integration with website
• Supports UPI, cards, wallets
• Fast settlement time
• Transparent pricing
• Good customer support
• Trusted brand name

Need Help Choosing or Integrating a Payment Gateway?

At MindHuntz Digital Services Pvt. Ltd., we help businesses:

• Build e-commerce websites
• Integrate secure payment gateways
• Optimize checkout for higher conversions

Get expert guidance before you choose.