The fee is the least important difference between India's big payment gateways.
Razorpay, Cashfree and PayU all charge about 2% on most payments. On ₹1 lakh of monthly sales, the gap between the cheapest and the most expensive is around ₹60. What actually changes your month is how fast the money reaches your bank, how easily the gateway fits your website, and whether your orders confirm reliably.
Almost every comparison you'll find is written by a gateway, ranking itself first. This one is written from your side of the table. It compares the three most common choices for a small business, explains what the fees really add up to, and walks through adding a payment gateway to your website, whether it's on Shopify, WordPress or an app you built with AI.
Disclosure: my studio runs Reset Tasks. Connecting a payment gateway to a website or app is one of the jobs it does, for a fixed ₹2,000. None of the gateways pays me anything.
Razorpay vs Cashfree vs PayU: fees compared
| Domestic cards, netbanking, wallets | 2% | 1.95% (standard) | 2% |
|---|---|---|---|
| UPI | 2% platform fee | Platform fee applies | Depends on business type and volume |
| Corporate credit cards | 2.15% | Not listed separately | Not listed separately |
| Amex | 2% | 2.95% | 3% |
| International cards | Up to 3% | 2.99% | 3% |
| EMI | 2% | Not listed separately | 3% |
| Setup fee | ₹0 | ₹0 | ₹0 |
| Annual fee | ₹0 | ₹0 (standard) | ₹0 |
| GST | 18% on the fee | 18% on the fee | 18% on the fee |
| Standard settlement | T+1 | T+1 during current offers; instant for 0.30% | T+2 |
Sources: Razorpay pricing, Cashfree pricing and PayU pricing, checked 28 October 2026. Gateways negotiate lower rates for higher volumes.
A note on UPI. By law, banks can't charge merchants a fee (called MDR) on UPI payments. Payment gateways can still charge a platform fee for their service, and most do. If most of your customers pay by UPI and you're small, a free UPI QR code from your bank may be enough until you need online checkout.
What the fees add up to
At ₹1 lakh a month in domestic sales, before any negotiated discount:
| Razorpay (2%) | ₹2,000 | ₹360 | ₹2,360 |
|---|---|---|---|
| Cashfree (1.95%) | ₹1,950 | ₹351 | ₹2,301 |
| PayU (2%) | ₹2,000 | ₹360 | ₹2,360 |
The difference is ₹59 a month. That's why I'd rarely choose a gateway on headline fees alone. It changes if many of your customers pay with Amex or international cards, where the rates differ by a full percentage point.
GST on gateway fees is a business expense. If you're GST-registered, you can usually claim it back as input tax credit. Ask your accountant.
Razorpay
Razorpay is the gateway most Indian startups and small businesses start with, and the one most website platforms and AI app builders support first.
Good for: almost any small business that wants a reliable default. It has ready-made plugins for Shopify, WooCommerce, Wix and most other platforms, payment links and pages you can share without a website, and clear developer documentation.
Watch out for: account activation. Razorpay checks your business documents and website before live payments work, and it can ask questions about your business model. Have your policy pages ready (see below).
Fees: 2% on most domestic methods, 2.15% on corporate cards, up to 3% on international cards. Settlement is T+1 by default, with instant settlement as a paid option.
Cashfree
Cashfree started in payouts (sending money to vendors, staff or customers) and is strong there. Its payment gateway is a close match for Razorpay's.
Good for: businesses that send as well as receive money, such as marketplaces paying sellers, and businesses that want money in their account fast. Instant settlement costs 0.30% extra.
Watch out for: promotions. Cashfree has offered new merchants zero platform fees on the first ₹20 lakh of volume during festive campaigns. That's worth having, but read the exclusions (Amex, Diners, EMI and corporate cards were excluded) and plan for the standard 1.95% afterwards.
Fees: 1.95% standard, 2.95% on Amex, 2.99% on international cards.
PayU
PayU is one of the oldest gateways in India and is widely used by larger merchants and in education, travel and financial services.
Good for: businesses that want a long-established provider and are likely to negotiate rates at higher volumes.
Watch out for: slower standard settlement (T+2) and higher rates on Amex, Diners, EMI and international cards (3%). UPI pricing depends on your business, so ask for it in writing.
Fees: 2% on cards, netbanking, wallets and pay-later, 3% on Amex, Diners, EMI and international payments.
Picked a gateway but stuck connecting it? Reset Tasks will connect Razorpay, Cashfree or PayU to your website or app, test a real payment and make sure orders confirm. ₹2,000, done in 3 working days.
How to choose: five questions
- What does your website run on? Check that the gateway has an official plugin for your platform. All three cover Shopify and WooCommerce. For an AI-built app, check which gateway the tool connects to most easily.
- How fast do you need the money? If cash flow is tight, T+1 or instant settlement matters more than a 0.05% fee difference.
- How do your customers pay? Mostly UPI and debit cards: the gateways are close. Lots of Amex, EMI or international cards: compare those rates carefully.
- Will you need to send money too? Refunds, vendor payouts or seller payments favour a gateway with good payouts.
- How good is support when something goes wrong? Ask other businesses in your industry. A failed payment day costs more than a year of fee differences.
Picture Farhan, who sells cricket gear online from Meerut. He picks the gateway with the lowest headline fee. His store runs on a platform where that gateway's plugin is out of date, and checkout fails on some phones. He loses a weekend of sales before switching to the gateway his platform supports best. The fee saving was ₹40 a month.
How to add a payment gateway to your website
The steps depend on how your website is built.
01Shopify, WooCommerce, Wix and similar platforms
The easiest route. Install the gateway's official app or plugin, sign in to your gateway account, and switch from test mode to live mode once your account is activated. Place a real order of ₹1 or ₹10 and refund it, to check the whole flow.
02No website, or a simple one
Use payment links or payment pages. All three gateways let you create a link or a simple hosted page for a product or an amount, and share it on WhatsApp, email or your site. No coding needed.
03A custom website or an AI-built app
This needs the gateway's developer tools (its API). There are three parts:
- Create the order on a server, not in the browser, using your secret key
- Show the checkout to the customer
- Confirm the payment with a webhook: the gateway sends your app a message when a payment succeeds, and your app checks its signature before marking the order paid
The third part is where most problems happen. If the webhook isn't set up, customers pay but orders stay "pending". If your secret key is in the browser code, anyone can copy it. Both are among the most common problems in AI-built apps.
Picture Neha, who builds a class-booking app for her yoga studio in Kolkata on Lovable. The AI adds a Razorpay button in minutes. Test payments work. Live payments take the money but don't book the class, because nothing is listening for Razorpay's confirmation. She spends a week of credits on it. Here's what that kind of fixing costs in Lovable credits.
What you need to activate a payment gateway
Every gateway checks your business before it lets you take live payments. Have these ready:
- PAN of the business (or yours, for a sole proprietorship)
- A current bank account in the business's name (some accept a savings account for individuals)
- Business proof, such as GST registration, Udyam certificate or shop licence
- A live website or app that shows what you sell, with prices
- Policy pages: terms and conditions, privacy policy, refund and cancellation policy, shipping or delivery policy, and contact details
Missing policy pages are one of the most common reasons activation gets delayed. If your site was built by an agency, make sure the gateway account is opened in your business's name, not theirs. Here's why that matters.
Frequently asked questions
Which is the best payment gateway for a small business in India?
For most small businesses, Razorpay is a safe default because of its plugins, documentation and T+1 settlement. Cashfree is a strong alternative, especially if you need fast settlement or payouts. Choose the one your website platform supports best.
Razorpay vs PayU: which is cheaper?
On most domestic payments, both charge 2% plus GST. Razorpay is cheaper on Amex and EMI (2% against PayU's 3%), and settles faster by default (T+1 against T+2).
Cashfree vs Razorpay: which is better?
They're close. Cashfree's standard rate is slightly lower (1.95% against 2%) and it's strong on payouts. Razorpay has wider plugin support. On ₹1 lakh a month, the fee difference is about ₹60.
Do payment gateways charge for UPI?
Banks can't charge merchants MDR on UPI, but payment gateways usually charge a platform fee for processing UPI through their checkout. Razorpay lists 2%. Ask each gateway for its UPI rate in writing.
How do I integrate a payment gateway in my website?
On Shopify, WooCommerce or Wix, install the gateway's official plugin and connect your account. With no website, use payment links. For a custom site or AI-built app, use the gateway's API and set up a webhook so orders confirm automatically.
How long does payment gateway activation take?
Usually a few days once your documents and website are complete. Missing policy pages or an unclear business description are the most common causes of delay.