Indian D2C brands lose 30–40% of potential revenue at the checkout — failed payments, OTP drops, and COD orders that never convert. Most founders blame the gateway fee. The fee is the smallest number on the page: a 0.25% gap on a ₹2,000 order is ₹5. A payment that fails because your gateway’s UPI success rate slid to 82% during a bank outage costs you the whole ₹2,000. Your checkout is a plating station — every extra second between “order” and “paid” is a cold plate sent back.
This guide ranks India’s eight serious payment gateways on what actually moves money — success rate, settlement speed, payment-method coverage, and COD remittance — then tells you which to reach for by payment method: UPI, cards, EMI, international cards, and wallets. The principle underneath all of it: pick the gateway by response rate, not by affiliation.
Shopify’s built-in checkout is live in 20+ countries — not India, where RBI payment-aggregator rules block it. So every Indian Shopify store has to connect a third-party RBI-licensed gateway, and Shopify adds a 2% third-party transaction fee on top of the gateway’s own cut — pushing your effective rate close to 4% if you ignore it. Choosing the gateway is not a setting you tick once; it is the most expensive integration on your store.
| Gateway | Headline fee* | Settlement | Standout | Watch-out |
|---|---|---|---|---|
| Razorpay | ~2% + GST | T+2 | Best Shopify integration, full method coverage | No RTO / COD-risk tooling |
| Cashfree Payments | 1.75% (1.6% on the 2025–26 signup promo) | T+2, instant (~15 min) optional | Fastest settlement, bulk payouts | Annual fee on some plans |
| PayU | ~2–2.5%, negotiable | T+2 | Widest EMI/BNPL, high-volume success rate | Stricter KYC, slower onboarding |
| PhonePe Payment Gateway | ~1.95% (free onboarding promo) | T+2 | Strongest UPI routing, largest UPI base | Thin on non-UPI methods |
| Paytm Payment Gateway | 0% UPI / ~1.99% cards | T+2 | Wallet + BNPL reach | Enterprise-leaning pricing |
| CCAvenue | Negotiable + ~₹1,200/yr | Slower | 27 currencies, 18-language checkout | Dated dashboard, slower payouts |
| Easebuzz | ~1.5% avg | T+2 | Low fees, smart routing, marketplace splits | Smaller support footprint |
| JioPay (Jio Payment Solutions) | Not public yet | Not public yet | RBI-approved aggregator, 100+ methods, Jio backing | New entrant — pricing and scale unproven |
*All fees exclude 18% GST and are negotiable above volume. A 2% fee on a ₹1,000 order is ₹20 + ₹3.60 GST — an effective 2.36%. UPI rides at near-zero MDR and is about 62% of India’s gateway volume, so weight your decision toward whoever routes UPI best.
No single gateway wins every method. This is where the real decision lives.
UPI targets a 90–95% success rate but drops to 80–85% when a major bank’s servers choke at peak. Because it is most of your volume and costs almost nothing, success rate — not fee — is the whole game. PhonePe and Razorpay route UPI most reliably. Use PhonePe if 70%+ of orders are UPI and you want the lowest entry cost; use Razorpay if you want UPI plus every other method on one dashboard.
Cards clear 85–95% when tokenisation and 3DS are set up properly, and they out-convert UPI on high-value orders. Razorpay and PayU handle card flows and saved-card tokens cleanly. Move to PayU once card volume is large enough to negotiate the rate down.
Above a ₹5,000 average order value, EMI lifts conversion. PayU has the widest bank tie-ups for no-cost and low-cost EMI, plus LazyPay for BNPL; Razorpay and Paytm cover the mainstream EMI banks. Pick PayU when EMI is a real share of your cart, not a checkbox.
Selling to NRIs, the US, or the Gulf changes the maths — international cards run 3%+ and need multi-currency support. CCAvenue (27 currencies) and PayU are the India-native options; Stripe is the developer-first route but is cross-border only and takes neither domestic UPI nor COD. Run one domestic gateway for India and a second for international — don’t force one to do both.
Paytm owns wallet payments by reach. If a chunk of your buyers keep balances in their Paytm wallet, its gateway captures demand the others route around.
COD is still 30%+ of Indian D2C orders, and the gateway’s job here is how fast it remits that cash to you. Cashfree leads on settlement — standard T+2, with an optional instant (~15-minute) settlement that matters when working capital is tight. But there’s a catch every gateway shares — see below.
Every gateway here supports net banking. It’s a low single-digit share for D2C and rarely the deciding factor — don’t pick a gateway for net banking alone.
Chasing the lowest fee is button-colour theatre. A 5-point swing in payment success rate dwarfs a 0.25% fee gap on every order you’d otherwise lose. If your payment failure rate is above 10%, the fix isn’t a cheaper gateway — it’s routing across two gateways by live success rate, so a UPI dip on one fails over to the other instead of failing the sale. This is why mature D2C stacks don’t run one gateway; they run two and let performance decide.
Not one gateway on this list scores RTO risk on a COD order or nudges a risky COD to prepaid before it ships. COD at 30%+ RTO in Tier-2 lanes is a leaky bucket — and a gateway only fills the bucket faster; it doesn’t patch the holes. That logic — RTO scoring, COD-to-prepaid conversion, and gateway routing by response rate — sits a layer above the gateway, in how your checkout and dispatch are wired. We’ve taken brands from 30% RTO to 12% by patching the leaking pincodes first, then choosing the gateway. More on the build in our ecommerce stack.
No. RBI payment-aggregator rules block it, and Shopify charges a 2% third-party fee on top of your gateway. Indian stores must use an RBI-licensed gateway like the eight above.
On headline rate, Easebuzz (~1.5%) and Cashfree (1.75%, 1.6% on the 2025–26 signup promo) sit lowest; PhonePe and JioPay are running new-merchant offers. All fees exclude 18% GST and are negotiable above volume — the cheapest sticker rarely stays cheapest at scale.
PhonePe and Razorpay route UPI most reliably. UPI is about 62% of volume, so its success rate matters far more than its near-zero fee.
Cashfree, for the fastest remittance of COD cash. But no gateway reduces COD returns — that’s an RTO problem solved above the gateway.
Yes — and past ~₹50L/month you should. Routing across two gateways by live success rate is the single biggest lever on payment conversion.
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