Razorpay vs Cashfree vs PhonePe — Fees, COD, Speed
By GrowwwTech··5 min read
“UPI payments fail 10% of the time. Razorpay holds my settlements during high-volume sales. And I’m paying 2% on every credit card transaction.”
Payment gateway issues cost Indian D2C brands more than just transaction fees. Failed payments mean lost sales. Slow settlements mean blocked working capital. And poor COD-to-prepaid UX means customers default to COD — increasing your RTO risk.
Here’s how the three most popular payment gateways for Indian ecommerce actually compare.
Quick Comparison: Razorpay vs Cashfree vs PhonePe Business
Feature
Razorpay
Cashfree
PhonePe Business
Setup fee
₹0
₹0
₹0
UPI fee
0% (MDR waived)
0% (MDR waived)
0% (MDR waived)
Debit card fee
1.5-2%
1.5-1.85%
1.5-2%
Credit card fee
2-2.5%
2-2.2%
2-2.5%
Net banking fee
1.5-2%
1.5-1.9%
1.5-2%
Standard settlement
T+2 (2 business days)
T+1 (next business day)
T+2
Instant settlement
Available (extra fee)
Same-day available
Not standard
Shopify integration
Native app (excellent)
Native app (good)
Via Shopify Payments India
Payment links
Yes (free)
Yes (free)
Yes
Subscriptions/recurring
Yes (strong)
Yes
Limited
Multi-currency
Yes (136 currencies)
Yes (limited)
No
Best for
Full-stack needs, B2B + D2C
Fastest settlements, cost-conscious
UPI-first businesses
Razorpay: The Market Leader
Pros
Best Shopify integration — Seamless checkout, all payment methods, zero technical hassle
Razorpay Magic Checkout — Pre-fills customer details (address, email) for returning customers, reducing checkout friction and increasing conversion
Comprehensive dashboard — Refunds, disputes, analytics, payouts all in one place
RazorpayX — Business banking features (current account, payroll, vendor payments) that growing D2C brands eventually need
Strong subscription billing — Auto-debit via UPI mandate and card recurring for subscription D2C brands
Cons
Higher fees at low volume — Standard 2% on cards is negotiable only at 1,000+ transactions/month
Settlement holds during high volume — Multiple sellers report settlements being delayed during sale events. Razorpay calls it “risk review” — but it blocks your working capital at the worst time.
Support can be slow — Ticket-based support, phone support only for premium plans
Cashfree: The Settlement Speed Champion
Pros
Fastest standard settlement: T+1 — Money in your bank next business day. This is massive for cash flow, especially during high-volume periods.
Same-day settlement available — For an additional fee, get money the same day. Difference when you need to reinvest in ads daily.
Slightly lower fees — 1.85% on debit cards vs 2% at Razorpay. On ₹10L/month card revenue, that saves ₹1,500/month.
Auto-collect — Virtual account numbers for B2B receivables, useful if you do wholesale alongside D2C
Good API — Clean, well-documented API for custom integrations
Cons
Less feature-rich than Razorpay — No equivalent of Magic Checkout or RazorpayX
Shopify integration is good but not as polished as Razorpay’s
Smaller stack — Fewer third-party integrations and plugins compared to Razorpay
PhonePe Business: The UPI Native
Pros
Highest UPI success rates — PhonePe handles 48%+ of all UPI transactions in India. Their payment gateway uses this for better UPI payment success compared to routing through other gateways.
UPI intent flow — Opens the customer’s UPI app directly (no manual VPA entry), which significantly improves mobile conversion rates
PhonePe Switch — Your brand can appear inside the PhonePe app, exposing you to their 500M+ user base
Cons
Primarily UPI-focused — Card and net banking support exists but isn’t as mature as Razorpay/Cashfree
Limited Shopify support — Available via Shopify Payments India but not as feature-rich as standalone integration
Less suited as a standalone gateway — Best used as a backup for UPI alongside Razorpay or Cashfree for cards
Our Recommendation by Brand Size
Brand Size
Primary Gateway
Why
0-500 orders/month
Razorpay
Best all-in-one, easiest Shopify setup, Magic Checkout boosts conversion
500-2,000 orders/month
Cashfree
T+1 settlement = better cash flow for reinvesting in ads and inventory
2,000+ orders/month
Razorpay + Cashfree
Dual gateway setup — Razorpay primary, Cashfree as fallback for failed payments. Negotiate volume-based rates with both.
High UPI volume
Add PhonePe
Route UPI through PhonePe for highest success rates, cards through Razorpay/Cashfree
The Hidden Payment Problem: Failed Transactions
Payment failure rates in India average 8-12% across all methods. On ₹10L/month in attempted payments, that’s ₹80,000-1,20,000 in lost revenue every month from payments that simply don’t go through.
How to reduce failures:
Offer multiple payment methods — UPI, credit/debit cards, net banking, wallets, and COD. If UPI fails, the customer can try a card.
UPI intent flow — Opens the UPI app directly instead of making the customer type their VPA. Reduces UPI failure by 15-20%.
Auto-retry on failure — Some gateways offer automatic retry on a different payment processor if the first attempt fails.
Cart recovery for payment failures — If payment fails, immediately send a WhatsApp with a payment link to retry. Recovers 10-15% of failed payments.
If your payment failure rate is above 10%, the fix is structural
Most failure-rate problems aren’t about the gateway — they’re about how it’s wired. Multi-method support, UPI intent flow, auto-retry on a different processor, WhatsApp recovery for failed payments. We integrate payment gateways the same way for every Shopify build: pick by vendor response rate (not affiliation), wire the failover logic, and run the recovery flow in WhatsApp. We’ve done it for 200+ Indian D2C brands. ₹385Cr+ revenue processed. 4.5x average ROI. 98% retention.
The Shopify build is ₹50,000 fixed-price with no AMC — bug fixes for what we ship are included for the lifetime of the store. Active checkout-conversion optimisation sits on the optional ₹30K/month Growth Retainer.
