What is a payment gateway and why you need one
A payment gateway is a technology service that authorises and processes online transactions between a buyer’s bank and the merchant’s account. Without a gateway, your website cannot accept credit cards, debit cards, UPI or wallet payments, which limits sales especially for Indian D2C brands and NGOs that rely on digital donations.
Key regulatory and compliance factors in India
In India, every payment gateway must be compliant with the Reserve Bank of India (RBI) and the Payment Card Industry Data Security Standard (PCI‑DSS). The gateway provider must also support GST invoicing and adhere to the latest Indian data‑privacy rules such as the Personal Data Protection Bill (when enacted). Non‑compliance can lead to fines or suspension of the merchant account.
Popular Indian payment gateway providers
India has a mature ecosystem of payment aggregators and banks that offer gateway services. The most widely used providers include:
| Provider | Type | Settlement period* | Major Indian payment methods supported | Typical onboarding documents |
|---|---|---|---|---|
| Razorpay | Aggregator | 2‑5 business days | Cards, UPI, Netbanking, Wallets, EMI | PAN, GST, cancelled cheque, KYC |
| PayU India | Aggregator | 3‑7 business days | Cards, UPI, Netbanking, Wallets, PayLater | PAN, GST, business proof, KYC |
| CCAvenue | Aggregator | 3‑5 business days | Cards, UPI, Netbanking, Wallets, Bharat QR | PAN, GST, bank statement, KYC |
| Instamojo | Aggregator | 1‑3 business days | Cards, UPI, Wallets, PayLater | PAN, GST, address proof |
| HDFC Bank Payment Gateway | Bank‑direct | Same‑day to next day | Cards, Netbanking, UPI, Wallets | PAN, GST, corporate bank account, board resolution |
| Axis Bank SecureNet | Bank‑direct | Same‑day to next day | Cards, Netbanking, UPI | PAN, GST, corporate bank account, KYC |
*Settlement period is the time taken for the funds to appear in your merchant bank account after a successful transaction. It varies with provider, transaction volume and risk profile.
How to evaluate a gateway for your website
Choosing a gateway is not just about price; it is about fit with your business model, technical stack, and compliance needs. Evaluate on the following dimensions:
- Transaction success rate – Look for providers that publish their average success ratio (usually 95 % +). A higher rate reduces cart abandonment.
- Supported payment methods – Indian shoppers use UPI, wallets (PhonePe, Google Pay), and cards; ensure the gateway covers the mix you need.
- Integration complexity – Some gateways offer plug‑and‑play plugins for Shopify, WooCommerce, or Magento, while others require custom API work.
- Settlement speed – Faster settlement improves cash flow, especially for NGOs that need to allocate funds quickly.
- Security and compliance – Verify PCI‑DSS level (most Indian aggregators are Level 1) and RBI‑mandated tokenisation.
- Customer support – 24 × 7 Indian‑time support, preferably with a local phone number, helps resolve disputes promptly.
- Scalability – If you expect seasonal spikes (e.g., school admissions, festival sales), ensure the provider can handle high‑volume peaks without throttling.
Integration options: hosted, API, and plugins
Payment gateways typically expose three integration models:
| Model | How it works | When to use it | Development effort |
|---|---|---|---|
| Hosted checkout | The buyer is redirected to the provider’s secure page, completes payment, and is sent back to your site. | Low‑risk sites, quick launch, limited custom UI. | Minimal – embed a button or form. |
| Embedded API (iframe or JS SDK) | Payment fields appear inside your page, but the gateway handles tokenisation and encryption. | Need to keep the user on your site while maintaining PCI compliance. | Moderate – requires front‑end scripting and back‑end verification. |
| Full‑stack API | Your server talks directly to the gateway’s REST endpoints; you build the UI from scratch. | Highly customised checkout, multi‑step flows, subscription models. | High – requires secure handling of card data, tokenisation, and webhook processing. |
| Platform plugins | Pre‑built extensions for WordPress, Shopify, Magento, etc. | Small businesses using popular e‑commerce platforms. | Very low – install and configure. |
If you are already working with a web development partner for website development in Pune, ask them which model aligns with your current tech stack. For most NGOs and small D2C brands, a hosted checkout or a platform plugin offers the quickest path to live payments.
Cost structure and hidden fees in India
Indian payment gateways usually publish a base transaction fee (often a percentage plus a fixed rupee amount) and then add optional services. The typical cost components are:
- Transaction fee – Ranges from 1.5 % + ₹2 to 3 % + ₹3 per successful transaction, depending on volume and payment method. UPI is often cheaper (≈ 0 % + ₹0) because the RBI does not levy a merchant discount rate on UPI.
- Setup or activation fee – Some aggregators waive this; banks may charge a one‑time fee of ₹1,000‑₹5,000.
- Monthly or annual maintenance fee – Usually ₹0‑₹1,500 for basic plans; advanced fraud‑prevention suites can cost more.
- Chargeback or dispute fee – Typically ₹200‑₹500 per disputed transaction.
- GST – All fees are subject to 18 % GST, which you can claim as input tax if you are GST‑registered.
Because the exact percentages depend on your average ticket size and monthly volume, request a tiered quote before signing. Our team can confirm the latest market ranges on WhatsApp.
Step‑by‑step process to get a payment gateway for your website in India
- Gather mandatory documents – PAN of the business, GST registration certificate, cancelled cheque of the settlement bank account, and proof of address (electricity bill or rent agreement). For NGOs, include the 80G certificate if you plan to accept tax‑exempt donations.
- Choose a provider – Based on the evaluation matrix above, shortlist two to three gateways that support your required payment methods and settlement speed.
- Apply online – Most aggregators have a web form; banks may require a physical application. Fill in details, upload scanned documents, and agree to the Merchant Service Agreement (MSA).
- Complete KYC verification – The provider’s compliance team will verify your PAN, GST and bank details. This can take from a few hours (for aggregators) to 5‑7 business days (for banks).
- Set up settlement account – Provide the bank account where you want funds transferred. Ensure the account name matches the legal entity in your KYC documents.
- Configure technical integration –
- For hosted checkout, copy the generated payment link/button into your site.
- For plugins, install the module from the marketplace and enter the API key/secret provided by the gateway.
- For API integration, generate a secret key, implement tokenisation on the front end, and set up server‑side verification and webhook listeners for order status updates.
- Test in sandbox mode – All major gateways provide a sandbox environment with test card numbers and UPI VPA’s. Run end‑to‑end tests for success, failure, and refund flows.
- Go live – Switch the credentials from sandbox to production, enable live mode in the dashboard, and perform a small real‑money transaction to confirm settlement.
- Monitor and optimise – Use the gateway’s analytics to track success rates, average transaction value, and dispute ratios. Adjust fraud rules or enable additional payment methods as needed.
Comparison of top providers for Indian websites
| Feature | Razorpay | PayU India | CCAvenue | Instamojo | HDFC Bank PG | Axis Bank SecureNet |
|---|---|---|---|---|---|---|
| Type | Aggregator | Aggregator | Aggregator | Aggregator | Bank‑direct | Bank‑direct |
| UPI support | Yes (instant) | Yes (instant) | Yes (via Netbanking) | Yes (instant) | Yes (instant) | Yes (instant) |
| PCI‑DSS level | Level 1 | Level 1 | Level 1 | Level 1 | Level 1 | Level 1 |
| Settlement speed | 2‑5 days (faster for UPI) | 3‑7 days | 3‑5 days | 1‑3 days (UPI) | Same‑day to next day | Same‑day to next day |
| Transaction fee (cards) | 2 % + ₹3 (volume‑based discount) | 2.5 % + ₹3 | 2.9 % + ₹3 | 2 % + ₹2 | 2.5 % + ₹3 (subject to bank policy) | 2.5 % + ₹3 |
| UPI fee | 0 % + ₹0 | 0 % + ₹0 | 0 % + ₹0 | 0 % + ₹0 | 0 % + ₹0 | 0 % + ₹0 |
| Plugin availability | WooCommerce, Shopify, Magento, WordPress | WooCommerce, Shopify, Magento | WooCommerce, Shopify, Magento, PrestaShop | WooCommerce, Shopify | WooCommerce, custom API | WooCommerce, custom API |
| Customer support | 24 × 7 phone & chat (India) | 24 × 7 phone & email | 24 × 7 phone, email, chat | Business hours phone, email | Dedicated relationship manager | Dedicated relationship manager |
| Typical onboarding time | < 24 hours (sandbox) | 2‑3 days | 3‑5 days | < 24 hours | 5‑7 days | 5‑7 days |
| Special features | Smart routing, subscription, invoicing, GST‑ready | PayLater, EMI, international cards | Multi‑currency, recurring billing | Simple donation button, QR code generation | Integrated merchant POS, high‑value settlement | High‑value corporate settlement, tokenisation |
The table summarises the most relevant factors for Indian SMEs, NGOs and D2C brands. Your final choice should align with the payment methods your target audience prefers and the settlement speed that matches your cash‑flow needs.
Frequently Asked Questions
How long does it take to get a payment gateway live in India?
Most aggregators activate a sandbox account within a few hours and can go live in 1‑3 business days after KYC verification. Bank‑direct gateways typically need 5‑7 days because they must verify the corporate bank account and board resolution.
Do I need a separate merchant account for each gateway?
Aggregators such as Razorpay and PayU use a pooled merchant account, so you do not need to open a separate account with each bank. Bank‑direct gateways require you to link your own corporate bank account, which then acts as the settlement destination.
Is UPI really free for merchants?
The RBI does not levy a merchant discount rate on UPI, so most gateways charge 0 % + ₹0 for UPI transactions. However, providers may still apply a nominal GST on the service fee, and some may bundle UPI with a paid premium plan that includes additional features.
What security measures must I implement on my site?
At minimum, you must use HTTPS, never store raw card data, and rely on the gateway’s tokenisation service. If you choose a full‑stack API integration, implement PCI‑DSS Level 1 controls or use a validated third‑party library that handles encryption.
Can I accept donations from abroad for my NGO?
Yes, most Indian aggregators support international cards and can route foreign currency to an INR settlement account after conversion. You will need to ensure your GST registration and PAN are active, and you may be subject to additional RBI foreign‑exchange compliance.
Does GST affect the way I invoice customers?
All payment gateways in India can generate GST‑compliant invoices if you enable the feature in the dashboard. The invoice will include your GSTIN, the transaction amount, and the applicable GST (usually 18 %). This helps you claim input tax credit on your purchases.
Where to Start
- List the payment methods your customers use most (UPI, wallets, cards).
- Collect the mandatory KYC documents: PAN, GST certificate, cancelled cheque, address proof.
- Shortlist two aggregators and one bank‑direct gateway based on settlement speed and fee structure.
- Sign up for sandbox accounts, run end‑to‑end tests, and compare the checkout experience.
- Choose the provider that meets your compliance, cost and technical requirements, then complete the live onboarding.
If you need help evaluating the options or integrating the gateway with your existing site, feel free to chat with our team on WhatsApp.