Every payment provider advertises a rate, and businesses tend to compare providers on that one number. It's a mistake that costs real money. A provider with a lower headline rate can be more expensive once its monthly fee, refund charges or settlement terms are counted, and some lines on a pricing sheet aren't negotiable at all, because regulation sets them.
This guide goes through a typical Indian payment gateway pricing sheet line by line, separates what's fixed by rule from what's commercial, and shows how to compare two quotes on the cost that actually matters: the total you pay on your real mix of payments. It doesn't quote any provider's rates, including ours; your provider's written quote is the only figure that counts.
The lines on a pricing sheet
Providers name things differently, but most pricing sheets are built from these lines:
| Charge | What it is | What to check |
|---|---|---|
| Setup or onboarding fee | A one-time charge to open your account | Whether it's refundable if you're not approved |
| Annual maintenance (AMC) or platform fee | A fixed yearly or monthly charge | Whether it applies even in months with no sales |
| Transaction fee by payment method | A percentage (and sometimes a fixed amount) per payment; often called MDR or TDR | The rate for each method you'll actually use |
| International cards and currencies | Higher rates for foreign cards, plus currency conversion | The markup on conversion, not just the card rate |
| EMI and pay-later | Extra charges for instalment options | Who pays the interest or subvention: you or the customer |
| Refund fee | A charge to process a refund, or a rule that the original fee isn't returned | Whether the original transaction fee is refunded |
| Chargeback fee | A charge per dispute raised against you | Fees for each stage, and whether won disputes are charged |
| Settlement speed | Faster or same-day settlement, often for an extra fee | The standard cycle, and the cost of faster ones |
| Payouts | Fees per transfer if you also send money out | Per-rail pricing (UPI, IMPS, NEFT) |
| Minimum commitment | A minimum monthly volume or fee | What you pay if you fall short |
| GST | Tax on the provider's fees, not on your sales | The rate on the invoice and whether you can claim input credit |
What regulation fixes, and what you negotiate
Some transaction fees are set by rule, so no provider can quote you differently. Everything else is commercial:
| Item | Who sets it | Can you negotiate? |
|---|---|---|
| UPI merchant payments | Regulation and NPCI: zero MDR until 14 October 2026; from 15 October 2026, 0.4% above ₹2,000 (capped at ₹300), with exceptions | No, for the regulated rate |
| RuPay debit cards | Regulation: zero MDR since January 2020 | No |
| Other debit cards | Capped by regulation | Within the cap |
| Credit cards, international cards, net banking, wallets | Commercial | Yes |
| Setup, AMC, refunds, chargebacks, settlement speed, minimums | Commercial | Yes |
Our MDR explainer sets out the regulated rates in detail, including NPCI's UPI changes from 15 October 2026 and the categories that pay less. If a quote shows a percentage fee on ordinary UPI merchant payments of ₹2,000 or less, ask what it's for: NPCI's MDR rules put those at zero.
Charges you can't pass on to customers
It's tempting to add a fee at checkout to cover the cost. The rules are strict:
- UPI: NPCI's rules require a merchant's payment provider to ensure customers aren't surcharged for paying by UPI. Any convenience fee must be shown upfront, before the customer picks a payment method, and be the same across debit payment modes (net banking, debit card, UPI and credit card). NPCI's MDR guidance also says merchants may not pass the UPI MDR on to customers.
- Any method, through a payment aggregator: RBI's 2025 directions require any charge added on top of the price to be shown to the customer clearly before payment.
- Card networks have their own rules on surcharging. Check your agreement before adding any fee.
Common pricing models
Providers package the same costs in different ways. Knowing the model tells you where a quote can hide costs:
| Model | How it works | Watch for |
|---|---|---|
| Flat rate | One percentage for most methods | Paying a flat rate on methods that regulation makes cheaper, such as small UPI payments |
| Per-method rates | A separate rate for each payment method and card type | Rates for the methods you actually use, not the headline one |
| Rate plus fixed fee | A percentage plus a fixed amount per payment | The fixed part, which hurts on small payments |
| Platform fee plus lower rates | A monthly or annual fee in exchange for lower per-payment rates | Whether your volume is high enough to make it pay off |
| Custom or volume-tiered | Negotiated rates that fall as volume rises | Minimum commitments and what happens if you fall short |
None of these is better in itself. The right one depends on your mix of payment methods, your average payment size and your monthly volume, which is why the effective-rate calculation below matters.
International payments and currency conversion
If you accept payments from abroad, expect separate pricing for international cards and for currency conversion, and read both. The card rate is usually visible; the conversion markup, applied when a customer's currency is converted to rupees, often isn't. Ask for it in writing, and check how refunds of foreign payments are converted back. Our guide to international payment gateways covers the rest of cross-border collection.
How your fees are taken
Providers collect their charges in one of two ways, and it affects your accounts:
- Deducted before settlement: each settlement arrives net of fees and GST, with the deductions itemised in the settlement report. This is the most common arrangement.
- Invoiced separately: you receive the gross amount and pay an invoice later.
Either way, the fees should be itemised so you can check them. Our reconciliation guide shows how to read a settlement report and check each deduction against your agreement.
Work out your effective rate
The only fair comparison between providers is the total you'd pay on your own payments. A simple method:
- Take a typical recent month: total sales by payment method, the number of payments, refunds and chargebacks.
- Apply each provider's rate per method to your sales in that method.
- Add the fixed charges for the month: platform fee, the monthly share of AMC, and setup spread over a year.
- Add refund and chargeback fees, and any cost of the settlement speed you need.
- Add GST on all of it, at the rate on the provider's invoice.
- Divide the total by your gross sales. That's your effective rate.
A worked example
Two hypothetical quotes for a business taking ₹5,00,000 a month in card and net banking payments. The figures are made up to show the arithmetic; they aren't market rates or anyone's tariff.
| Compared on | Quote A | Quote B |
|---|---|---|
| Transaction fee | 2.0% = ₹10,000 | 1.8% = ₹9,000 |
| Monthly platform fee | None | ₹2,999 |
| Total for the month | ₹10,000 | ₹11,999 |
| Effective rate | 2.00% | 2.40% |
Quote B's lower headline rate costs more at this volume, because of its monthly fee. It only becomes cheaper above about ₹15 lakh a month, where the 0.2% saving outweighs the ₹2,999 fee. Run the same sum with your own numbers, including refunds and chargebacks, before choosing.
Questions to ask before you sign
Get the answers in writing, as part of your agreement:
- What is the rate for each payment method we'll use, and which rates are fixed by regulation?
- Are there setup, annual, monthly or minimum-volume charges? What happens if we fall short of a minimum?
- Is the original transaction fee returned when we refund a payment? Is there a refund fee?
- What does a chargeback cost, and at which stages?
- What is the standard settlement cycle, and what does faster settlement cost? RBI's rules require the settlement timeline to be stated clearly in the agreement.
- Are fees deducted from settlements or invoiced, and are they itemised?
- Which rate of GST applies to your fees?
- Are there exit fees, notice periods or lock-ins?
Our checklist for choosing a payment gateway covers the non-price questions too: who holds your money, support and exit. Our pricing page shows indicative market reference rates, clearly labelled as such, and a calculator that works from the rates you enter.
Costs that don't appear on the sheet
Some of the biggest costs are indirect:
- Failed payments. A provider with a lower rate but more failures can cost more in lost sales than it saves in fees.
- Slow settlement, which ties up working capital.
- Chargebacks lost for lack of evidence. Our chargeback guide explains how to win the ones you should.
- Engineering time to integrate and maintain, and to reconcile reports that don't match your records.
- Switching costs if you need to move later.
If you're deciding whether you need a full gateway at all, our comparison of payment links and payment gateways explains when a simpler option is enough.
Frequently asked questions
What are typical payment gateway charges in India?
It depends on the payment method and your provider. Some rates are fixed by regulation (UPI and RuPay debit cards), debit cards are capped, and credit cards, international cards, net banking and wallets are commercial. Compare quotes on your effective rate, including fixed fees, refunds, chargebacks and GST.
Is GST charged on payment gateway fees?
Yes, GST is charged on the provider's fees, not on your sales. Check the rate on the provider's invoice; GST-registered businesses can usually claim input tax credit on it.
Can I charge customers a fee for paying online?
Not for UPI: NPCI's rules prohibit surcharging UPI payments, and any convenience fee must be shown upfront and be consistent across debit modes. For other methods, any extra charge must be shown clearly before payment under RBI's rules for payment aggregators, and card network rules also apply.
Do I get the transaction fee back when I refund a payment?
It depends on your provider. Some return the original fee, some don't, and some charge a refund fee. Ask before you sign.
What is AMC in a payment gateway?
An annual maintenance charge: a fixed yearly fee some providers charge for keeping your account active, separate from per-payment fees. Ask whether it applies in years with little or no volume, and include it in your effective-rate calculation.
What is TDR in a payment gateway?
Transaction discount rate: a term some gateways use for the total per-payment deduction, which may include the MDR and the provider's own margin. Ask what it includes.
Go deeper
Official sources
- NPCI — Merchant Discount Rate (MDR) on Select UPI (P2M) Transactions: FAQs (15 Sep 2026)0.4% UPI MDR above ₹2,000 from 15 October 2026, capped at ₹300, with exceptions; merchants may not pass MDR to customers.
- NPCI — UPI Consolidated Circular, Version 1.0, NPCI/UPI/CC/01 (18 Sep 2026)No surcharge on UPI; convenience fees disclosed upfront and consistent across debit payment modes (7.5).
- RBI — Reserve Bank of India (Regulation of Payment Aggregators) Directions, 2025 (15 Sep 2025)Charges shown to the payer before payment (10(c)); settlement timelines stated in the agreement (16).
Last reviewed . Examples, amounts and screens marked illustrative are not LILPE figures.
