Two payment gateways can both advertise a low transaction rate and leave you with different amounts in your bank account. The difference may come from payment methods excluded from an offer, tax on fees, refunds, settlement charges or a monthly minimum. A low rate also offers little value if customers cannot finish paying.
The number worth comparing is your effective payment cost: total fees and taxes divided by the value of successful payments. This guide uses Cashfree’s published rates and current offer to calculate that cost, then shows what to check in any gateway quote.
TL;DR
Compare the total cost of successful payments across your UPI, card and other payment methods, then add applicable tax, fixed fees, refunds and optional settlement charges. Cashfree currently offers eligible new merchants 0% platform fees on up to ₹20 lakh of cumulative eligible domestic payment volume during the campaign, but the terms still charge GST calculated on the standard 1.95% rate. Exclusions and fair-usage conditions apply. The cheapest quoted percentage is not always the lowest effective cost.
What Does a Payment Gateway Actually Charge?
Start by asking for a fee schedule by payment method. A quoted rate may describe a platform fee, a transaction charge, or a combination specified in the merchant agreement. Do not assume that MDR, TDR and platform fee are interchangeable on every price sheet.
The cost items worth checking are:
| Cost | Question for the provider |
|---|---|
| Transaction or platform fee | What is charged on each successful UPI, debit card, credit card, net banking and wallet payment? |
| GST on fees | What is the taxable amount, including when a promotional fee is waived? |
| Setup and maintenance | Is there an onboarding charge, recurring fee, minimum commitment or paid support tier? |
| Refunds and disputes | Is the original fee credited after a refund? Is there a separate refund or chargeback charge? |
| Faster settlement | What is the default cycle, and what does same-day or instant access cost? |
| Other methods | What do EMI, subscriptions and international payments cost? |
| Payment performance | How many attempted orders become paid orders, and why do the rest fail? |
A payment gateway pricing page is a starting point. Your executed agreement and the current offer terms determine what your business actually pays. If your business needs only occasional collection from invoices, also compare the cost and setup of Payment Links against a full website integration.
Also read: How to choose a payment gateway for your business
Why a 0% Payment Gateway Offer May Still Have a Cost
“0%” needs an object: zero which fee, on which transactions, for how much volume, and until when? It may waive a platform fee while tax or excluded-method fees still apply.
Cashfree’s festive offer terms say that eligible new merchants who sign up and complete onboarding during the campaign can process up to ₹20 lakh in cumulative eligible domestic Payment Gateway volume without paying Cashfree’s platform fee. The offer runs until 31 March 2027, or ends earlier if the merchant uses the benefit or is disqualified. Unused eligibility expires with the campaign. After the offer, the listed standard platform fee is 1.95% plus applicable taxes; payment-method-specific pricing or a custom agreement may differ.
There are three details to budget for:
- GST is still deducted. Cashfree’s offer terms state that GST on the platform fee is calculated using its standard 1.95% pricing even when that fee is waived. At the stated 18% GST rate, ₹1 lakh of eligible sales would have a ₹351 GST deduction on that basis, assuming no other charges. This is not a claim that every tax treatment is identical across providers.
- Some payment methods are excluded. The offer excludes, among others, corporate credit cards, prepaid cards, EMI, pay-later instruments, subscription e-mandates and international payments. American Express and Diners Club are also excluded. Check the complete list before estimating savings.
- A credit-card-share condition applies. Once total processed GMV reaches ₹1 lakh, Cashfree may review whether credit card transactions account for 60% or more of processed GMV. If they do, Cashfree reserves the right to withdraw the offer for subsequent transactions. The terms also exclude merchants with custom pricing for a payment method and certain partner referrals.
The offer includes a T+1 settlement cycle by 8 PM IST during the campaign, subject to the published terms. Cashfree lists zero setup fee on its pricing page. Optional premium services can have separate charges. Verify eligibility and the current terms before publishing a rate or committing to a cost forecast.
“0% platform fee” is not “no deductions on every payment.” Model GST, excluded payment methods and what happens when your eligible cumulative volume reaches ₹20 lakh or the campaign ends. Read the offer terms before using the promotion in a forecast.
Compare an Introductory Offer With the Long-Term Rate
Use the same payment mix and time horizon for every quote. Record the introductory benefit, excluded methods and conditions, then calculate the standard-rate cost after the offer ends. Ask for a custom quote if your volume justifies one. A side-by-side Cashfree checklist appears below.
Calculate the Effective Payment Cost for Your Business
Use completed transactions, not just the rate on your most common method:
Effective processing cost = (transaction fees + applicable tax on fees + fixed fees + refund and dispute charges + optional settlement charges) ÷ value of successful payments
If your business can claim input tax credit on a fee, finance should show both the cash deduction and the eventual net tax cost, subject to its eligibility. Keep payment success and recovered orders as separate measures; adding attempted order value to a fee denominator would distort the result.
Here is a simple example using Cashfree’s published offer terms, assuming the merchant is eligible throughout, all ₹10 lakh of payments use included domestic methods, and there are no other charges:
| Item | Amount |
|---|---|
| Successful eligible payments | ₹10,00,000 |
| Platform fee at 0% during offer | ₹0 |
| GST under the offer’s stated basis: ₹10,00,000 × 1.95% × 18% | ₹3,510 |
| Total immediate fee-related deduction in this limited example | ₹3,510 |
For comparison, at the listed post-offer platform fee of 1.95%, the fee on the same ₹10 lakh would be ₹19,500, plus ₹3,510 GST at 18%, or ₹23,010 before other costs. These figures are examples, not a personalised quote. The ₹20 lakh offer limit is cumulative during the campaign, not a fresh ₹20 lakh allowance each month. Cashfree’s current terms also provide for offer withdrawal under the card-share condition described above.
Example with an excluded payment method: Suppose the merchant also receives ₹2 lakh through international Visa or Mastercard cards in the same period. Cashfree’s published standard rate for these cards is 2.99%, and the domestic introductory offer does not cover international transactions.
| Transaction group | Value | Platform fee | GST at 18% on the stated fee basis | Fee and tax deduction |
|---|---|---|---|---|
| Eligible domestic payments during the offer | ₹10,00,000 | ₹0 | ₹3,510, calculated on standard 1.95% basis | ₹3,510 |
| Excluded international card payments at listed 2.99% | ₹2,00,000 | ₹5,980 | ₹1,076.40 | ₹7,056.40 |
| Combined | ₹12,00,000 | ₹5,980 | ₹4,586.40 | ₹10,566.40 |
This example assumes the merchant remains eligible, those transactions use the listed rates and no other charges apply. International currency conversion or other account-specific charges would need a separate quote. It shows why applying “0%” to all ₹12 lakh would understate the cost.
Your actual calculation should split sales by method. For example, if some orders use excluded EMI or corporate credit cards, price those transactions separately instead of applying 0% to the whole month. If you take a substantial share through UPI checkout, check the applicable fee and legal position at publication time. The proposed new MDR on certain UPI merchant payments was postponed from its planned 15 October 2026 start, with a later effective date to be notified. Do not present it as a charge already in force.
Also read: What MDR on refunds can mean for your payment costs
When Is the Lowest Fee Not the Lowest Cost?
A price comparison should also measure what happens between a customer pressing Pay and an order becoming paid. A cheaper fee on successful transactions will not compensate for preventable checkout failures if the affected customers do not return. But a failed payment attempt is not automatically a lost sale: the customer might retry successfully. Measure final paid orders and recovered orders separately.
If you process ₹10 lakh in attempted order value and 1% more of that value converts into completed payments, that represents ₹10,000 in additional gross order value, assuming comparable order sizes and no later recovery. It is not ₹10,000 of profit. Compare the gross margin on those additional orders with the fee difference and any cost of improving checkout. Use your own data by bank, payment method and device to make the decision.
Review ecommerce payment failures alongside price. For a high-volume business, ask whether payment routing can steer eligible payments around an unavailable route, and whether its incremental cost is justified by measured recovered orders. That decision should come from a test on your traffic, not a generic success-rate claim.
Refund-heavy businesses should also track what happens to the fee on a captured payment and any separate refund charge. A merchant with a large return rate may pay meaningful fees on orders that are later reversed. Reconciling payments, refunds and settlements makes that cost visible rather than burying it in a single bank-credit number.
Match the Fee Model to How You Collect Payments
A low standard card rate may be attractive for a simple store, but your actual workflow may create costs elsewhere:
- Small ecommerce store: Compare domestic payment mix, failed-order recovery, refunds and plugin or checkout needs. A quick checkout can matter, but measure its effect on paid orders.
- Subscription business: Check mandate creation, recurring debit, retry and failed-payment charges. The subscription payment price can matter more than a one-time checkout rate.
- Business selling abroad: Compare international card fees, currency conversion and settlement, rather than applying a domestic promotional rate. Review the international payment gateway terms separately.
- Business with urgent supplier payments: Compare the standard settlement cycle with the price of Instant Settlements. Faster access to cash is useful when it offsets financing or operating costs.
This is why a single “cheapest” ranking cannot cover every merchant. A useful quote names the payment methods, volume, refund rate, settlement needs and services included.
Also read: Payment gateway costs and operational priorities for high-volume startups
Where Cashfree Fits in a Cost Comparison
Cashfree’s Payment Gateway supports domestic methods through one integration. Here is a side-by-side checklist in the style of a provider comparison. The Cashfree column uses its published pricing and offer terms; the final column tells you what to request from any other gateway, without implying that all providers share one rate or policy.
| What to check | Cashfree’s published terms and capabilities | Ask any other gateway |
|---|---|---|
| Introductory offer | 0% platform fee on up to ₹20 lakh cumulative eligible domestic volume, for qualifying new merchants during the campaign ending 31 March 2027 | What cumulative cap, end date and onboarding requirements apply? |
| GST during offer | The terms say GST is deducted using the 1.95% standard pricing basis even when the platform fee is waived | Is tax calculated on a waived fee, a discounted fee or only the amount charged? |
| Payment-method exclusions | Corporate credit cards, EMI, prepaid cards, pay-later, subscription e-mandates and international payments, among others, are excluded | Which methods are excluded, and what rates apply to them? |
| Credit-card share | Cashfree may withdraw the offer if credit card transactions reach 60% or more of processed GMV, assessed after ₹1 lakh total GMV | Is there a payment-mix or fair-usage condition? |
| Standard domestic platform fee after offer | 1.95% plus applicable taxes under the published standard offer terms; method-specific and custom rates can differ | What will each method cost after any promotion? |
| Setup and maintenance | Zero setup fee on the pricing page. Standard gateway pricing lists no routine AMC; optional premium services may have an annual charge | Are setup, AMC, support or minimum-volume fees charged? |
| Settlement | T+1 by 8 PM IST under the campaign terms; optional Instant Settlements start at 0.30%, with eligibility and pricing variations | What is the default cycle, and what does faster settlement cost? |
| Checkout reach and reporting | Cashfree lists 180+ payment modes and provides dashboard reports for transactions, refunds and settlements | Which methods are active for my account, and which reports are included? |
For a card-heavy merchant, the 60% condition is especially important. For corporate cards, EMI and international payments, include separate rates from the start. Payment Links, UPI collection, settlement options and subscription payments solve different workflows, so price each feature against how you actually sell. Then compare checkout performance and refund reports using your own orders. The fee per successful payment is one number; the cost of collecting, recovering and reconciling it is the fuller decision.
Conclusion
The cheapest payment gateway in India is the one with the lowest effective cost for your payment mix while reliably turning checkout attempts into paid orders. Read the rate card and the offer terms together. Calculate tax and excluded methods, then add refunds, settlement preferences and any fixed charges before deciding.
Cashfree’s current platform-fee offer can lower the introductory cost for eligible domestic volume, but it has conditions and still carries the GST deduction described in its terms. Price the standard period as carefully as the promotion so your decision remains sound after the offer ends.
Want to compare costs using your own payment mix?
Share your expected UPI, card and other payment volume with the Cashfree team. Review the applicable rates, offer eligibility, settlement needs and expected deductions together.
Talk to our team*Offer terms and eligibility apply. Check the current pricing page before signing up.
FAQs
Which payment gateway is cheapest for a small business in India?
It depends on your payment methods and actual volume. Compare the total monthly deductions for your expected UPI, card and other payments, including tax, refunds and any fixed charges. A short-lived promotional rate is useful only for the transactions it covers.
Does a 0% payment gateway charge mean I pay nothing?
No. The headline may waive only the platform fee on eligible transactions. Cashfree’s current offer terms state that GST is still calculated on its standard 1.95% platform-fee basis, while excluded methods carry standard fees. Check any provider’s written terms for the exact scope.
Is Cashfree’s ₹20 lakh 0% offer renewed every month?
No. Its published offer describes up to ₹20 lakh in cumulative eligible transaction value during the campaign, subject to the earlier end conditions, exclusions and fair-usage terms. Unused benefit expires when the campaign ends.
Are UPI payments always free for merchants?
Do not assume that UPI MDR and a provider’s platform fee are the same thing. Applicable law, the payment instrument and your provider agreement determine the charge. Check the current rules and your signed rate card; the proposed 2026 UPI MDR rollout was postponed from 15 October.
How should I compare payment gateway success rates with fees?
Use the same period and mix of payment attempts, then track final paid orders and recovery after failures. Multiply any incremental paid orders by your contribution margin, and compare that result with the difference in processing and operating costs. A higher payment success rate alone does not prove higher profit.
