Payment Gateway Charges in India: Are Free Payment Gateways Really Free?

Every payment gateway in India carries some cost of doing business. But the shape of that cost has changed. Cashfree currently runs a 0% platform fee offer on domestic transactions, up to ₹20 Lakh GMV a month, for new merchants who sign up before 31st July 2026. That pricing stays locked in till 31st March 2027.

Here’s what actually goes into payment gateway charges, what “free” really means in this context, and what Cashfree charges once the offer period ends.

Is There Really a Free Payment Gateway?

For years, “free payment gateway” was a marketing language with no real substance behind it. Every gateway had a setup fee, a maintenance charge, or a transaction cut somewhere. That part hasn’t fully changed. Processing a payment always costs something, somewhere in the chain.

What has changed is who absorbs that cost, and for how long. Cashfree’s current offer waives the platform fee entirely on eligible domestic transactions, UPI, cards, net banking, wallets, and prepaid cards, up to ₹20 Lakh GMV/month. New merchants signing up now get this at 0%, with pricing valid till 31st March 2027.

So is it “free”? Not in the sense of no strings attached forever. It’s free within a defined volume cap, for a defined merchant category, for a defined period. Read past the headline number and check the terms before you build a business model on any “free” claim, Cashfree’s included.

Elements in Payment Gateway Charges

Payment gateway charges constitute of multiple charges from fees for setup to TDR and so on. Let’s understand the common payment gateway charges individually.

1. Setup Fee

This is a one-time fee paid when you integrate a payment gateway on your website/application. The fee is non-recurring in nature. This fee is to cover expenses on

• Onboarding a merchant (eg. document verification, KYC of business, physical verification) and
• Infrastructure cost ( eg every time a bank net banking option is enabled, the payment gateway service provider needs to share merchant details with respective bank and then bank activates the account with it, for this bank may charge some fees)

Cashfree charges zero setup fee. There’s no upfront cost to get started, regardless of your transaction volume.

2. Annual/Monthly Maintenance Fees (AMC)

You might be required to pay a pre-determined sum of money or fee every month/yearly to the payment gateway provider as maintenance charges. These are charges to cover operating expenses, software maintenance, and technology upgradation cost).

The annual/monthly maintenance cost differs based on the following factors

• Mode of payments activated
• Types of integration ( for eg if you have web checkout, the maintenance charges will be lower, while the charges can be high if you opt for advanced integrations like seamless integration)
• Payment gateway features you opt (for eg integrated refund management, auto-billing service etc may be additional features)

Cashfree charges zero Annual Maintenance Charge. You only pay the platform fee on transactions you actually process, whether that’s 0% under the current offer or the standard rate afterward.

3. Transaction discount rate ( TDR )

TDR (also called platform fee or MDR) is the percentage charged on each successful transaction. It varies by payment mode, lower for net banking and UPI, higher for international cards.

Here’s what Cashfree currently charges:

Payment Mode	Standard Rate	Limited Period Offer
UPI, Cards, Net Banking, Wallets (domestic)	1.95%	0%* up to ₹20L GMV/month
UPI on Credit Cards (RuPay)	2.15%	0%* (offer)
Credit Card EMI	From 1.90% + 0.25%	—
Debit Card EMI (HDFC)	1.50%	—
Cardless EMI	1.90%	—
Pay Later (LazyPay, Simpl)	2.20%	—
International Cards (Visa/Mastercard)	2.99%	Not included in domestic offer

Does the Payment Gateway Service Provider Get the Whole TDR?

No, these fee amounts are split between multiple parties to the transaction. Typically, here’s how a 2% charge might be split

• 1.25%: The issuing bank (the card holder’s bank) – applies only for card payments
• 0.15%: Card networks like Visa, Mastercard, Rupay (NPCI) and other intermediaries
• 0.25%: The acquiring bank ( the payment gateway’s bank)
• 0.10%: Payment switch provider – technology service provider for an acquiring bank to connect to card networks and process transactions
• 0.25%: Your merchant account provider (payment gateway service provider who onboards you.

Cashfree Payment Gateway: What You Actually Pay

Right now, Cashfree is offering 0% platform fees on domestic transactions, up to ₹20 Lakh GMV a month, for new merchants. That pricing stays locked in till 31st March 2027.
That volume cap covers meaningfully more transaction value than the equivalent 0% offers other leading gateways run, and the offer stays valid for well over a year rather than expiring after a few months. For a business ramping up ahead of the festive season, that difference shows up directly in the margin you get to keep and redirect into ads, inventory, or logistics instead of gateway fees.

You also get a dedicated account manager if you’re GST-registered, T+1 default settlement, and Payment Links, Payment Forms, and softPOS included at no extra cost with your gateway account.

Frequently Asked Questions

Is Cashfree’s payment gateway really free?

Cashfree currently offers 0% platform fees on domestic transactions (UPI, cards, net banking, wallets, prepaid cards) up to ₹20 Lakh GMV/month for new merchants. It’s not free indefinitely or for all transaction types, but within that cap and period, the platform fee is genuinely zero.

How much does the Cashfree payment gateway cost after the offer ends or the volume cap is crossed?

Once you exceed ₹20 Lakh GMV in a month, the incremental volume is charged at the standard domestic rate of 1.95%. There’s no setup fee or AMC either way.

Does Cashfree charge anything for UPI payments?

UPI transactions (Intent, Collect, AutoPay, and UPI on Credit Cards) are covered under the same 0% offer as other domestic payment modes, up to the monthly GMV cap. Beyond the cap, standard rates apply.

Is there an annual maintenance charge (AMC) on Cashfree?

No. Cashfree charges zero AMC and zero setup fee. You only pay the platform fee on transactions you process.

How does Cashfree’s zero-fee offer compare to other payment gateways?

Several gateways run limited 0% promotions, but the terms differ widely. Cashfree’s current offer covers meaningfully higher transaction volume and stays valid for well over a year, compared to shorter windows and lower volume caps typical elsewhere. Always check the exact cap and expiry before comparing offers.