Zero MDR Payment Gateway in India: What 0% Really Means

Is Cashfree the Right Value When You Compare Payment Gateway Charges in India?

Every merchant aiming to integrate a payment gateway has two questions:

1. Which is the best payment gateway in India?
2. How much will I have to pay for using a payment gateway in India?

The answer differs from business to business, but the principle is the same. You need a gateway that offers reliability and high success rates. As for the pricing, paying a premium to get these two features can be justifiable when measured gains outweigh the cost.

To make the decision easier for you, Cashfree is one payment gateway in India to evaluate. Cashfree is currently running a Festive Offer that waives platform fees entirely for eligible new merchants on their first Rs 20 lakh of cumulative domestic GMV, subject to exclusions. Once you scale past that cap or the offer ends, the standard domestic rate is 1.95 percent plus 18 percent GST, with zero setup or annual maintenance charges on the standard plan.

To help you better understand, we will not limit our discussion today to the headline transaction fee alone. To find the true cost of using a payment gateway, we need to factor in fixed charges, applicable taxes, settlement cycles, and other services.

What Are You Paying For? Payment Gateway Platform Fees

Decision	Cashfree detail	Why it matters
Avoiding Fixed Costs	Cashfree offers zero setup and zero annual maintenance charges.	This means your standard transaction fee applies when you make a sale, with no setup costs or yearly maintenance bills. Check optional charges and taxes separately.
Clear Transaction Costs	0% platform fee on the first ₹20 lakh of eligible cumulative domestic sales. After that the standard rate of 1.95% + GST applies. The campaign end date can apply earlier.	You keep more of eligible payment revenue to fund growth. Cashfree offers a flat rate for standard domestic methods when you scale; GST, exclusions and the cap still matter.
You Don’t Have a Website	Cashfree offers payment links, forms, and softPOS. All these are included without extra product costs; applicable transaction fees and taxes remain.	You can start accepting payments right after setup. Send payment links through WhatsApp. No development needed.
Recurring Billing Automation	Ready to use tools are added in Cashfree’s suite for Cards, eNACH, and UPI AutoPay, with separate subscription pricing.	Businesses using supported no-code flows can set up repeat payments for loyal customers, subject to mandate setup, integration and method-specific charges.

Does Zero MDR Mean Zero Charges?

Zero MDR on eligible bank-to-bank UPI transactions does not make any gateway free. Where the bank MDR is zero, the platform fee the gateway quotes is a separate cost to check. Cashfree’s Festive Offer waives this platform fee for new merchants on qualifying transactions up to the Rs 20 lakh cap. Quote optional products, special payment methods, and premium settlement services separately.

Do not assume every UPI payment has zero MDR. The Department of Financial Services’ UPI MDR FAQs specify 0.4% MDR on defined P2M payments above ₹2,000 from 15 October 2026, capped at ₹300, with exemptions. Review the relevant UPI charges and MDR rules and confirm whether your gateway quote includes any instrument-level charge.

Also Read: Merchant Discount Rate: Meaning, Charges and Calculation

What If Access to Funds Matters More Than the Lowest Fee?

If your business needs funds sooner for inventory, ad spend, or vendor payouts, compare settlement options alongside transaction fees. Cashfree offers two settlement acceleration options:

The Festive Offer specifies T+1 settlement by 8:00 PM IST as the default settlement cycle during the campaign. Outside the offer, confirm the configured cycle in your account rather than assuming T+2 applies to every merchant.

Cashfree Instant Settlements credits eligible funds to your bank account through configured on-demand or scheduled options, available 24×7, including on bank holidays. Actual timing depends on the settlement option, account limits and banking rails. Pricing starts at 0.30 percent plus GST, with the exact rate dependent on the Instant Settlements type chosen and the risk assessment of your business.

This gives you another lever when evaluating total cost. Match the settlement arrangement to your cash flow needs, and weigh any additional cost against the operational benefit of faster access to money.

Also Read: Payment Settlement Cycle Explained

Compare 0% MDR Payment Gateway Offers Using Their Actual Terms

Every Indian payment gateway runs some version of a 0 percent welcome offer, and the headlines look similar. The real differentiator is in the fine print. The table below compares Cashfree’s Festive Offer against publicly documented offers from two other industry providers.

Offer dimension	Cashfree Festive Offer	Industry provider A	Industry provider B
Headline platform fee	0% on qualifying domestic transactions	Ranges between 2% to 3%	Ranges between 2% to 3%
GMV cap	₹20 lakh	Typically Rs 2 to 5 lakh	Typically Rs 5 to 10 lakh
Offer duration	Till 31 March 2027	Shorter, typically 60 to 90 days	Capped by GMV with no fixed end date
Settlement cycle	T+1 and Instant Settlement	Standard timeline (T+2 or T+3)	Standard timeline (T+2 or T+3)
GST handling under the offer	18% GST on MDR	18% GST on MDR	18% GST on MDR
Post-offer standard rate	1.95% + GST	2% + GST	2% + GST
Setup fee / AMC	Zero setup, zero AMC	AMC is applicable on premium tiers	AMC is applicable on premium tiers
Dedicated account manager	Included for GST-registered businesses	Usually gated to enterprise tier or paid add-on	Usually gated to enterprise tier or paid add-on

Reading the table: Headline percentages across the industry are similar, but the GMV cap, duration, exclusion count, settlement cycle, and included services shift the real value significantly. A larger offer headline is not enough on its own. Match the offer terms to your actual payment mix and timeline before deciding.

Excluded methods under Cashfree’s Festive Offer

• American Express (AMEX) cards
• Diners Club cards
• Corporate credit cards
• All EMI-based payment methods
• Prepaid card transactions
• Pay Later instruments
• Subscription (e-mandate)
• International Payment Gateway (IPG) transactions
• Any other payment method with a standard MDR of 3 percent or higher

These are Cashfree’s exclusions. Check exclusions across other 0 percent offers in the Indian market as well, because the underlying card schemes and credit providers can have different costs for these methods. Do not assume the platform absorbs every cost during a promotional waiver.

Fair-usage conditions

Cashfree reserves the right to withdraw the offer if credit card transactions constitute 60 percent or more of GMV, evaluated once your GMV reaches Rs 1 lakh. Only the first activated MID under a PAN or bank account qualifies. Confirm these conditions before building the offer into your forecast.

Post-offer rate

Cashfree reverts to 1.95 percent plus applicable GST once the Rs 20 lakh cap is reached or the campaign ends.

GST handling

GST at 18 percent on platform fees is not waived, even during the offer. It continues to be deducted from settlements and is computed on the standard 1.95 percent rate under the published offer terms.

Compare Value With Measured Outcomes and Actual Costs

Compare the complete cost for the same payment mix and successful sales volume. Include gateway fees, applicable tax, fixed charges, and optional services. A lower rate is cheaper when other variables are equal. Measure any claimed conversion, retry, or success-rate improvement separately. Do not fold an unmeasured uplift into your base cost model.

For example, on Rs 10 lakh of successful payment value, a 1.95 percent platform fee is Rs 19,500 before GST. During the Festive Offer, the platform fee on the same Rs 10 lakh is Rs 0, saving Rs 19,500 outright. Over the full Rs 20 lakh cap, the saving is Rs 39,000 in platform fees before GST, while Rs 7,020 of GST still applies under the offer’s stated calculation. Rs 46,020 is the standard fee-plus-GST cost on Rs 20 lakh, not the offer saving.

For an illustration with ₹10 lakh of fully eligible payments, no optional services and no excluded-method charges:

Cost component	Standard 1.95% pricing	Platform-fee waiver
Platform fee	₹19,500	₹0
GST under the stated terms	₹3,510	₹3,510
Total fee and GST deduction	₹23,010	₹3,510
Saving against standard pricing	Not applicable	₹19,500

The offer’s stated tax deduction is therefore equivalent to 0.351% of the eligible payment value before any other applicable charge. This follows the provider’s published terms; reconcile the actual tax invoice and settlement statement.

For a bootstrapped business reinvesting into ad spend or inventory during the ramp phase, this reclaimed capital is meaningful.

Beyond payments: what grows with you after the offer

As your business grows, evaluate the additional products that match the new workflow. Cashfree bundles three collection products with the Payment Gateway without a separate product charge: Payment Links, Payment Forms, and softPOS. Applicable transaction charges and taxes still need to be included. These cover share-based collection, custom branded checkout pages, and turning a supported Android phone into a POS.

Products with separate pricing because they add specific capability:

• Subscriptions for recurring billing: Cards and eNACH list ₹7.50 for mandate creation plus ₹7.50 per presentation. UPI AutoPay lists ₹7.50 for creation plus ₹5 per presentation below ₹1,000, or ₹15 at ₹1,000 and above. Applicable transaction fees and GST are additional.
• Easy Split for automated vendor commission splits, with published pricing of 0.20 percent, subject to the applicable quote and GST.
• Instant Settlements for eligible faster settlement options from 0.30 percent, excluding GST.
• Payouts for disbursing funds to supported bank accounts, UPI IDs, cards or wallets, with per-transaction fees that scale with amount and vary by transfer method.
• International Payment Gateway for collecting cross-border payments in 140+ currencies, with custom pricing on request and method-specific rates.

Check each product’s eligibility, integration requirements, and charges. A gateway offer does not establish that every additional service is bundled in.

How Cashfree’s pricing works

Cashfree’s published standard plan sits at 1.95 percent platform fee plus applicable GST on the Payment Gateway, with no setup fee or AMC. The current Festive Offer waives this platform fee entirely for new merchants on domestic transactions up to Rs 20 lakh GMV, through 31 March 2027.

For merchants on custom pricing or on partner-referred signups, the Festive Offer may not apply. Confirm eligibility in writing. Enterprise accounts negotiate directly on volume, payment mix, and value-added services. Dedicated account managers are standard for GST-registered businesses on both the Festive Offer path and the enterprise plan.

Also Read: Cheapest Payment Gateway in India: Compare Fees and Offers

Five Things to Check Before Choosing a Payment Gateway Offer

Before locking in an offer, verify these points against the current written terms. Cashfree’s cited campaign applies to eligible new merchants signing up on or after 21 July 2026, with KYC approval and account activation required:

1. Which payment methods and merchant categories qualify under the offer?
2. What duration and cumulative transaction limit apply?
3. What is the standard rate that applies after the offer ends or the cap is hit?
4. Which optional products or services carry separate charges even during the offer window?
5. What is the complete cost for your actual payment mix, including GST?

Document each answer. Check the provider’s integration documentation for your intended flow. Compare offers on substance, not on headline percentages.

How to Compare Payment Gateway Charges for Your Business

The easiest method to compare two payment gateways is to look at their gateway fees, while considering the other aspects.

Let’s understand this with an example.

If you are processing ₹10 Lakhs in domestic payments, here’s how the charges differ:

• At standard MDR of 1.95%, the payment gateway will cost ₹19,500 without adding GST.
• Under Cashfree’s current festive offer, this platform fee is 0. You will save ₹19,500 outright.

Now if you scale to ₹20 lakhs sale, you will end up saving ₹39,000. This is how you can compare payment gateways with or without their festive offerings. When comparing, use the following rules:

• Use Successful Sales: Base your calculations on completed orders and not gross checkout attempts or retries.
• Actual Payment Mix: Different payment methods have different rates. Map out how your customers actually pay. For instance, if 60% pay by UPI and 40% use cards, apply the respective fee for each.
• Count Taxes As Well: Track GST separately, including the offer’s calculation basis. With eligible ITC, you may also recover it, subject to the applicable conditions and valid invoices.

For a fair comparison across providers, use the same payment mix, period, order definition, and cost categories. Run a separate sensitivity case for any claimed conversion improvement rather than mixing it into your base model.

FAQs

How do I choose a zero MDR payment gateway in India?

The best payment gateways offer the highest success rates with the lowest total cost of your payment mix. In addition to the platform fee, also consider fixed charges and settlement cycles against your actual total sales volume rather than just comparing headline rates.

What payment gateway charges should Indian businesses expect in 2026?

Domestic payment gateway charges vary by provider and payment method. Cashfree has published standard domestic rates of 1.95% plus 18% GST; Razorpay lists 2% plus GST. Premium methods and custom pricing can differ.

Does zero MDR mean zero charges?

No. The base platform fee can be zero, but that does not establish that every charge is waived. During Cashfree’s festive offering, the eligible platform fee is zero but GST is still deducted using the standard 1.95% calculation basis. Additionally the high-cost payment methods like AMEX, EMI, and international cards are not included in the zero platform fee offerings.

What hidden charges do payment gateways in India have?

Potential additional charges include setup fees, annual maintenance charges (AMC), refunds, chargebacks and premium add-ons. These are not necessarily hidden if properly disclosed. Even if not included in the initial quote, always check for these charges in the complete contract, terms and conditions, and pricing policy documents.

Which payment gateway is best for Shopify stores in India?

Cashfree is one payment gateway option for Shopify stores in India. Cashfree offers a native Shopify plugin, and qualifying transactions can process under the 0% platform-fee offer as part of the festive offering. Compare setup requirements and Shopify’s own third-party transaction fees separately; do not assume a fixed five-minute onboarding time.

Can I get custom pricing on Cashfree?

Yes. Businesses with high average order values, micro transaction volumes, and a specific payment mix can negotiate custom enterprise pricing.

When does the 0% MDR Festive Offer end?

The current Festive Offer runs through 31 March 2027. For each merchant, the offer ends whichever is earliest: (a) the Rs 20 lakh cumulative GMV cap is reached, (b) the campaign end date is reached, or (c) fair-usage disqualification is triggered.

Does the 0% offer apply to international payments?

No. The Festive Offer is valid only on domestic transactions processed through Cashfree’s Payment Gateway. International Payment Gateway (IPG) transactions, including international Visa and Mastercard payments, are excluded. Apply the current international rate for the method and merchant agreement; standard international card pricing is listed at 2.99 percent plus GST.