TL;DR — Pick by use case
- Razorpay — Default for startups, SaaS, subscriptions, marketplaces. Best developer experience.
- PayU — Pick if you need EMI on cards heavily (electronics/D2C), or have a large enterprise account team.
- Cashfree — Best for vendor payouts and bulk disbursals. Marketplace pay-outs to sellers.
- PhonePe Business — Lowest UPI fees if >90% of your traffic is UPI. Weaker on cards/international.
The 4 gateways at a glance
| Gateway | Standard fee (UPI) | Cards (domestic) | International cards | Settlement |
|---|---|---|---|---|
| Razorpay | 2% platform fee (0% MDR)* | 2% | 3–3.5% + FX | T+2 (faster on plans) |
| PayU | 0% MDR (plan fee)† | 2% | 3% | T+1 to T+3 |
| Cashfree | 0% MDR (plan fee)† | 1.95% | 3% + ₹7 | T+1 (instant tier) |
| PhonePe Business | 0% MDR (plan fee)† | 2% | Limited support | T+1 |
The gotcha: "0% UPI" is now a platform-fee battleground, not a fact. RBI's zero-MDR covers the bank/NPCI side only — the gateway's own platform fee is separate, and Razorpay's standard is 2% on UPI. PayU, Cashfree and PhonePe price UPI per plan. Don't pick on the headline rate.
* RBI zero-MDR covers bank/NPCI charges on UPI; gateway platform fees apply on top. Razorpay: 2% standard on UPI (90-day 0% launch offer for new merchants — see below). † Plan-dependent; confirm at signup.
What changed in 2026
1. UPI fees are under review — for real this time. NPCI and RBI are consulting banks and payment firms on a ~0.4% merchant fee on UPI payments above ₹2,000 (Reuters, September 2026). It is not final, and the government has clarified that UPI transactions up to ₹2,000 stay free. If implemented, UPI-heavy D2C and service businesses finally carry a real UPI cost line — build a 0.4–0.5% buffer into 2027 pricing models, but don't price it in yet.
2. Wallet-funded UPI already costs more. UPI payments made from wallet balances (not bank accounts) attract PPI interchange of ~1.1% on merchant transactions above ₹2,000. If a meaningful share of your customers pay via wallet-linked UPI apps, this is live today — not hypothetical.
3. Razorpay's launch offer reset the entry price. New merchants who complete KYC and activate on or after 1 July 2026 get a 90-day / ₹5 lakh GMV window with 0% platform fee on eligible domestic payments (₹199 KYC fee and GST still apply). For a new SMB, the first ₹5L of collections now costs roughly nothing.
4. BNPL consolidated. ZestMoney shut down in December 2023. The surviving mainstream partners on Indian gateways are Simpl, LazyPay, ICICI Pay Later, HDFC Flexi Pay and Axio — treat BNPL as a conversion tool, not a revenue stream.
Razorpay — the default choice for tech-first businesses
Pick Razorpay if:
- You're a startup, SaaS, or anyone whose engineering team will integrate the API directly
- You need recurring billing / subscriptions (their Subscriptions product is best-in-class in India)
- You're building a marketplace and need
RazorpayXfor split payments - You want strong developer documentation and webhooks that actually work
Watch out for:
- International card MDR is competitive but not the cheapest
- Their support is slower for low-volume merchants — premium support is on Enterprise plans only
- Onboarding can be slow if your business category is "high-risk" (gaming, dating, betting-adjacent)
What integration looks like
Razorpay's checkout drops in via a script tag — for a basic order flow you can be live in a day. Subscriptions take a week (recurring mandate setup, webhook handling, retry logic). Their Node, Python, and PHP SDKs are all maintained.
PayU — the EMI specialist
Pick PayU if:
- You sell big-ticket items (electronics, furniture, courses ₹20K+) where credit-card EMI is a major conversion lever
- You're an established business with the volume to negotiate lower MDR (PayU's enterprise team is aggressive)
- You need their Indian + LATAM coverage (PayU is part of Naspers/Prosus group, with LATAM presence)
Watch out for:
- Developer experience is dated compared to Razorpay/Cashfree — older docs, slower SDK iterations
- Onboarding is paperwork-heavy. Plan 7–14 days for activation
- Their checkout UI feels less modern than Razorpay's; conversion-test it before committing
Cashfree — the payouts king
Pick Cashfree if:
- You run a marketplace and need to pay out to vendors / freelancers / drivers in bulk
- You need IMPS/NEFT/UPI payouts at scale (refunds, salaries, vendor settlements)
- You want T+1 settlement as standard, not as a paid upgrade
- You're operating cross-border (Cashfree's international corridor is solid)
Watch out for:
- Their checkout product is solid but ecosystem (subscription tooling, BNPL) is thinner than Razorpay's
- If you don't need payouts, you're paying for capability you won't use
PhonePe Business — the UPI-native choice
Pick PhonePe Business if:
- >90% of your customers pay via UPI (typical for D2C, food delivery, local services)
- Your customer base skews younger / mobile-first (PhonePe brand recognition helps conversion)
- You don't need international cards or complex subscriptions
Watch out for:
- Card support is functional but not their focus — for card-heavy flows, Razorpay/PayU win
- Subscription/recurring product is newer and less mature
- Brand-locked checkout (PhonePe-branded UI) — fine for some, not for premium B2B
The hidden costs nobody mentions
1. International transaction MDR
If even 5% of your customers pay with international cards, you'll feel this. International MDR is 3–4× domestic. Negotiate this line item even on default plans.
2. Refund fees
Some gateways charge ₹3–5 per refund. If you're in a category with returns (D2C apparel: 20–30% return rate), this adds up to ₹50K+/year on ₹5L/month volume.
3. Failed-transaction MDR
You don't pay when a transaction fails — but you also don't get the customer's money. If your checkout has a poorly-tested 3DSecure flow, you can lose 8–15% of attempted transactions. The gateway you pick affects this less than your own UX testing does.
4. Settlement delays
"T+2" means today's sales hit your bank in 2 working days. For a Friday sale, that's Tuesday. For festival weekends, it can stretch. Plan working capital accordingly. Faster settlement (T+1, instant) usually requires a higher-tier plan or higher MDR.
5. KYC re-verification
Every 6–12 months, gateways re-run KYC. Have your incorporation docs, GST cert, bank statement, director PAN/Aadhaar handy in a folder. Unprepared re-KYC can pause your settlements for 3–7 days.
What we recommend at Big Helpers (and why)
For 80% of the SMB and startup builds we ship: Razorpay. The developer experience, subscription product, and ecosystem are best-in-class for India in 2026. Integration is fast, support docs are accurate, and webhooks behave.
For marketplaces with vendor payouts: Cashfree Payouts (you can layer it alongside Razorpay collections — they're not exclusive).
For D2C electronics / EMI-heavy: dual-integrate Razorpay + PayU EMI. Show PayU only on EMI-eligible orders ₹15K+. Conversion lift on big-ticket items is meaningful.
You don't have to pick one. We routinely build with Razorpay as primary + Cashfree Payouts for vendor disbursals. Two integrations, no overlap, no extra cost. See SME automation builds →
FAQ
Can I use Stripe in India?
Stripe India is now live for Indian-incorporated businesses. It's strong for international card collections and developer experience. But for domestic UPI dominance, Razorpay still leads. We use Stripe primarily for businesses with >30% international revenue.
What about RazorpayX vs Cashfree Payouts for vendor payments?
Both work. RazorpayX is better integrated if you're already on Razorpay collections. Cashfree Payouts has slightly better edge cases (UPI ID payouts, instant IMPS reliability). Test both with ₹100 transactions before committing volume.
Do these gateways support BNPL (Buy Now Pay Later)?
Razorpay and Cashfree both support BNPL via partners (Simpl, LazyPay, ICICI Pay Later, HDFC Flexi Pay, Axio — ZestMoney shut down in Dec 2023). Conversion lift is real for ₹2K–₹15K orders. MDR is higher (~3.5%), but BNPL customers convert at 1.5–2× the rate of cash-on-delivery.
Last reviewed: 14 October 2026 · Razorpay and PayU pricing re-verified against vendor pages; UPI fee consultation status covered. MDR figures based on standard SMB plans as published — negotiated enterprise plans may vary materially.
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