A search for payment gateway charges India turns up the same handful of large gateways and the same shape of pricing at each: no setup fee on the standard plan, a percentage of each successful transaction, and 18 percent GST on that percentage. The headline rate is usually around 2 percent for domestic cards, netbanking and wallets, with UPI priced lower or waived on some plans. The real differences between the gateways sit around that number: how UPI is priced, what instant settlement costs, how refunds and chargebacks are handled, and how well each fits a food business that takes most of its money through UPI. This comparison lays out payment gateway charges in India for a restaurant, with a worked example on a ₹500 order.
How a gateway charge is built
Three terms get mixed up, and the mix-up costs money.
MDR, the merchant discount rate, is what the card networks and banks charge for processing a card payment. It is set by regulation for debit cards and by the networks for credit cards. The government has kept MDR at zero on UPI and RuPay debit card payments since the start of 2020.
Gateway fee is what the gateway charges you for its service: the checkout, the confirmation, the dashboard, refunds, settlements and support. On the standard plans, this is the percentage you see on the pricing page, and it includes whatever MDR applies underneath. This is why a gateway can charge a fee on UPI even though the UPI rail itself carries no MDR: you are paying for the plumbing around the payment.
GST at 18 percent applies to the gateway fee, not to the transaction. Most standalone restaurants pay GST at 5 percent without input tax credit, so the GST on gateway fees is a cost you cannot claim back; only restaurants on the 18 percent rate with input credit can offset it. Either way, budget for the fee as 2.36 percent when the headline says 2.
Every rate below is the standard, self-serve plan. Every major gateway negotiates lower rates for higher volumes, and the rate a ₹30 lakh-a-month chain gets is not the rate on the public page.
Payment gateway fees comparison: the main types of gateway
| Gateway | Positioning | Pricing model (standard plan) | Worth knowing for a food business |
|---|---|---|---|
| Razorpay | Developer-first, the widest spread among online ordering platforms and apps | No setup fee; flat percentage per transaction, around 2 percent for domestic cards, netbanking and wallets; UPI and international priced separately | Payment links, QR codes and Route (split payments for platforms) are mature; most ordering tools integrate it first |
| Enterprise-focused gateways | The older, established gateways, strong with larger e-commerce and enterprise merchants | No setup fee; flat percentage per transaction on the standard plan; EMI and more card options | Suit a restaurant group with its own app and finance team more than a single outlet |
| Payments-plus-payouts gateways | Collecting and sending money (refunds, vendor payments) from one account | No setup fee; flat percentage per transaction; some have listed lower pricing on certain methods at times | Useful if you also pay riders and suppliers from the same balance |
| Gateways run by UPI apps | Built on the UPI app's large user base; also sell QR codes and sound boxes for counters | Pricing listed by payment method; UPI is the strength | Good fit when counter and online UPI should sit in one dashboard |
All rates described here are as listed on each company's website at the time of writing; check their pricing pages before deciding, because plans and method-wise pricing change without notice.
In practice, the choice for a small restaurant is usually made by the ordering system rather than the gateway. If your store page or WhatsApp ordering tool supports one gateway, that is the one you use, and the Razorpay setup guide exists because that is most often the answer.
What a ₹500 order actually costs
Take a ₹500 prepaid order and run it through four pricing models.
- Card or wallet at 2 percent plus GST: ₹10 fee plus ₹1.80 GST, so ₹11.80. You receive ₹488.20.
- UPI at 1 percent plus GST (a hypothetical lower UPI rate some plans offer): ₹5 plus ₹0.90, so ₹5.90. You receive ₹494.10.
- UPI at zero gateway fee (where a plan waives it, or a bank QR is used): ₹0. You receive ₹500 in T+1 or T+2.
- The same order on an aggregator at 25 percent commission plus GST on the commission: ₹125 plus ₹22.50, so ₹147.50. You receive ₹352.50.
The gateway fee is a rounding error next to commission. The number to compare it with is what the platform in between charges: an ordering platform with a flat per-order fee adds a fixed amount per order on top of the gateway, and the platform fee versus commission post works through those three models side by side. Over a month of 1,500 online orders, a 2 percent gateway on a ₹500 average is about ₹17,700; the aggregator at 25 percent is about ₹2.2 lakh.
The charges behind the headline rate
The percentage is the fee you will notice. These are the ones you will not, until the settlement report.
- Instant settlement. Every gateway settles by default in T+1 to T+3 working days, and charges an extra percentage to move the money the same day. Used daily, this can double your effective gateway cost. The settlement cycles post explains when it is worth paying.
- Refund fee retention. When you refund a payment, some gateways keep the original transaction fee. On a restaurant with a few cancellations a day, this adds up.
- Chargeback fees. A card customer disputing a payment with their bank triggers a flat fee and a document request, whatever the outcome. UPI has no chargeback mechanism in the same sense, which is one more reason UPI-heavy restaurants pay less.
- International cards. Higher percentage, currency conversion margin, more disputes. Switch them off unless you ship abroad.
- Minimum settlement and account inactivity. Some gateways hold very small balances until a threshold. Rarely relevant for a restaurant, but read the terms.
- Add-on products. Payment pages, subscriptions, payouts and sound boxes may carry their own charges or rentals.
How to choose for a food business
Five questions settle it.
- What share of your payments is UPI? For most Indian restaurants it is the large majority. Compare the UPI rate specifically, not the card rate on the banner.
- Which gateway does your ordering system support? A better rate elsewhere means nothing if it cannot plug into your checkout.
- What is the default settlement cycle, and what does faster cost? T+1 by default is worth a slightly higher rate for a kitchen buying stock daily.
- Can you connect your own account to the platform? Some ordering platforms route payments through their own gateway account and add a platform fee on top; others let you connect your own gateway account so settlements come straight to you. The bring-your-own-Razorpay post describes how that works and what it saves.
- How do refunds and disputes get handled? Look for refunds from the dashboard in two clicks and a clear statement on whether the fee comes back.
- How often does the checkout succeed? Ask whether UPI intent (the customer's app opens directly) is supported and what share of UPI attempts complete. A gateway that is a fraction cheaper and fails more often costs you more in lost orders than it saves in fees.
Tezzu, as one example of how a platform handles this, runs checkout through Razorpay with UPI, cards and cash on delivery, charges a flat ₹10 per order with no commission, and lets you connect your own Razorpay account so online payments carry no platform fee at all. The broader picture of UPI options, from counter QR to payment links, is in the UPI payments guide.
See what a direct order costs end to end
Gateway fee, flat per-order fee and no commission: the pricing page lays out exactly what you pay on each order and each plan.
See pricingFrequently asked questions
Which payment gateway has the lowest charges in India?
On standard plans the major gateways are close, all around 2 percent plus GST for cards, netbanking and wallets. The difference shows in UPI pricing, which some gateways list lower or waive, and in extras like instant settlement and refund fee retention. For a restaurant where most payments are UPI, compare the UPI rate on each pricing page rather than the headline, and check which gateway your ordering system supports.
Is there any charge on UPI payments through a payment gateway?
The UPI rail itself carries no merchant discount rate, by government policy since 2020, so a bank or app QR costs nothing per transaction. A gateway may still charge a fee on UPI collected through its checkout or payment links, because you are paying for confirmation, refunds and reporting. Rates vary by gateway and plan, and some waive UPI fees for small merchants; check the pricing page.
What is MDR and who pays it?
MDR, the merchant discount rate, is the charge banks and card networks levy on a merchant for processing a card payment; it is set by regulation for debit cards and by the networks for credit cards. The merchant pays it, usually bundled into the gateway's percentage. It is zero on UPI and RuPay debit card payments under current policy. Customers are not supposed to be charged MDR directly.
Do payment gateways charge GST on their fees?
Yes. GST at 18 percent applies to the gateway's service fee, so a 2 percent fee costs 2.36 percent all in. The GST is on the fee only, never on the order value. Most standalone restaurants are on the 5 percent GST rate without input tax credit, so the GST on gateway fees is a real cost; only restaurants on the 18 percent rate with input credit can claim it back.