Restaurant Payments Playbook

This playbook is for the owner of a restaurant, cloud kitchen, cafe, tiffin service or home bakery who takes money at a counter, at the door and inside WhatsApp chats, and who has never written down how. By the end you will have a payment policy on one page: which method applies where, when cash on delivery is allowed and when it is not, the one rule that stops fake payment screenshots, a clear view of what each fee model costs on a ₹500 order, a refund and cancellation policy you can paste onto your store page, and a decision on whether to run your own gateway account or the platform's. The belief it will change is that the gateway fee is the cost to minimise. For most food businesses the gateway fee is the smallest line in the payment column. The expensive lines are refused cash orders, food handed over against a screenshot, twenty minutes a night reconciling notes, and commission on orders that should have come direct. UPI payment for restaurant use is nearly free on the rail itself; what you are paying for, when you pay anything, is confirmation. Getting that confirmation automatic is the whole game.

How money actually reaches a restaurant

Before any policy, it helps to see the four paths a rupee takes from a customer to your account, because each path confirms itself differently, costs differently and lands on a different day.

Personal UPI ID versus merchant UPI ID

A personal UPI ID is tied to a savings account and a person. A merchant ID, issued by your bank or by a business UPI app, is tied to a current account and a business name. The merchant ID shows your business name on the customer's screen, gives you transaction reports, and handles volume without the account being flagged for business use. If you are still collecting into a personal account, moving to a merchant ID is the first step and takes about a day of KYC. Everything in this playbook assumes a current account in the business name.

The four tools and what each confirms

Most restaurants end up with a static QR at the counter and with riders, a gateway checkout for online orders, and payment links for the one-off orders taken in conversation. Cash stays available for the customers who will not prepay, with UPI at the door offered by the rider. The UPI payments guide walks through setting all four up in an afternoon.

Limits worth knowing

Most banks cap a single UPI transaction at ₹1 lakh and apply a daily cap per payer. The cap belongs to the customer's bank, so a ₹1.5 lakh wedding catering advance is better split across two days or taken by bank transfer. Card payments have no such cap but carry a higher gateway rate and a dispute mechanism that UPI does not have.

UPI, payment links and auto-confirmation

The rule that organises this chapter: an order is confirmed by what your system shows, never by what the customer's phone shows. Each place you take money needs a way to meet that rule.

At the counter

A printed merchant QR, large on the counter and small on the bill holder. Confirmation comes from your own bank or app notification, or from a sound box that announces each credit and its amount out loud. At a busy counter the sound box pays for itself in the first week, because nobody has to read a screen and nobody can be shown an edited one. For dine-in with billing software, a dynamic QR printed on the bill carries the exact amount and reference, so the system knows which table paid the moment the money lands.

At the door

Every rider carries a laminated QR for the business merchant ID. The rider does not verify payments; the rider calls the counter, and the counter checks the app. A customer who chose cash on delivery and then pays by UPI at the door is the best of both: the pay-on-arrival trust that makes cash convert, with no notes to count at 11pm.

In chat: payment links

A payment link is a URL for a fixed amount, created in your gateway dashboard and pasted into the WhatsApp chat. The customer taps, picks any UPI app or a card, pays, and the gateway marks the link paid. It is the right tool for advances, catering quotes, custom orders and any order taken in conversation rather than on a store page. The payment link how-to covers the message to send with it. Two limits: someone has to create each link, so at two hundred orders a day it is a bottleneck, and a link sent after the food is cooked gets paid late or never. Send it before you buy the ingredients.

Inside online ordering: checkout

When a customer orders on a store page or through a WhatsApp ordering bot, the last step is a checkout offering UPI, card or cash on delivery. Choosing UPI opens their UPI app directly (the intent flow) or sends a collect request to their UPI ID. The gateway confirms the payment and the order is marked paid before the kitchen sees it. This is the only one of the four paths where nobody on your side does anything, and it is where a gateway fee is most clearly worth paying. If your checkout offers both flows, put intent first; it completes far more often than a collect request the customer has to find and approve. The reasons customers drop at this step, and the fixes, are in the payment failures at checkout guide.

What auto-confirmation is worth: a worked example

This is an illustrative example built from typical numbers, not a named merchant. A cloud kitchen takes 60 online orders a day at an average of ₹450.

• Gateway checkout at 2 percent plus 18 percent GST on the fee: about ₹10.62 per order, roughly ₹640 a day, about ₹19,000 a month.
• Manual confirmation instead: one staff member spends about 20 minutes a day matching screenshots to orders, which at ₹15,000 a month for a 10-hour day is roughly ₹500 a month in wages, plus the orders held while they check.
• One fake ₹1,200 screenshot a week that gets through: about ₹5,000 a month in food handed over for nothing.
• Three orders a day delayed or lost because "it will reflect in a few minutes": at a ₹150 margin each, about ₹13,500 a month.

On these numbers the gateway costs about ₹19,000 and the manual route costs about ₹19,000 in losses and wages while also producing arguments at the counter and a kitchen that cooks on trust. The arithmetic gets more lopsided as volume rises, because the gateway fee scales with orders and the losses scale with distraction. If most of your payments are UPI, compare the UPI rate on your gateway's pricing page rather than the card rate on the banner; some gateways price UPI lower or waive it for small merchants, which cuts the ₹19,000 sharply.

Cash on delivery versus prepaid: a policy you can write down

The answer to "should I offer cash on delivery" is different for a ₹180 lunch from a regular and a ₹2,400 party order from an unknown number. Most food businesses should offer both, with rules about when each applies. This chapter puts numbers on both and ends with the policy.

What cash on delivery really costs

Cash looks free: no gateway fee, money in hand the same evening, customers like it. The costs hide in four places. Refusals at the door, where the food is cooked, the packaging used and the rider's trip made before the customer says no. Prank and fake orders, which cost the customer nothing to place. Cash handling, where riders need change and someone counts notes at the end of the shift. And slower deliveries, because making change on a doorstep takes longer than a tap.

Illustrative: a kitchen delivers 900 cash orders a month and 3 in every 100 are refused. That is 27 refused orders. On a ₹400 order with ₹140 of food, ₹20 of packaging and a ₹40 rider trip, each refusal costs about ₹200, so about ₹5,400 a month in cooked food and wasted trips, before the twenty minutes a night someone spends counting cash. A gateway fee on the same 900 orders, had they been prepaid at 2.36 percent all in, would have been about ₹8,500, with no refusals, no counting and no cash on the road. The two are closer than they look, and the prepaid route scales better.

What online payment really costs

The gateway fee, visible and small, somewhere around 2 percent plus GST on cards and wallets and often less on UPI. Payment failures, which lose the order entirely if there is no fallback. Settlement lag of one or two working days, so a weekend's sales land on Tuesday. And refunds on cancelled prepaid orders, which go back through the gateway and take several working days to reach the customer, during which they message you twice.

The rules that keep COD's conversion without its cancellations

• A COD ceiling. Cash allowed below a threshold, ₹600 or ₹800 for most menus, online payment required above it. Say so on the store page and in the bot.
• Confirm COD orders before cooking. One line on WhatsApp: "please reply YES to confirm your order of ₹420, cash on delivery". It filters pranks and catches wrong addresses.
• Prepaid only for scheduled and custom orders. No exceptions, however regular the customer.
• UPI at the door, always offered. Many cash customers will scan the rider's QR when asked, which removes the counting while keeping the pay-on-arrival trust.
• Track refusals by number and by area. Two refusals from one number means that number is online-only from now on. A cluster in one locality means a lower ceiling there.
• Nudge the second order online. After a successful first cash order, the next confirmation can say "pay online next time and skip the change hunt". A nudge, with cash still available.

The full comparison, including when cash is the right default, is in cash on delivery versus online payment for food orders.

Advance payments for pre-orders, cakes and catering

A scheduled order is a commitment from the kitchen to make something specific at a specific time. A customer who has paid nothing can forget or change plans and leave you with the food. The practical rule: full payment at checkout for pre-orders under about ₹1,000, and a 50 percent advance above it with the balance before dispatch. For catering, the quote states the advance, the balance date and the cancellation cut-off, and the order is confirmed when the advance arrives rather than when the customer says "please proceed". The thresholds and the wording are in the advance payment guide.

The policy, in the words you put on the store page

Payment options. Pay by UPI or card at checkout, or choose cash on delivery for orders up to ₹800. Orders above ₹800, scheduled orders and custom orders are prepaid. Cash orders are confirmed by a reply on WhatsApp before we start cooking. Riders accept UPI at the door.

Spotting and stopping fake payment screenshots

A fake payment screenshot is an image edited or generated to look like a successful UPI transfer to your account, sent by someone who has paid nothing, in the hope that a busy counter or a rider with four more drops will hand over the food. They are easy to make and impossible to spot reliably on a phone screen during a rush. The only defence that works is a rule, not an eye.

The five versions you will meet

• The edited screenshot. A real success screen from any UPI app with the amount, payee or date changed. Apps exist that generate these from scratch.
• The real transaction, wrong amount. ₹1 paid to your QR, a genuine reference number, and the amount edited to ₹1,000. The reference is real, which defeats a casual check.
• The pending screen. "Processing", with the story that the bank is slow and it will reflect in a few hours. A genuinely pending UPI payment completes within minutes or fails and reverses; there is no version where it quietly arrives tomorrow.
• The wrong payee. A real payment to a similar-looking name or the customer's own second account, shown quickly.
• The refund trick. A real payment, food collected, then a dispute with the bank. Rare on UPI, more common on cards.

Four checks that cannot be faked

The UTR check settles almost every argument. A real payment to you has a reference that appears in your own history with your name as payee and the amount as credited. If the reference is not there, the money did not reach you, whatever the screen says. If it is there for ₹1 and the screenshot says ₹1,000, you know which to believe.

Rules for staff and riders: write these next to the QR

• The order is confirmed by our phone, never by the customer's. No exceptions for regulars, small amounts or a rush.
• Say it the same way every time: "Our system hasn't shown it yet, give me one moment to check." It buys thirty seconds without accusing anyone.
• Ask for the reference number, not the screenshot. If they cannot find one, the payment did not happen.
• Riders call the counter. The counter checks the app and says yes or no. If no, the rider offers cash or UPI to the rider's QR while the counter watches for the credit.
• Keep the food if there is no credit, politely, with the offer to deliver again once the payment shows.
• Log every incident: number, time, claim. A number that tries twice is prepaid-only for good.

Tone matters, because most "pending" screenshots are honest customers with a real bank delay, and treating them as suspects costs you a regular. The signs that should make staff slow down, and what to do if a loss has already happened, are in the fake payment screenshots guide.

The structural fix

Everything above is damage control for payments made to a static QR. The fix is to stop asking customers to pay to a QR and send proof, and instead route online orders through a checkout or a payment link where the gateway confirms the payment directly to your system. With a gateway in the path, the kitchen only ever sees orders that are paid or cash on delivery, and there is no screenshot anywhere in the process. On Tezzu, a customer ordering on the store page or through the WhatsApp bot pays by UPI or card through Razorpay at checkout, the order shows as paid in the live dashboard and on the staff app, and cash on delivery stays available for the rest, with the payment mode printed on the KOT so the kitchen and the rider both know which it is.

Gateway fees compared by model

Three terms get mixed up, and the mix-up costs money. MDR, the merchant discount rate, is what banks and card networks charge for processing a card payment; the government has kept it at zero on UPI and RuPay debit cards since 2020. The gateway fee is what the gateway charges for its service: checkout, confirmation, dashboard, refunds and settlement. It includes whatever MDR applies underneath, which is why a gateway can charge on UPI even though the UPI rail is free. GST at 18 percent applies to the gateway fee, not to the order, so a headline 2 percent costs 2.36 percent all in. Most standalone restaurants are on the 5 percent GST rate without input tax credit, so that 0.36 percent is a real cost rather than a pass-through.

The four pricing models you will meet

All gateway rates here are the standard, self-serve plans as listed on providers' websites at the time of writing; check the pricing page before deciding, because method-wise pricing changes without notice, and every gateway negotiates lower rates at higher volumes.

A ₹500 order under each model

Illustrative, with a ₹500 prepaid order and GST on fees included.

• Bank QR, zero fee: you receive ₹500, in T+1 or T+2, with no automatic confirmation against the order.
• Gateway UPI at a hypothetical 1 percent plus GST: ₹5.90 fee, you receive ₹494.10, confirmed against the order.
• Gateway card at 2 percent plus GST: ₹11.80 fee, you receive ₹488.20.
• Direct ordering platform at ₹10 per order plus the card gateway fee: ₹21.80 total, you receive ₹478.20, with the order bot, store page and dashboard included in the monthly plan.
• Delivery app at 25 percent commission plus GST on the commission: ₹147.50, you receive ₹352.50, and the customer's number stays with the app.

Over a month of 1,500 online orders at a ₹500 average, the card gateway costs about ₹17,700, the platform fee adds ₹15,000, and the delivery app commission is about ₹2.2 lakh. The gateway fee is a rounding error next to commission, which is why the number to watch is what sits between you and the customer, not the processing rate. The three middle models are set side by side in platform fee versus commission versus per-order fee, and the gateway comparison with the questions to ask each provider is in payment gateway charges in India.

The charges behind the headline rate

• Instant settlement. Gateways settle in T+1 to T+3 working days by default and charge an extra percentage for same-day money. Used daily, it can double your effective gateway cost. Use it on the day before a big purchase, not every day.
• Refund fee retention. Some gateways keep the original transaction fee when you refund. With a few cancellations a day, this adds up; check the terms.
• 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 equivalent mechanism, which is one more reason UPI-heavy restaurants pay less.
• International cards. Higher percentage, currency margin, more disputes. Switch them off unless you ship abroad.
• Add-ons. Payment pages, subscriptions, payouts and sound boxes may carry their own charges or rentals.

Settlement cycles and the daily close

Gateway money lands on a T+1 or T+2 cycle, so a kitchen that buys vegetables with cash every morning feels the gap. The settlement cycles guide works through when T+1 is worth a slightly higher rate and when instant settlement is worth paying for. Whatever the cycle, close the day in fifteen minutes every night: orders in the dashboard against payments received, cash in hand against cash orders, refunds issued against refunds owed, and the gateway's settlement report against yesterday's paid orders. A missing settlement found in a day is a support ticket; found in a month, it is an argument with your accountant. GST bills on every order, whatever the payment method, so the month-end does not need rebuilding.

Refund and cancellation policy

A refund policy answers four questions before anyone is upset: when a customer can cancel, how much comes back, how it comes back, and how long it takes. Most small restaurants have one in their head and none on paper, so every refund becomes a negotiation at 9pm. The principle behind every fair rule is that the refund tracks what you have already committed: before cooking nothing is lost and the refund is full; after cooking the ingredients and labour are gone; when the fault is yours the refund is full regardless of stage.

Fair defaults by situation

Credit instead of cash is the most useful tool in the table. A ₹150 coupon on the next order costs you the food on that order, keeps the customer, and is accepted far more gracefully than "no refund". Tie the coupon to the customer's phone number so it is not passed around.

The policy to paste onto the store page

Cancellations and refunds. You can cancel free of charge until we accept your order, usually within two minutes. Once the kitchen has started, the order cannot be cancelled; we may offer credit on a future order. Pre-orders and custom orders can be cancelled for a full refund of the advance until 48 hours before the delivery or pickup time; after that the advance covers ingredients already bought. If we cancel your order, you receive a full refund the same day. If an item is wrong, missing or not up to standard, message us within an hour of delivery with a photo and we will redeliver, refund or credit it, whichever you prefer. Refunds to UPI or card go back to the original method and take 3 to 7 working days depending on your bank; refunds on cash orders are sent to your UPI ID within one working day. If your payment was debited but the order shows unpaid, the bank reverses it within a few working days; please do not pay again.

The two lines for the confirmation message

Cancel free until we accept (about 2 minutes). After that the order is cooked for you and cannot be cancelled. Problems with your order? Message us within an hour of delivery. Full policy at [store link].

Refund messages that end the conversation

Each one states the decision, the amount, the method and the timeline, without "unfortunately".

Your order #[number] is cancelled. ₹[amount] will go back to your [UPI/card] within 3 to 7 working days.

The kitchen had already made your order when the cancellation came in, so we cannot refund it this time. We have added a ₹[amount] credit to your number for your next order; it applies automatically at checkout.

Refund of ₹[amount] for order #[number] has been issued (reference [ref]). Your bank should show it within 3 to 7 working days; message us if it has not arrived by [date].

What to automate once the rules are set

• The cancellation window tied to order status: before "accepted", a CANCEL reply cancels and refunds; after "preparing", it gets the credit message.
• Gateway refunds issued from the order in two clicks, back to the original method, with a reference you paste into the message.
• Credit as an auto-applied coupon tied to the phone number, so there is no spreadsheet.
• Status messages, because a large share of refund requests are "where is my order" in disguise.
• A refund log by reason, reviewed monthly: missing items point at packing, late deliveries at riders, quality at one dish.

Templates for every situation, including the complaint that arrives before any of these, are in the refund policy for food orders guide. On Tezzu, order statuses drive the customer's WhatsApp updates, coupons can auto-apply at checkout so credit needs no code, online refunds go back through the Razorpay payment from the order, and a rating request after delivery surfaces problems before they become refund demands.

Own gateway account versus the platform's gateway

Any ordering platform that takes online payments has to run them through a gateway account, and there are two ways to do it. The platform holds the gateway account, collects the payment, deducts its charges and settles the balance to you. Or you hold the gateway account, connect it to the platform, and the payment lands in your account in full while the platform bills its charges separately. The difference is not usually the fee; it is who holds the money, whose statement it appears on, and whose domain the checkout runs on.

What changes in the money flow

Who should connect their own account

• You already have a gateway account for a website, payment links or a counter, and want one settlement, one statement and one reconciliation.
• You do a few hundred online orders a month or more, so payments settling in full and the platform charge arriving as one invoice line is simpler for your accountant than per-transaction deductions.
• You have a negotiated gateway rate from your volume and want to keep using it.
• You run a custom domain and want checkout to stay on it.
• You want settlements, disputes and tax reports in your own name.

Who should not bother: a new kitchen with no gateway account yet, or a business doing a handful of online orders a week. The platform's setup is one form and no keys to manage, and the per-order charge is the same either way. The questions to ask any ordering platform before trusting it with your money, such as whether refunds are issued from the order and what happens to old orders if you disconnect, are in using your own Razorpay account on an ordering platform.

How it works on Tezzu

By default Tezzu sets up a payment account for your business through Razorpay as part of onboarding; customers pay at checkout, the ₹10 per-order charge is taken from the payment, and the balance settles to your bank. The steps are in Razorpay setup in Tezzu. The second way is to connect your own Razorpay account: you generate API keys in your Razorpay dashboard, paste them into Tezzu, and from then on checkout runs on your account with nothing deducted from the customer's payment. The ₹10 per order still applies on every plan; it is billed with your plan instead of being taken from each transaction, so your Razorpay statement equals your sales. The bring your own Razorpay guide covers the mechanics. US merchants run the same flow on Stripe, with plans in dollars and $0.50 per order.

Go-live checklist for your own account

• Connect with test keys first and place test orders from your own phone, including a refund, before any live key touches the store.
• Complete gateway KYC; live keys require it.
• Register your store's domain (your custom domain, or the platform's if you have none) on the gateway account, or checkout will fail silently.
• Confirm the webhook the platform created is active, so payment confirmations reach the order.
• Switch to live keys, make one real ₹1 payment, and confirm it appears in both dashboards.
• Decide the settlement schedule in the gateway dashboard before the first weekend.

Your 90-day plan

Frequently asked questions

Is UPI free for restaurants?

Collecting UPI through a bank or business-app QR carries no merchant discount rate, because the government has kept MDR on UPI at zero since 2020. A payment gateway may still charge a fee when UPI runs through its checkout or payment links, because you are paying for confirmation, refunds and reporting rather than the rail. Check the gateway's pricing page; some price UPI lower than cards or waive it for small merchants.

How do I confirm a UPI payment automatically for food orders?

Use a method that ties the payment to a reference your system knows: a dynamic QR per bill, a gateway payment link, or a gateway checkout inside your ordering page or WhatsApp bot. The gateway notifies your system the moment the money lands and the order is marked paid. A static QR cannot do this; at best a sound box announces the amount so staff do not have to read a customer's screen.

Should a restaurant stop offering cash on delivery?

Usually no. Cash still wins on first orders, small tickets and areas where paying a stranger first feels risky. The better answer is cash with rules: a ceiling of ₹600 to ₹800, a confirmation reply before cooking, prepaid only for scheduled and custom orders, UPI offered at every door, and an online-only flag for any number that has refused an order before.

How long should a food order refund take?

A refund issued through a payment gateway to UPI or a card usually appears in the customer's account within 3 to 7 working days, depending on their bank; the gateway processes it immediately and the bank controls the rest. Refunds on cash orders are sent to the customer's UPI ID and can be done the same day. Tell the customer the amount, the method, the timeline and the reference when you issue it.

Does using my own Razorpay account remove the platform's per-order charge?

On Tezzu, no. The ₹10 per order applies on every plan. What changes with your own account is that nothing is deducted from the customer's payment, so your Razorpay settlement equals your sales, and the per-order charges arrive as one line on your plan invoice. The gain is clean statements in your own name, your own negotiated gateway rate, and checkout on your own domain.