Payment gateway charges India: Busting the free payment gateway myth

Having a payment gateway means that you can offer multiple payment options to customers on your checkout page and collect payments across platforms – web and mobile.

The payment gateway service provider partners with banks, card networks such as Visa, Master and other payment service providers to facilitate online payment collection. When you integrate a payment gateway, you enable all or some of those payment modes for your website/application.

Payment gateway options available on cashfree payment gateway charges page
Sample: Cashfree payment gateway checkout page showing multiple payment modes.

Payment Gateway charges : Free payment gateway – a myth

While the term ‘free payment gateway’ can ring a bell in a merchant’s head, we need to see through if there can ever be a free payment gateway. To evaluate if ‘ free payment gateway ‘ is a real thing we need to understand what are the charges that are incurred by a payment gateway service provider.

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.

Payment Gateway Charges : 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)

Payment Gateway Charges : Annual/Monthly Maintenance Fees

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)

Some payment gateway providers also offer a range of fraud, risk prevention, and management services, and you may be required to pay more to avail these.

● Payment Gateway Charges : Transaction discount rate ( TDR )

As the name suggests this fee is based on every transaction via the payment gateway your store  processes. The rate differs based on the payment mode used by the customer, for eg when a customer pays via net banking, the TDR will be low, while for international credit card payments the TDR will be higher.

With most payment gateways the cost decreases when your sales grow.

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

At Cashfree, we help businesses offer a wide range of domestic and international payment options to customers. We DO NOT promise ‘ Free Payment Gateway Services‘ because that is never the case, however, our team of payment experts is well armed to understand your business requirement and suggest the best combination of features for your business and come up with growth-friendly pricing.

Payment gateway charges page.

Pricing is tailored to suit your monthly payment volume, average transaction size, nature of business, growth potential and a few other factors.

Checkout Cashfree Payment Gateway features and explore how it suits your business need. Checkout Cashfree payment gateway charges here.


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