How to choose a payment gateway: a 12-point checklist for Indian businesses
Pricing is only one line on the list. After years of selling payment gateways, these are the 12 questions I would ask before signing with any provider.
Key takeaways
- The headline rate is rarely what decides whether a payment gateway works for your business.
- Ask for the full rate card, refund and chargeback costs, and hidden charges such as GST on fees.
- Settlement speed and success rates by payment method can matter more than a small difference in fees.
- Only use an RBI-authorised payment aggregator, and consider a backup gateway if you are growing fast.
Most businesses choose a payment gateway the way they choose a mobile plan: whoever offers the lowest headline rate. Having sold payment solutions at BharatPe, SabPaisa and PhiCommerce, I can tell you the headline rate is rarely what decides whether a gateway works for you.
Here is the checklist I would use.
Cost
- What is the full rate card? Ask for UPI, debit cards, credit cards (domestic and international), net banking, wallets, EMI and Pay Later separately. Ask about setup fees, annual fees and minimum commitments.
- What do refunds and chargebacks cost? Some providers charge for refunds or keep the original fee.
- Are there hidden charges? GST on fees, settlement charges, instant settlement fees and currency conversion margins add up.
Money flow
- What is the settlement cycle? T+1, T+2 or instant. Faster settlement can matter more than a 0.2% rate difference for a business with tight working capital.
- How are failed and pending payments handled? Ask about auto-reversal timelines and how customers are informed.
Performance
- What are the success rates by payment method? Ask for UPI and card success rates for businesses like yours. A 3% difference in success rate can cost more than any fee.
- Is there smart routing or retry? Good gateways route a payment through a backup bank when one is down.
Compliance and safety
- Is the provider RBI-authorised as a payment aggregator? Non-negotiable.
- How do they handle KYC and documentation? A clear, fast onboarding process saves weeks.
Fit for your business
- Does it integrate with what you use? Your website platform, billing software, ERP or accounting tool. Ask for ready plug-ins.
- Do they support the features you need? Subscriptions and auto-debit (e-mandates), payment links, QR codes, payouts to vendors, split settlements for marketplaces.
- Who do you call when it breaks? A named account manager, a phone number and a response time in writing. In payments, support quality is everything.
The cheapest gateway is the one that collects the most money with the fewest problems, not the one with the lowest rate.
One more tip
Don’t put all your volume on one provider if you’re growing fast. Many larger merchants use two gateways: one primary and one backup. It costs a little more effort and saves you when an outage hits on your busiest day.
If you want help comparing gateways for your business, I’m happy to look at your requirements with you.
FAQ
Frequently asked questions
How do I choose a payment gateway in India?
Look beyond the lowest headline rate. Compare the full rate card, refund and chargeback costs, settlement cycle, success rates by payment method, RBI authorisation, the KYC and onboarding process, integrations, features and support. The cheapest gateway is the one that collects the most money with the fewest problems, not the one with the lowest rate.
What hidden charges should I ask a payment gateway about?
Ask about GST on fees, settlement charges, instant settlement fees and currency conversion margins, because these add up. Also ask whether there are setup fees, annual fees or minimum commitments, and what refunds and chargebacks cost. Some providers charge for refunds or keep the original fee, so get the full rate card for every payment method separately.
Should a business use more than one payment gateway?
If you are growing fast, it helps not to put all your volume on one provider. Many larger merchants use two gateways: one primary and one backup. It takes a little more effort, but it saves you when an outage hits on your busiest day. Good gateways also offer smart routing that sends a payment through a backup bank when one is down.