Many Indian businesses pick a payment gateway because a friend uses it or because a sales call quoted a low headline rate. The problems show up later: settlements that arrive later than expected, a business category that needs extra approval, a missing feature such as split payments, or a support desk that takes days to answer a refund query.
This guide gives you a practical way to compare gateways before you sign. It covers how settlement timing affects cash flow, what to prepare for onboarding and KYC, how to compare pricing without being misled, the technical checks your developer should run, and when two gateways make sense.
Quick answer: Choose a payment gateway by matching it to how your customers pay and how you need to be paid. Compare supported methods (UPI, cards, net banking, wallets, EMI, international cards), settlement timing, onboarding rules for your business category, the full pricing structure including GST on fees, and the quality of its APIs, webhooks and reports. Check the provider's RBI authorisation status too.
Start with how your customers pay
A gateway that suits a D2C brand may be wrong for a school, a SaaS company or an exporter. Before you compare providers, write down your own payment profile:
- One-time or recurring: If you bill monthly, you need card mandates or UPI AutoPay, plan changes and retry logic, not just a checkout button.
- Ticket size: High-value purchases benefit from card EMI, cardless EMI or pay-later options, which are enabled per account.
- Domestic or international: Accepting foreign cards or currencies needs separate approval and often a different pricing plan. Some businesses use a second gateway only for this.
- Marketplace or single seller: If you collect on behalf of vendors, you need split settlement or a payouts product, and the gateway will review that model closely.
- Channels: Website, Android and iOS apps, payment links on invoices or a QR code at a counter. Check that SDKs or plugins exist for each channel you use.
This list becomes your requirement sheet. Share it with every provider so they quote against the same scope. It is also the first document we ask for when scoping a payment gateway integration.
Settlement cycles and what they do to your cash flow
A payment is captured the moment the customer pays, but the money reaches your bank account only when the gateway settles it. Settlement is usually described as T plus a number of working days, where T is the day of capture. The exact cycle depends on the provider, your business category and your account history, and bank holidays push it further.
Clarify these points in writing before you go live:
- Standard cycle: How many working days after capture, and whether weekends and bank holidays count.
- Faster settlement: Some providers offer quicker settlement as an optional, separately priced feature. Ask what it costs and whether your category qualifies.
- Holds and reserves: For higher-risk categories or new accounts, a provider may hold back part of your settlements as a reserve. Ask whether this applies and when it is released.
- Deductions: Refunds and chargebacks are usually adjusted against upcoming settlements, so a heavy refund day reduces the next credit.
- Reports: You need a settlement report that lists every payment, fee and deduction inside each bank credit, ideally available through an API.
If you pay suppliers or salaries on fixed dates, plan your cash flow on the slowest likely settlement, not the fastest.
Onboarding and KYC: what to prepare
Every gateway runs KYC on the business and its owners before activating live payments. Requirements vary by provider and entity type, but applications move faster when these are ready:
| What to prepare | Why the gateway asks for it |
|---|---|
| PAN of the business and of the proprietor, partners or directors | Identity and tax verification of the entity and the people behind it |
| Registration proof, such as a certificate of incorporation, partnership deed, LLP agreement or Udyam or shop registration | Confirms the legal entity that will receive settlements |
| GST certificate, if registered | Matches the business name and address, and is used on the tax invoices the gateway issues for its fees |
| Proof of a bank account in the business name, such as a cancelled cheque | Settlements go only to a verified account that matches the business |
| A live website or app showing products, prices, contact details, terms, privacy policy and refund and cancellation policy | Gateways review what you sell and whether customers can see how refunds work |
| A short description of your business model and expected volumes | Helps the provider assess risk and decide which methods to enable |
Some categories, such as certain financial services, gaming or high-risk goods, are restricted or need extra approval. Ask early whether your category is covered, rather than discovering it after the integration is built.
Non-bank payment aggregators in India need authorisation from the Reserve Bank of India. You can check RBI's published information on authorised payment system operators at rbi.org.in before you commit.
How to compare pricing without being misled
The headline rate is the least useful number in a gateway proposal. Ask for the full rate card for your account and compare the structure:
- Rates by method: UPI, debit cards, credit cards, net banking, wallets and EMI are often priced differently. Corporate, premium and international cards may carry higher rates.
- Fixed fees: Setup, annual maintenance or minimum monthly charges, if any.
- GST on fees: Gateway fees attract GST, shown on the provider's tax invoice. Your accountant can tell you whether you can claim input tax credit.
- Refunds: Whether the fee on the original transaction is returned when you refund, and whether refunds carry a charge of their own.
- Disputes: Chargeback handling fees and the evidence you must provide.
Then work out your effective cost. Take each method's share of your expected volume, multiply it by the quoted rate for that method, and add fixed charges and GST. Two providers with the same headline rate can produce very different effective costs depending on your method mix. At higher volumes, rates are often negotiable, so ask.
Technical checks your developer should run
A gateway with weak APIs costs you in lost orders and manual reconciliation. Ask your developer, or the team building your integration, to confirm:
- Server-side order creation, so the amount is fixed on your server and cannot be changed in the browser.
- Signed webhooks for payment, refund and dispute events, so your system learns the result even if the customer closes the tab.
- A status API to re-check any payment that stays pending.
- A sandbox with test cards, simulated UPI payments and webhook testing.
- SDKs or plugins for your stack, such as PHP or Laravel, Node.js, WooCommerce, Android, iOS, Flutter or React Native.
- Refund, settlement report and recurring payment APIs, not just a checkout widget.
- Dashboard roles, so support staff can see payments without being able to issue refunds.
For card security, use hosted or embedded checkout so card details are entered on the gateway's page and never touch your server. Under RBI's card-on-file tokenisation rules, merchants cannot store customers' full card numbers anyway; saved cards work through tokens. This keeps your PCI DSS scope small, though you still have responsibilities, which our guide to PCI DSS compliance explains.
One gateway or two?
A second gateway gives you a fallback during an outage, lets you route a payment method to the provider that handles it better for your customers, and can cover international cards. It also doubles KYC, reconciliation and the code you maintain. For most small businesses, one well-integrated gateway is enough. Consider two when payments are critical to every order, when volumes justify separate negotiations, or when one provider cannot support a method you need.
If you run two, build a single payment layer in your application so orders, refunds and reports work the same way whichever gateway took the payment. Our pages on Razorpay integration and Cashfree integration describe what a complete integration with each involves.
How EthicsComputer can help
Our payment gateway integration team helps you shortlist providers against your requirement sheet, then builds the integration on your own merchant account with server-side verification, signed webhooks, refunds and reconciliation. A standard gateway integration typically takes one to three weeks. Gateway fees and settlement terms stay between you and the provider. If your finance team also needs settlements matched to orders and bank credits every day, see our payment reconciliation software service.
Not sure which gateway fits your business model?
Send us your payment profile, channels and expected volumes, and we will tell you what to ask each provider and how the integration would work.
About the author
Vinay Grover founded EthicsComputer in Rohtak, Haryana in 2018 and leads its cybersecurity, software and AI work for clients across India and abroad. EthicsComputer is ISO 9001, ISO/IEC 27001 and ISO 20000-1 certified.
