India’s digital payments ecosystem has witnessed unprecedented growth over the past decade. As businesses continue to digitize, payment gateways have become a cornerstone for seamless transactions. Whether you run an eCommerce store, offer services, or manage a brick-and-mortar establishment, choosing the right payment gateway can make or break your operations.
Below is a detailed overview of the top payment gateways in India, highlighting their features, benefits, pricing structures, and use cases.
Innovations and Trends in the Payments Industry in India
India’s payments industry has undergone a massive transformation over the past few years, driven by technological innovation and regulatory support. The shift from cash to digital payments has been fueled by both public and private initiatives, making India one of the largest digital payment markets in the world. Below are the key innovations and trends shaping the payments landscape in India.
1. Unified Payments Interface (UPI)
The introduction of the Unified Payments Interface (UPI) by the National Payments Corporation of India (NPCI) is perhaps the most significant innovation in the Indian payments landscape. UPI has revolutionized the way people transfer money by providing a simple, secure, and real-time payment system. Users can transfer funds across banks using just a mobile number or a virtual payment address (VPA). UPI’s convenience has led to its widespread adoption, with billions of transactions happening monthly.
UPI 2.0, an enhanced version, introduced features like overdraft account linking, one-time mandates, and QR code payments, further enhancing the user experience. UPI has also been key in promoting person-to-person (P2P) payments, and it is now becoming a preferred mode for merchant transactions through its person-to-merchant (P2M) functionalities.
2. Contactless Payments
The COVID-19 pandemic accelerated the adoption of contactless payment methods in India. Consumers now prefer touchless transactions to minimize physical contact, leading to increased usage of Near Field Communication (NFC) technology in payment cards and smartphones. Both credit and debit cards with contactless features have gained significant traction, with tap-and-pay mechanisms becoming standard for retail payments.
Furthermore, the adoption of QR code-based payments has surged, especially for small merchants and informal sector businesses. QR codes offer a cost-effective, scalable, and user-friendly way to enable digital payments for micro and small businesses.
3. Buy Now, Pay Later (BNPL)
The Buy Now, Pay Later (BNPL) model has seen rapid growth in India, particularly in the eCommerce sector. BNPL allows consumers to make purchases without upfront payment, instead spreading the cost over time. Platforms like ZestMoney, Simpl, and LazyPay have emerged as key players in this space, targeting young consumers who are looking for alternative credit options.
BNPL is becoming a preferred payment method for millennials and Gen Z, thanks to its ease of use, interest-free periods, and lack of complex credit checks. As it continues to grow, BNPL is likely to disrupt traditional credit cards and personal loans, providing more flexible financing options to consumers.
4. Cryptocurrency and Blockchain Technology
Though the regulatory environment for cryptocurrency remains uncertain in India, digital assets and blockchain technology are steadily gaining interest. Blockchain technology is being explored by fintech companies for its potential to increase transparency and security in transactions. The adoption of stablecoins and central bank digital currencies (CBDCs) is also being considered as alternatives to traditional payments.
In 2023, the Reserve Bank of India (RBI) initiated pilot programs for the Digital Rupee (e₹), which aims to reduce the cost of cross-border payments and provide a secure, regulated alternative to cryptocurrencies.
5. Artificial Intelligence and Machine Learning
The use of Artificial Intelligence (AI) and Machine Learning (ML) in the payments industry is on the rise. AI is being utilized to improve fraud detection, optimize payment processes, and offer personalized financial services. AI-powered chatbots and customer support systems are increasingly being employed to assist users with queries and streamline payment experiences.
ML algorithms help payment providers identify patterns in transactions, making it easier to detect anomalies and prevent fraud. AI is also being used to enhance the user experience by enabling personalized recommendations and creating smarter financial products.
6. Voice-Enabled Payments
As part of increasing accessibility and convenience, voice-enabled payments are making their way into the mainstream. With the rise of voice assistants like Amazon Alexa and Google Assistant, consumers are now able to make payments using voice commands. This innovation is particularly beneficial for older demographics and people who are not tech-savvy.
Banks and fintech companies are exploring ways to integrate voice commands into their payment apps, allowing users to pay bills, transfer money, or check balances with ease.
7. Cross-Border Payment Solutions
Cross-border payments have traditionally been a challenge due to high fees and lengthy processing times. However, new innovations in the space are simplifying the process. Solutions like RippleNet and Visa Direct are being used to make cross-border remittances quicker and more affordable. With India being the world’s top recipient of remittances, these innovations are having a profound impact.
Furthermore, UPI is now being linked to international markets, allowing Indian users to send and receive money across borders through UPI-compatible platforms. This is expected to simplify cross-border payments for both consumers and businesses, and further enhance India’s global payment footprint.
8. RegTech and Regulatory Support
India’s payment landscape has been strongly influenced by proactive regulatory measures. The introduction of RegTech (Regulatory Technology) is helping financial institutions comply with evolving regulations while ensuring seamless payments. RBI and NPCI have been at the forefront, issuing guidelines to make payments more secure, while encouraging innovation. The Payment Aggregators and Payment Gateways Guidelines issued in 2020 have provided a much-needed framework for companies to operate within a regulated environment, improving trust in digital payments.
9. Super Apps and Open Banking
The rise of super apps, such as Paytm and PhonePe, is creating ecosystems that allow users to access multiple financial services in one place. These apps integrate various services like payments, loans, insurance, and investments into a single platform, creating a one-stop solution for consumers.
Open Banking, another trend, is gaining momentum in India. It allows financial institutions to share consumer data with third-party providers (with consent), creating more innovative and tailored financial services. This is expected to improve financial inclusion by giving underserved segments access to credit, payments, and other financial services.
The Indian payments industry is in the midst of a revolution driven by innovations such as UPI, contactless payments, AI-driven fraud prevention, and cross-border solutions. As these technologies continue to evolve, they promise to make payments more secure, efficient, and accessible, helping India lead the global digital payments race.
- Razorpay
Razorpay has swiftly become one of India’s leading payment gateways, known for its user-friendly interface and comprehensive offerings.
Key Features:
- Supports multiple payment modes: Credit/debit cards, UPI, net banking, wallets.
- International payments: Supports 100+ currencies.
- Developer-friendly: Easy API integration for eCommerce platforms.
- Subscription and recurring payments: Ideal for businesses with subscription models.
- Fraud prevention: In-built tools for chargeback and risk mitigation.
Pricing:
- Standard domestic transactions: 2% per transaction.
- International transactions: 3% per transaction.
Best Suited For:
- Startups, small businesses, and enterprises requiring subscription models.
Razorpay’s flexibility and competitive pricing make it the go-to choice for businesses across industries in India.
- PayU
PayU is another big player in India’s digital payments space, known for its versatility and widespread usage.
Key Features:
- Variety of payment methods: Cards, UPI, wallets, and net banking.
- Customizable checkout pages: Tailor your checkout process for better customer experiences.
- Fraud prevention: Advanced algorithms for fraud detection.
- Split payments: Ideal for marketplaces where payments need to be divided among multiple sellers.
Pricing:
- Domestic transactions: 2% per transaction.
- International transactions: 3% per transaction.
Best Suited For:
- Medium to large enterprises, as well as marketplaces.
PayU stands out for its enterprise-focused solutions and is trusted by a range of businesses, including online education platforms, eCommerce giants, and marketplaces.
- CCAvenue
CCAvenue is one of India’s oldest payment gateways and has built a strong reputation over the years, thanks to its robust infrastructure and feature set.
Key Features:
- Supports 200+ payment options: Cards, UPI, net banking, and wallets.
- Multi-currency support: Accept payments in over 27 currencies.
- Advanced analytics: Detailed reporting and dashboard insights.
- Customizable checkout: Seamless user experience for merchants and customers alike.
Pricing:
- Domestic transactions: 2% per transaction.
- International transactions: 3.5% per transaction.
Best Suited For:
- Established businesses and enterprises with high transaction volumes.
CCAvenue remains a popular choice due to its extensive payment options and its ability to handle high transaction volumes for larger enterprises.
- Instamojo
Instamojo is especially popular with small businesses, freelancers, and solo entrepreneurs due to its simplicity and quick onboarding.
Key Features:
- Instant onboarding: Start receiving payments within minutes.
- No setup fees: Great for small businesses looking to avoid upfront costs.
- Payment links: Ideal for businesses without a website; payments can be collected via shareable links.
- eCommerce integration: Integration with WooCommerce, Shopify, and other platforms.
Pricing:
- Domestic transactions: 2% + ₹3 per transaction.
- No international payments: Instamojo is focused on domestic businesses.
Best Suited For:
- Small businesses, freelancers, and non-tech-savvy entrepreneurs.
Instamojo’s simplicity and ease of use have made it a go-to for many small-scale and individual sellers in India.
- Cashfree Payments
Cashfree Payments is known for its high-speed processing and efficient payout features, making it a favorite for businesses requiring quick settlements.
Key Features:
- Fast settlements: Get your funds settled within 24 hours.
- Bulk disbursement: Disburse payments to thousands of accounts with a single click.
- Payment methods: UPI, cards, wallets, net banking, and pay-later options.
- API integration: Developer-friendly API for custom integration.
Pricing:
- Domestic transactions: 1.75% per transaction.
- International transactions: 3% per transaction.
Best Suited For:
- Businesses with a need for quick disbursements, such as eCommerce platforms or logistics services.
Cashfree Payments has carved out a niche among businesses requiring high-speed transactions and efficient payout mechanisms.
- Paytm Payment Gateway
As part of the Paytm ecosystem, the Paytm Payment Gateway allows businesses to tap into Paytm’s vast user base for quick and seamless payments.
Key Features:
- Wide acceptance: Accept payments via Paytm wallet, UPI, cards, and net banking.
- One-click payments: Paytm users can pay instantly with saved payment details.
- Subscription billing: Ideal for businesses with recurring payments.
- User-friendly dashboard: Track payments and analytics effortlessly.
Pricing:
- Domestic transactions: 1.99% per transaction.
- International transactions: 3% per transaction.
Best Suited For:
- Businesses targeting mobile-savvy users and those already leveraging Paytm as a payment option.
Paytm’s seamless integration with its wallet makes it an attractive option for businesses looking to cater to India’s growing base of digital payment users.
7. PayKun
PayKun is a rising star in the Indian payment gateway space, known for its affordability and user-friendly features, catering particularly to small businesses and startups.
Key Features:
- No setup fees: Perfect for startups and small businesses looking to minimize costs.
- Multiple payment methods: Supports UPI, debit/credit cards, wallets, and net banking.
- Developer-friendly API: Easily integrate PayKun with your website or mobile app.
- Dedicated support: Offers 24/7 customer support to resolve queries and issues promptly.
Pricing:
- Domestic transactions: 1.75% per transaction.
- International transactions: 3% per transaction.
Best Suited For:
- Startups, NGOs, small businesses, and freelancers looking for an affordable, easy-to-use payment gateway.
PayKun stands out with its competitive pricing and wide payment options, making it an excellent choice for small-scale businesses seeking hassle-free digital payment solutions.
- Zaakpay
Zaakpay is a homegrown Indian payment gateway solution, known for its strong security and ease of integration, making it an excellent choice for both startups and established businesses.
Key Features:
- Wide payment options: Accepts payments via UPI, cards, net banking, and wallets.
- Fast integration: Developer-friendly API for quick and seamless integration with websites and apps.
- Secure transactions: PCI-DSS Level 1 certified to ensure the highest level of security.
- Real-time reporting: Detailed analytics and insights to track transactions and performance.
Pricing:
- Domestic transactions: 2% per transaction.
- International transactions: 3.5% per transaction.
Best Suited For:
- Small and medium-sized businesses, eCommerce platforms, and subscription services.
Zaakpay offers an ideal solution for businesses looking for a secure, reliable, and easy-to-implement payment gateway, with support for diverse payment methods.
- BillDesk
BillDesk has long been a staple in the Indian payment gateway market, offering secure and scalable solutions for businesses of all sizes.
Key Features:
- Wide payment options: Supports UPI, cards, wallets, and net banking.
- Robust scalability: Handles large transaction volumes for enterprises.
- Reliable settlements: Regular and timely settlements ensure smooth cash flow.
- Fraud management: Strong fraud detection tools to reduce risk.
Pricing:
- Domestic transactions: 2% per transaction.
- International transactions: 3% per transaction.
Best Suited For:
- Established businesses and enterprises handling a high volume of transactions.
BillDesk’s reliable infrastructure and extensive features make it a top choice for large businesses and enterprises in India.
10. HDFC SmartHub
HDFC SmartHub (formerly HDFC SmartGateway) is one of the most trusted and reliable payment gateways in India, offering a comprehensive suite of payment options with strong security, making it an excellent choice for businesses of all sizes.
Key Features:
- Multiple payment options: Accepts payments through UPI, credit/debit cards, net banking, wallets, and EMI options.
- Robust security: PCI-DSS compliant and 128-bit encryption ensures safe and secure transactions.
- EMI support: Enables EMI options for customers using credit cards.
- Quick settlements: Ensures timely settlement of funds for businesses.
- Integrated banking: Provides businesses with seamless integration with HDFC Bank’s banking services for streamlined cash flow management.
Pricing:
- Domestic transactions: 2% per transaction.
- International transactions: 3% per transaction.
Best Suited For:
- Established businesses, retail, eCommerce platforms, and those looking to leverage EMI options for higher-ticket transactions.
HDFC SmartHub is known for its secure, bank-integrated solution, making it a preferred choice for businesses looking for reliable, full-scale payment solutions.
Conclusion
Choosing the right payment gateway in India depends on several factors, including the nature of your business, transaction volumes, and the types of payments you wish to accept. With solutions like Razorpay and PayU for startups and small businesses, to enterprise-focused platforms like CCAvenue and BillDesk, there’s a perfect fit for every business need. As digital payments continue to grow in India, businesses must stay agile and choose gateways that offer security, scalability, and seamless user experiences.
By carefully assessing your business requirements and matching them with the payment gateway features listed here, you can ensure smoother transactions and ultimately a better customer experience.