Not using a payment gateway is potentially a loss for business owners. Most customers today want to make cashless payments, especially youngsters. When they find a shop that does not want to receive money digitally or a small online business that prefers only COD, they probably won't want to go to that business twice. You might think that your product or service quality will give you an advantage. However, in a highly competitive market, even that becomes a question. So, no matter how small or reputable your business is, you must utilize payment gateways for better customer satisfaction and retention. Now, do all payment gateways provide you with the same functionalities and convenience?
Are these payment gateway charges the same? What kind of payment gateways should you be interested in? Well, the requirements can vary from business to business, but choosing a low-cost payment gateway is essential for every business. They help reduce the cost of transactions so that companies can save money and increase their profit margins. A low-cost payment gateway charges competitive rates. However, you do not have to think that being a less expensive option means it lacks features. These gateways come with ample features that help streamline payment processes, ensure security, and ease and support different payment methods. Let's find out some of the best low-cost payment gateway charges in India.
Payment Gateway Charges: Understanding the Costs Involved
To choose a payment gateway, you need to understand the associated charges. Payment gateway charges can significantly impact cost structure and profitability, especially for businesses that process a high volume of transactions. These charges can vary depending on the payment gateway provider, the volume of transactions, and the specific features or services included.
- The most common payment gateway charges are transaction fees, which are typically a percentage of the sale amount or a fixed amount per transaction. These fees are charged every time a customer makes a payment. If looked into carefully and meticulously, businesses with higher transaction volumes may find providers that offer reduced fees for bulk processing, which could be vital for their long-term cost savings.
- Setup fees are one-time costs associated with integrating the payment gateway into your business system. Some gateways may offer free integration. Some may charge a setup fee depending on the complexity of the integration process. In addition, monthly fees may apply, covering ongoing access to the gateway’s services, even if no transactions are processed.
- Chargeback fees are incurred when a customer disputes a transaction. This is kind of a reversal of payment.
- Termination fees may apply if a business cancels its contract with the payment gateway provider before the agreed-upon term ends.
Read More: How to manage your subscriptions with EnKash
Top Low-Cost Payment Gateway Charges in India
There are several important factors to keep in mind, as each factor plays a different role in determining the cost-effectiveness and efficiency of the payment process. The most important among these are transaction fees and other PG charges. Businesses should always look for gateways with low transaction fees. The higher the fee is, the more you have to pay for your revenue, and this may result in reduced profits. The best way to make a decision is to compare different providers and find the best rates. India offers several low-cost payment gateways. Besides the common ones, each has its own unique features and benefits. Here's a closer look at the top choices for businesses looking to reduce their payment processing costs by paying lower payment gateway charges.
PayKun
PayKun stands out as one of the most cost-effective payment gateways in India. But why? Besides having popular payment methods such as UPI (Google Pay, PhonePe), debit/credit cards (VISA, MasterCard, American Express), wallets (Paytm, Freecharge), and net banking, it offers very low payment gateway charges.
For UPI, debit cards, net banking, and wallets, the transaction fee is as low as 1.75%. For credit cards and Paytm Wallet transactions, it is 2.00%. Also, this UPI payment gateway charges zero setup fees and no annual maintenance fees. This makes it a very attractive option for small businesses with fewer funds or businesses with tight budgets.
Fast payouts and zero maintenance charges together mean you can save on both direct and indirect costs. Moreover, just like any popular payment gateway, PayKun offers fast payouts, which help businesses manage cash flow effectively. And about security, it is PCI DSS compliant. This ensures all your customer data is protected.
Also read: Payment Gateway vs Payment Processor: How They Work Together for Your Business
Razorpay
Razorpay is a name known by almost every person who uses online transactions to purchase, subscribe, donate, and so on. It is one of India's most popular payment gateways, best regarded for its ease of use and developer-friendly features. It is an ideal choice for businesses as its transaction fee is comparatively lower than many other payment gateway charges. It is just 2% for standard transactions like debit cards, credit cards, UPI, and wallets.
For premium cards like Diners, American Express, corporate credit cards, and EMI transactions, it is 3%. This might be a bit higher for certain card types, but it remains competitive overall. Razorpay does not charge any setup or maintenance fees. Also, there are no hidden costs charged by this gateway. It facilitates fast settlements for businesses and supports daily, weekly, and monthly payouts, depending on the business's needs.
Moreover, Razorpay is PCI DSS Level 1 compliant. This feature assures both payment makers and receivers that their payments are safe and they do not need to worry about data breaches. It uses advanced encryption and fraud detection tools to protect sensitive payment information. As mentioned before, Razorpay has developer-friendly features. It offers various APIs, plugins, and SDKs for seamless integration.
The platform also has a dedicated help center and troubleshooting guides to assist developers. Its Flash Checkout feature allows businesses to simplify the checkout process for customers. Additionally, Razorpay has one more distinctive plus point. It offers RazorpayX, which is a business banking solution that helps businesses manage their finances more effectively.
Cashfree
Cashfree is a growing payment gateway in India. It has built a reputation for its speed and reliability. There are several reasons why Cashfree is one of the best low-cost payment gateways. It offers competitive transaction rates that change depending on the method of payment used. The platform fee is set at 1.95%. The transaction fee for UPI payments on credit cards stands at 2.15% per transaction.
For credit card EMI, this payment gateway charges a Transaction Discount Rate (TDR) + 0.25% per transaction, and debit card EMI transactions are charged 1.50% per transaction. The cardless EMI service charges a 1.90% transaction fee. Pay later options require a 2.20% transaction fee. Businesses do not have to face any initial fees with Cashfree as it offers no setup cost and no maintenance charges.
The platform stands out in payouts and settlements by providing quick settlement processing times, which are usually completed in 24-48 hours. Quick fund access is essential for businesses to keep their operations running smoothly and reinvest in growth. For security and compliance, Cashfree is PCI DSS compliant. It also utilizes strong encryption protocols and fraud prevention systems to safeguard any sensitive data received from a customer. It is a platform where your customers will find a wide range of BNPL options available. Its auto-retry feature provides it with the confidence to claim 15% higher payment success rates. For customer support, Cashfree provides 24/7 assistance.
Read More: Auto Payment Collection Platform
PayU
PayU is a well-established name in India’s payment gateway industry. It offers a wide range of payment options for buyers like credit cards, debit cards, UPI, BNPL, etc. When it comes to transaction fees, this payment gateway charges 2% for domestic transactions, including Visa, Mastercard, net banking, BNPL, and wallets. This rate is quite low yet competitive. The fee goes up to 3% for international transactions or for cards such as Diners and American Express.
Like any other most-used and trusted payment gateway, PayU charges zero setup and no maintenance fees. For businesses that would want to avoid initial investments or ongoing costs, it is definitely a cost-effective solution for them. In addition, it offers quick settlements with flexible payout options. Depending on your business needs, PayU supports daily, weekly, and monthly payouts. It offers several other advantages, too, including 100% online onboarding. Its one-click payment experience enhances convenience for customers as they face no hassle while making their payments.
PayU also guarantees a 5-minute refund. Moreover, PayU provides ready-to-use API documentation and designs. This allows developers to integrate the payment gateway quickly and easily. It is PCI DSS compliant and uses an advanced fraud detection system. These safety features provide customers with confidence regarding their data safety.
EnKash
Power your website and mobile app with the EnKash payment gateway built for seamless integration and rapid onboarding. Accept payments effortlessly with 100+ modes and customizable checkout options. Our developer-friendly SDKs and APIs ensure higher conversions, superior success rates, and a frictionless payment experience.
EnKash serves as an all-in-one spend management solution that modernizes payment processes while automating accounts payable and enabling electronic receivables. The Reserve Bank of India (RBI) granted permission to EnKash to operate as a payment aggregator in December 2023. EnKash offers competitive transaction fees starting at 1.99%. Businesses can utilize this to save on costs. Additionally, volume discounts are available. So, businesses can enjoy lower payment gateway charges as their transaction volumes increase.
The sign of a cost-effective payment gateway is its fee demands. EnKash provides transparent pricing with no setup fees and no annual maintenance charges. This significantly reduces initial and ongoing costs for businesses. Moreover, the platform has a quick settlement process so that businesses have timely access to funds.
EnKash meets RBI requirements as an approved payment aggregator by following strict regulatory norms to deliver secure payment processing, which gives businesses peace of mind. It provides support for various payment methods like credit cards and debit cards, as well as net banking and digital wallets with UPI options. The ability to support multiple payment methods enables businesses to provide many payment options to their customers. This way, the customers feel more comfortable while making payments as they find the exact method they want to use and do not have to settle for something less.
EnKash payment gateway delivers flawless integration capabilities with multiple accounting and ERP platforms. It helps enhance business operational efficiency. Through its bulk payment feature, businesses can process hundreds of transactions quickly by using just a few mouse clicks. Additionally, EnKash provides specialized customer support to help businesses manage payment-related questions or problems, which guarantees an uninterrupted payment experience.
Also Read: Best Payment Gateways in India.
Conclusion
If you own a business, no matter how small or big, you must consider a payment gateway. However, do not settle for just any payment gateway you come across. Opt for a low-cost gateway so that you do not have to face a reduced profit margin because of higher payment gateway charges. The gateway you choose will directly affect transaction costs, cash flow, and the overall customer experience. So, select a payment solution that aligns with your business size, goals, specific needs, and, of course, customer preferences. The gateway should integrate seamlessly with your existing systems and be easy to implement, saving you valuable time and effort. Protecting sensitive customer information from fraud requires robust security features, so make sure the gateway meets all required regulatory standards. Assess the range of payment methods that the platform supports. Multiple payment options lead to better customer experiences, which result in higher conversion rates. So, what is the best payment gateway? It must be the one that balances low costs with high functionality. You can select a payment gateway that helps your business thrive, reduces costs, and supports long-term success in terms of customer satisfaction and retention.
FAQs
What is the difference between transaction fees and setup fees in a payment gateway?
Transaction fees are the payment gateway charges incurred for each transaction processed through the gateway, typically a percentage of the transaction amount. Setup fees are one-time costs for setting up the payment gateway on your website or platform. Some gateways charge both, while others offer zero setup fees.
How do payment gateways help in fraud prevention?
Most payment gateways employ encryption and fraud detection systems to secure transactions. They are PCI DSS compliant, ensuring that customer data is protected. Some platforms use machine learning algorithms to monitor transactions for suspicious activities in real time.
Are there any hidden fees with low-cost payment gateways?
While many low-cost gateways advertise low transaction fees, some might have hidden payment gateway charges, such as high chargeback fees, foreign exchange fees, or fees for specific payment methods. Always review the full pricing structure before committing.
Can a payment gateway be integrated with multiple sales channels?
Yes, most modern payment gateways offer integration with multiple sales channels, such as e-commerce platforms, mobile apps, and physical POS systems. This allows businesses to accept payments seamlessly across various platforms.
What happens if my business processes high volumes of transactions?
For high-volume businesses, some payment gateways offer volume-based pricing, where the payment gateway charges decrease as the number of transactions increases. Additionally, gateways with higher transaction volumes may offer dedicated customer support and faster payouts.
How important is customer support when selecting a payment gateway?
Customer support is crucial, especially when payment issues arise. Look for a gateway that offers 24/7 support through multiple channels like phone, chat, and email. Good support can minimize downtime and ensure smooth operations.
What is an interchange-plus pricing model?
An interchange-plus payment gateway pricing model means businesses pay a fixed markup over the interchange fee, which is the fee charged by card networks like Visa and Mastercard. This model is considered transparent as it breaks down the cost of each transaction.
How do I ensure that my payment gateway is compliant with local regulations?
Most payment gateways ensure compliance with industry standards, such as PCI DSS for secure transactions. It’s important to check whether the gateway is compliant with regulations specific to your country, such as data protection laws, tax regulations, and currency exchange rules.
Can a payment gateway support international payments?
Many payment gateways support international transactions, but fees may vary depending on the currency, location, and payment method used. It's essential to check if the gateway supports the countries and currencies your business deals with.
How do payment gateways handle chargebacks and disputes?
Payment gateways often have processes in place to manage chargebacks and disputes. Some act as intermediaries between merchants and customers to resolve issues. However, merchants are usually responsible for proving the legitimacy of the transaction to avoid chargeback fees.
