Payment Gateway: Definition, Meaning & Guide for Indian Businesses

A payment gateway is the software that securely transmits a customer's card/UPI/netbanking details from the seller's checkout to the bank for authorisation. Common Indian gateways: Razorpay, PayU, Cashfree.

What is Payment Gateway?

A payment gateway is the middleman that lets your website or app accept money. It encrypts card data, sends it to the issuing bank for authorisation, and returns success/failure to your checkout. In India, the leading gateways are Razorpay, PayU, Cashfree, Instamojo and CCAvenue. Each charges 1.8-2.5% per transaction (cards) or has flat fees for UPI/netbanking. Settlement is typically T+1 to T+3 depending on plan. Choose a gateway based on: integration ease (Razorpay has the best DX), settlement speed (Cashfree offers same-day for higher tiers), success rate (varies by category — cards differ from UPI), and customer support quality.