Choosing a payment gateway is one of the first real business decisions you make when setting up a D2C store in India. Get it wrong and you are either paying more MDR than you should, waiting days longer for your money, or dealing with a checkout experience that tanks your conversion rate.
This article cuts through the marketing to give you a straight comparison of the five most widely used gateways — Razorpay, Cashfree, PayU, Instamojo, and CCAvenue — so you can pick the right one for where your business is today.
A quick note on MDR: the Merchant Discount Rate is the fee the gateway charges on every transaction. On UPI, banks bear this cost (not you) up to ₹2,000 per transaction as per RBI rules, but anything above that or on cards and net banking comes out of your revenue. Small differences add up fast at scale.
What to Look for in a Payment Gateway
Before jumping into the comparison, here are the factors that actually matter for D2C sellers:
MDR rates — Even a 0.25% difference means ₹250 on every ₹1 lakh of sales. Multiply that across a month and it is significant.
Payment methods covered — Your customers expect UPI, all major debit and credit cards, net banking, wallets like Paytm, and increasingly BNPL (Buy Now Pay Later) options like LazyPay or Simpl. Missing one can cost you a sale.
Settlement speed — Most gateways settle in T+2 (two business days after the transaction). Faster settlement means better cash flow, especially if you are pre-purchasing inventory.
Refund handling — When a customer returns a product, how fast does the money go back? Some gateways auto-reverse refunds; others make you initiate and wait.
Integration complexity — If you are on Shopify, WooCommerce, or a custom site, how easy is the plugin or API setup? Some gateways have polished SDKs; others require more technical work.
KYC and activation time — As a D2C seller you are running on speed. A gateway that takes two weeks to verify your business documents is a problem when you want to launch next Monday.
Quick Comparison Table
| Gateway | UPI MDR | Card/Net Banking MDR | Settlement | Best For |
|---|---|---|---|---|
| Razorpay | 0% (up to ₹2,000) | 2% | T+2 | Growing D2C brands, developer-friendly setups |
| Cashfree | 0% (RBI rule) | ~1.75–2% | T+1 / Instant | Cash-flow-sensitive sellers, high refund volume |
| PayU | 0% (RBI rule) | ~2% | T+2 | EMI-heavy categories (electronics, furniture) |
| Instamojo | 0% (RBI rule) | 2% + ₹3/txn | T+3 | Solo sellers, first stores, zero-budget startups |
| CCAvenue | 0% (RBI rule) | ~2.5% | T+2–T+3 | Enterprise, multi-currency, complex setups |
MDR rates are approximate as of early 2026. Always confirm with the gateway before signing up.
Razorpay
Razorpay is the most commonly used payment gateway among Indian startups and D2C brands. If you have shopped at any mid-sized Indian online store, you have almost certainly checked out through Razorpay.
What it does well
The dashboard is genuinely good. You can see live transaction data, trigger refunds, manage payouts, and track disputes all from one place — without calling support. The checkout UI is clean and mobile-optimised, which matters because most Indian D2C buyers are on their phone.
Razorpay's plugin ecosystem is strong: Shopify, WooCommerce, Magento, Wix, and most popular platforms have official or well-maintained plugins. For custom builds, their API documentation is thorough.
Settlement is T+2 by default, but Razorpay also offers an Instant Settlement product (at an additional fee of around 1.5–2% of the settlement amount) if you need cash faster.
Honest drawbacks
Support response times can be slow when you have an account issue. Their documentation is good for standard integrations but if you hit an edge case, you may be waiting on a ticket. Pricing for add-ons like Smart Collect, Route, or the subscription module can add up if you use multiple products.
Fees summary
- UPI: 0% MDR (up to ₹2,000 per transaction; above ₹2,000 the standard card rate applies)
- Cards and net banking: 2% MDR
- International cards: ~3%
- Settlement: T+2 standard; Instant Settlement available at extra cost
- No setup fee; no monthly minimum on the basic plan
Verdict: The safe, well-rounded choice for most growing D2C brands. Not always the cheapest, but the ecosystem and reliability justify it.
Cashfree Payments
Cashfree is quietly becoming the gateway of choice for D2C brands that care about cash flow. They have built a strong reputation on fast settlements and competitive MDR, and their Instant Settlement product is genuinely useful.
What it does well
Their MDR rates are marginally lower than Razorpay on cards — approximately 1.75% on some categories — which adds up meaningfully at volume. More importantly, Cashfree's Instant Settlement product lets you receive funds in your account within minutes of a transaction rather than waiting two days. For sellers who run tight inventory cycles, this is a real operational advantage.
Refund speed is another plus. Cashfree processes refunds back to the customer faster than most competitors, which reduces support tickets from buyers asking where their money went.
Their subscription billing and auto-collect features are also well-built for brands running recurring revenue models (membership boxes, subscription skincare, etc.).
Honest drawbacks
Cashfree is less well-known to buyers, which is not a problem technically (buyers see your store, not the gateway name), but means fewer community tutorials if you run into integration issues. The dashboard, while functional, is not as polished as Razorpay's. Documentation is improving but still lags behind.
Fees summary
- UPI: 0% MDR (RBI rule)
- Cards and net banking: ~1.75–2% MDR (varies by category)
- Instant Settlement: available as an add-on product (check current pricing when you sign up)
- Settlement: T+1 standard; Instant Settlement available
- No setup fee
Verdict: The strongest option for cash-flow-conscious D2C brands and sellers with high return volumes. Worth comparing Cashfree's MDR directly with Razorpay for your transaction mix before deciding.
PayU
PayU is one of India's older and larger payment gateways, backed by Prosus. They process a significant share of Indian e-commerce transactions and are particularly strong in categories where EMI matters.
What it does well
PayU's EMI options are the best in this list. They have tie-ups with more banks for no-cost EMI and low-cost EMI than most competitors, and their checkout flow for EMI is smoother than average. If you sell electronics, furniture, fitness equipment, or anything with an average order value above ₹5,000 where buyers prefer to split payments, PayU is worth serious consideration.
They also have strong fraud detection tools built in, which is useful if you are seeing a lot of chargebacks or selling high-risk categories.
PayU's LazyPay BNPL integration is seamless for sellers who want to offer Buy Now Pay Later at checkout.
Honest drawbacks
The dashboard and developer experience feel older compared to Razorpay or Cashfree. Their API documentation has improved but integration can take longer, especially on custom stacks. Support quality is inconsistent — fine for standard queries, slower for billing disputes.
Settlement is T+2, which is standard but not exceptional. There is no native instant settlement option comparable to Cashfree's.
Fees summary
- UPI: 0% MDR (RBI rule)
- Cards and net banking: ~2% MDR
- Settlement: T+2
- No setup fee on standard plans; enterprise plans are negotiated
Verdict: The best choice if EMI conversion matters to your business. For standard D2C use without a strong EMI requirement, Razorpay or Cashfree are easier to work with.
Instamojo
Instamojo is positioned differently from the others. It started as a simple link-based payment tool for solo sellers and freelancers, and while it has grown into a fuller platform (they also offer a basic online store builder), its strength is still simplicity and zero-cost entry.
What it does well
There is genuinely no setup cost and no monthly fee. You can create an account, get verified quickly, and start accepting payments the same day. For someone testing a new D2C product or running a small side business alongside a marketplace presence, this is attractive.
The payment link feature is useful for Instagram or WhatsApp sellers who do not have a proper website yet — you can send a buyer a link and they pay directly. Instamojo also integrates with their own store builder (mojocommerce) if you want a quick-start storefront.
KYC and approval is typically faster than the enterprise-focused gateways.
Honest drawbacks
The per-transaction fee structure — 2% plus ₹3 per transaction — hurts on low-value orders. A ₹299 order carries a ₹9 fee, which is 3% effective MDR. At scale, this becomes expensive compared to flat-rate competitors.
Settlement is T+3, which is the slowest on this list. The checkout experience is also less polished than Razorpay or Cashfree, and international payment support is limited.
Instamojo is a stepping-stone product. It makes sense to start here and migrate when your monthly volume justifies it.
Fees summary
- UPI: 0% MDR (RBI rule)
- Cards and net banking: 2% + ₹3 per transaction
- Settlement: T+3
- No setup fee; no monthly minimum
Verdict: The right choice for brand-new sellers, solo D2C founders, and anyone not yet ready to go through a full business verification process. Plan to migrate to Razorpay or Cashfree once you are doing ₹1–2 lakh per month.
CCAvenue
CCAvenue is one of India's oldest payment gateways, run by Infibeam Avenues. It is heavily used by large enterprises, government portals, and businesses that need multi-currency support or very specific integration requirements.
What it does well
CCAvenue accepts the widest range of payment options of any gateway on this list — over 200 payment options by their count, including obscure net banking banks, all wallets, and multi-currency for international buyers. If you sell internationally or have buyers from Tier 3 cities using small regional banks, CCAvenue covers more ground than the others.
Their enterprise feature set — bulk settlements, multi-user account management, detailed reconciliation reports — is genuinely good for large operations.
Honest drawbacks
The MDR is the highest here at around 2.5%, and the interface and developer experience have not aged well. Integration is more complex and their documentation is not as beginner-friendly. For a typical D2C brand that wants to set up quickly, CCAvenue involves more friction than it is worth unless you specifically need what only they offer.
Settlement is T+2 to T+3 depending on your plan and bank.
Fees summary
- UPI: 0% MDR (RBI rule)
- Cards and net banking: ~2.5% MDR
- Settlement: T+2 to T+3
- Setup and AMC fees may apply on some plans
Verdict: Only consider CCAvenue if you have a specific requirement it uniquely fulfills — international payments, very specific bank coverage, or an enterprise compliance requirement. For most D2C sellers, the MDR and complexity are not justified.
Which Should You Choose?
New seller or first D2C store
Start with Instamojo. No setup fee, fast KYC, and you can accept payments today. Once you are doing consistent volume (roughly ₹1 lakh/month or more), the per-transaction fee will nudge you to switch — which is fine. Treat Instamojo as your launch pad.
Growing D2C brand (₹1 lakh to ₹20 lakh/month)
Razorpay is the default answer here for good reason. The ecosystem is mature, integration is straightforward, and the dashboard gives you everything you need to manage payments without a finance team. If you are running tight on cash flow or doing a high volume of returns, consider Cashfree instead — the faster settlement and refund handling are worth the switch.
High average order value (above ₹5,000) or EMI-driven sales
PayU wins here. Their EMI tie-ups and BNPL integrations are the strongest, and the incremental conversion you get from flexible payment options on big-ticket items often outweighs any MDR difference.
Large D2C brand or international sales
If you are doing significant international volume or need features like multi-currency settlement, route-based payment splitting, or enterprise-grade reconciliation, talk to both Razorpay (their enterprise plan has negotiated MDR) and CCAvenue (their multi-currency support is best-in-class). Do not pay 2.5% standard MDR on CCAvenue — negotiate.
For more on managing the business side of your D2C store, read our complete GST guide for e-commerce sellers and our GST registration beginners guide.
Frequently Asked Questions
Is UPI really free for sellers?
For transactions up to ₹2,000, yes — the RBI mandates that banks absorb the MDR cost, not merchants. For UPI transactions above ₹2,000, your gateway's standard MDR applies. Most D2C orders fall below ₹2,000 so this is effectively free for a large share of your volume.
How long does payment gateway KYC take?
Razorpay and Cashfree typically complete KYC in 2–5 business days if your documents are in order (GSTIN, cancelled cheque, PAN, business registration proof). Instamojo is often faster — sometimes same-day for sole proprietors. CCAvenue can take longer for new accounts.
Can I use two payment gateways on my store?
Yes, and some brands do. A common setup is Razorpay as the primary and a backup gateway for when the primary has downtime. This adds integration complexity but protects against revenue loss during outages.
What happens when a customer disputes a payment (chargeback)?
The gateway holds the disputed amount and you have to submit evidence (order confirmation, delivery proof, communication) within a deadline — usually 7–14 days. If the dispute goes against you, the amount is deducted from your settlement. All five gateways handle this, but Razorpay and Cashfree have better dispute management dashboards.
Do I need a GST number to activate a payment gateway?
For GST-registered businesses, yes — your GSTIN is required as part of KYC. Sole proprietors and unregistered businesses can activate using their PAN and bank details, but gateway and transaction limits may be lower until full KYC is complete. If you are not yet GST registered and your turnover is crossing the threshold, read our GST registration guide before you start selling at scale.
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