Razorpay vs PayU vs Cashfree vs Instamojo: Best Payment Gateway for Small Businesses

October 30, 2026 Swarojgar

What does a payment gateway do?

A payment gateway lets your business accept online payments by UPI, cards, net banking and wallets on your website, app, WhatsApp or through payment links, and settles the money into your bank account.

Quick comparison

Feature	Razorpay	PayU	Cashfree	Instamojo
Setup fee	₹0	₹0	₹0	₹0 on free plans
Annual maintenance	₹0 (standard plan)	₹0 (standard plan)	₹0 setup; premium services may carry charges	Paid plans available
Standard domestic fee	2%	2%	1.95%	2% + ₹3 (payment links); store plans differ
UPI	Zero MDR on standard UPI, but a 2% platform fee applies	Depends on business type and volume	As per applicable law; part of the platform fee block	As per plan
International cards	Custom pricing	3%	2.99% (Visa, Mastercard)	On request
Settlement	T+1 (instant settlement available for a fee)	Standard settlement cycle	Standard; faster options available	T+3 standard
Best for	Growing businesses, SaaS, D2C brands	Established e-commerce	Cost-conscious businesses, payouts	Micro businesses, creators, beginners

Razorpay

Razorpay is one of India’s most popular gateways, with a wide range of products: payment gateway, payment links, payment pages, subscriptions, invoices, QR codes and payroll.

Pricing (standard): 2% per transaction, with zero setup fee and zero annual maintenance. On standard UPI there’s zero MDR, but Razorpay charges a 2% platform fee. Credit cards on UPI (RuPay) carry 2.15%. Businesses processing over ₹5 lakh a month can request custom pricing.

Pros: many features, easy plugins for WooCommerce and Shopify, T+1 settlement, good dashboard.

Cons: standard rate isn’t the lowest.

PayU

PayU is an established gateway used by many e-commerce businesses.

Pricing (standard): 2% for Visa and Mastercard, net banking, wallets and BNPL; 3% for Diners, Amex, EMI and international. UPI rates depend on business type and volume. No setup or annual fees on the standard plan.

Pros: reliable, strong for e-commerce, many payment options.

Cons: UPI pricing isn’t openly listed; you need to ask.

Cashfree Payments

Cashfree is known for competitive pricing and strong payout products (for paying vendors, refunds and salaries).

Pricing (standard): 1.95% for most domestic modes, including major cards; international cards at 2.99% (Amex 2.95%). Zero setup fee. Cashfree also runs offers for new merchants, so check current terms.

Pros: slightly lower standard rate; strong payouts; good for marketplaces.

Cons: some premium services carry additional charges.

Instamojo

Instamojo is designed for very small businesses, freelancers and creators who want to start quickly, often without a website.

Pricing: free payment links at 2% + ₹3 per transaction. Online store plans range from a free Lite plan (5% + ₹3) to paid plans with lower fees (for example, 2% + ₹3 on Growth). Standard payouts settle in T+3 days.

Pros: very easy to start; free online store; good for selling digital products and services.

Cons: higher effective fees on free store plans; slower standard settlement.

Which payment gateway should you choose?

Your business	Best fit
Freelancer, home business or creator selling occasionally	Instamojo payment links or Razorpay payment links
Small online store on WooCommerce or Shopify	Razorpay or Cashfree
High-volume e-commerce	PayU, Razorpay or Cashfree (negotiate custom pricing)
Business that pays many vendors or customers	Cashfree (payouts) or Razorpay
SaaS or subscription business	Razorpay (subscriptions)

Don’t forget: free UPI for in-person payments

For in-person sales at a shop, a direct UPI QR code from your bank or a UPI app is usually cheaper than a payment gateway, because standard UPI payments to merchants carry zero MDR. Gateways make sense when you need online checkout, payment links, automatic reconciliation or card payments.

Documents usually needed for KYC

PAN (business and/or owner)
Business proof: GST certificate, Udyam registration, shop licence, or incorporation documents
Bank account details (cancelled cheque or statement)
Website or app link with terms, privacy policy and refund policy, or social media pages for link-based selling
Address proof

Frequently asked questions

Which payment gateway has the lowest charges in India?

On standard published pricing, Cashfree lists 1.95% versus about 2% for Razorpay and PayU. Actual cost depends on your payment mix, offers and negotiated rates.

Do payment gateways charge for UPI?

Standard UPI has zero MDR, but some gateways charge a platform fee for processing UPI through their checkout. Check each provider’s current pricing.

Can I get a payment gateway without a website?

Yes. Razorpay, Instamojo and others offer payment links and payment pages that work without a website.

How quickly will I receive money?

Razorpay’s standard settlement is T+1. Instamojo’s standard payout is T+3. Most gateways offer faster settlement for an extra fee.

Is GST charged on payment gateway fees?

Yes. 18% GST applies on the transaction fee.