Choosing a payment gateway for an Indian store

The situation

A spice exporter in Kochi sells cardamom, pepper and spice blends. Most of its revenue is bulk export on letters of credit, handled by its bank. Two years ago it opened an online store for retail buyers in India, and now it gets steady enquiries from Indian families abroad who want to order small packs. The founder's son set up the store with the first gateway that approved them. Settlements arrive late, refunds take a week of emails, and the gateway does not accept international cards on their account.

Choosing a gateway well at the start avoids most of this. The headline fee matters, but it is rarely what causes trouble.

What a gateway does, and what it does not

A payment gateway, more precisely a payment aggregator in Indian regulatory terms, collects money from your customers by UPI, cards, net banking and wallets, holds it briefly, and settles it to your bank account after deducting its fee. In India, payment aggregators are regulated by the Reserve Bank of India, which publishes a list of entities it has authorised. Check that any gateway you consider is on that list or is in the authorisation process, and confirm the current position on the RBI website.

The gateway, not your store platform, carries the card data. Under RBI rules on card storage, merchants and platforms should not store full card numbers; saved cards work through tokens issued by the card networks. This is also why PCI DSS obligations sit mainly with the gateway. Your store sends the customer to the gateway's checkout or embeds it, and gets back a result.

What to compare

Payment methods your buyers actually use

For most Indian retail stores, UPI is the method that matters most, followed by cards and net banking. Look at how the gateway handles UPI: intent flow on mobile (which opens the buyer's UPI app directly) usually converts better than asking buyers to type a UPI ID. If you sell to buyers abroad, ask specifically whether international cards are enabled for your account type, and what extra documents that needs. Cross-border collections have their own RBI framework, so expect more questions.

Fees, read in full

Compare the fee per method, line by line. Ask about fees on international cards, on refunds, on failed transactions, and whether GST is charged on the fee (it usually is). Ask whether there are setup or annual charges. For a store with small average orders, a fixed per-transaction charge can matter more than the percentage.

Settlement

Ask how many working days after payment money reaches your bank, whether that is the same for every method, and whether a settlement report matches each payout to individual orders. The Kochi exporter's real problem was reconciliation: payouts arrived as single amounts, and nobody could tell which orders they covered.

Refunds

Ask whether refunds, full or partial, can be made from your store admin or only from the gateway dashboard, and how long a refund takes to reach the buyer. Refund speed shapes how buyers judge you, and slow refunds turn into chargebacks.

Onboarding and support

Ask how long approval takes for your business type and what triggers extra checks. Some product categories, such as food supplements, high value electronics or anything that looks regulated, take longer. Ask who you will speak to when a payout is held.

What to prepare before you apply

Gateways review your business and your website. Typical requests include:

• PAN of the business and of the signatories.
• GST registration, if you have one.
• Bank account proof in the business name.
• Business registration documents, such as a certificate of incorporation or partnership deed.
• A live website that shows your terms, privacy policy, refund and cancellation policy, shipping policy and contact details, with product prices visible.

The last point catches many stores. A store with placeholder policies or no contact address is often sent back. Write the policies before you apply.

Where ShopenUp fits

ShopenUp connects to the payment gateway you choose. Gateway integrations and manual payment options such as bank transfer and cash on delivery work from day one. Your contract and fees are with the gateway directly, so you keep the relationship and can change gateways later.

If you need something beyond a standard checkout, it is built or integrated for you. Common examples are recurring billing for subscriptions, prices shown in more than one currency for buyers abroad, or a second gateway for international cards alongside your main one. The Kochi exporter needed exactly that last case, plus an export of settlements in a format their accountant could reconcile.

Test before you switch

Every gateway offers a test mode. Use it to place orders with each payment method, cancel one halfway, fail one on purpose and refund one in part. Then check that the order status in your store admin matches what happened at the gateway each time. Do the same with one small real payment on live keys before you announce anything. A mismatch found here costs an afternoon; found during a sale, it costs orders and angry messages.

Limits

No gateway approves every business, and approval criteria change. A gateway can also hold settlements or ask for documents after you go live, especially after a sudden jump in volume or a cluster of disputes. Keep your documents current and tell the gateway before a big sale.

Fees and settlement terms change too. What you are quoted today may be revised, so read the agreement for notice periods and keep a copy. Confirm current RBI requirements and your tax position with your CA.

Finally, the gateway is one part of checkout. A slow store, a confusing cart or unexpected shipping charges at the last step lose more sales than a small difference in fees.

Checklist

• Gateway checked against the RBI list of authorised payment aggregators.
• UPI intent flow tested on a phone.
• International cards confirmed in writing, if you need them.
• Fees compared per method, including refunds and GST on fees.
• Settlement timing and settlement reports seen before signing.
• Refunds possible in full and in part, with a stated time to reach the buyer.
• Policies, contact details and prices live on the site before applying.
• A named contact at the gateway for held payouts.

For how checkout, gateways and manual payments work on ShopenUp, see payments and checkout.