How to accept online payments as a small business
To accept online payments, a UPI QR or link is cheapest. A payment gateway adds cards and net banking for about 2% plus GST a payment.
The cheapest way for a small business to accept online payments is a UPI QR code or UPI link straight to your bank account. A payment gateway adds cards, net banking and wallets, and confirms each payment for you, for a fee of around 2% plus GST on every payment.
Picture a salon in Lake Gardens (an example, not a real client). It takes UPI at the counter already. Now it wants customers to pay a small deposit when they book online, and to sell gift cards on its website.
Which option fits depends on what you're selling, who's paying and how you want to know the money arrived.
Three ways to accept online payments
Most small businesses use one or more of these. They aren't either-or.
- A UPI QR or UPI link to your own bank account. The customer pays from any UPI app. Money lands in your account straight away.
- A payment link from a gateway. You send a link on WhatsApp or by email. The customer can pay by UPI, card or net banking, and you get a confirmation.
- A gateway checkout on your website. The payment is part of booking or ordering, so the booking is confirmed only when the money arrives.
A UPI QR is perfect for the counter and for invoices. A gateway earns its fee when you need to know automatically that someone paid, or when customers want to pay by card.
What a payment gateway costs
Gateway pricing changes, and most offer custom rates above a certain volume. As an example, here is Razorpay's published standard pricing, as of November 2026 (Razorpay).
| Item | Standard plan |
|---|---|
| Fee per successful payment | 2% plus GST |
| Standard UPI from a bank account | No bank charge (MDR), but the 2% platform fee applies |
| Credit card on UPI (RuPay) | Platform fee of 2.15% plus GST |
| Setup fee | ₹0 |
| Annual maintenance charge | ₹0 |
| When fees are taken | Deducted from each payment before it's settled to your bank |
Razorpay offers custom pricing for businesses taking more than ₹5 lakh a month. Other gateways price differently, and some add setup fees or yearly charges instead of a higher rate.
Work out what you'd really pay. At ₹1,00,000 a month through a gateway at 2%, the fee is ₹2,000, plus GST on that fee.
UPI QR, links or a gateway: which to use
Use this as a starting point, then check it against your own numbers.
| What you're doing | Best fit | Why |
|---|---|---|
| Counter payments | UPI QR | No fee, money in your account at once |
| Invoices to regular customers | UPI QR or link on the invoice | Cheap, and customers already use UPI |
| Booking deposits online | Gateway checkout | The slot is held only when payment succeeds |
| Gift cards or packages on your site | Gateway checkout | Card payers can buy too, and you get a record |
| Large or business payments | Bank transfer, with UPI as backup | No percentage fee on big amounts |
The real cost of a direct UPI QR is your time. Someone has to check the bank app and mark each payment as received. A gateway does that for you, which matters once you have dozens of payments a day.
Our guide on how a small UPI deposit cuts no-shows explains how much deposit to ask for, and when to refund it.
What you need to sign up
Gateways have to check who you are before they let you take money. Have these ready before you apply:
- PAN of the business or the owner, for a sole proprietor
- A current or savings account in the business's name
- GSTIN, if you're registered
- A website or app with your prices, terms, privacy policy and refund policy
- An address and phone number customers can reach
Each gateway publishes its own document list, so check theirs before you apply. Write the refund policy in plain words: what you refund, how fast, and to which account.
Test it before customers do
Before you put a payment button live, try it yourself, the way a customer would. Small problems here cost real bookings.
- Pay from your own phone, once by UPI and once by card, for a small amount.
- Check the confirmation: the customer should see a clear receipt, and you should get a message or email.
- Check the booking or order: it should show as paid, with the payment reference.
- Refund the test payment, and note how long it takes to come back.
- Try a failed payment, by cancelling halfway, and make sure no booking is made.
Repeat the test after any change to your website or prices.
Keep refunds and records simple
Every online payment needs a matching record, and every refund needs a reason. Set this up on day one.
- One reference per payment. Match each payment to an invoice or booking number.
- Refund to the same method. Refund a UPI payment to the same UPI account, and a card to the same card.
- Say when the refund will land. Tell the customer how many working days it will take.
- Give your CA the gateway report. Gateway fees carry GST, so ask your CA how to record them.
If you send GST invoices, put the UPI QR on the bill itself. Our guide to a GST invoice your customer can pay by UPI shows how.
If you'd like help
Not sure whether you need a gateway at all? Ask for a free audit and we'll look at how your customers pay today, or WhatsApp us on +91 62918 31815.
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