Comparison · Updated October 21, 2026
PhonePe Payment Gateway vs Paytm Payment Gateway
PhonePe Payment Gateway
B-
PhonePe Payment Gateway (PhonePe PG) is the online payments product of PhonePe Limited, the Bengaluru company behind India's most-used UPI app, which is majority-owned by Walmart. It lets Indian businesses take UPI, cards, net banking and wallet payments on a website or app and settles in rupees to an Indian bank account. As of October 2026 the pricing page lists a standard plan at 1.99% per transaction, struck through and shown as free under a limited-period offer, with 18% GST on top of any fee. There is no setup or annual maintenance fee. The page does not say how long the free period lasts or what each payment method costs once it ends. PhonePe Limited signs the merchant directly and collects customer payments into its own designated account before settling them, under a Reserve Bank of India Payment Aggregator authorisation granted in September 2025 and extended to in-store payments in November 2025. The standard terms settle within T+2 working days, let you leave on seven days' notice with no exit fee, and let PhonePe change fees at its discretion and withhold settlements: for up to 180 days if it suspects fraud or a prohibited business, and with no stated time limit after termination or high chargebacks. In September 2025 the RBI fined PhonePe ₹21 lakh after its escrow balance fell short of what it owed wallet holders and merchants on certain days.
Paytm Payment Gateway
B-
Paytm Payment Gateway is the online payments business of Paytm Payments Services Limited (PPSL), a wholly owned subsidiary of One 97 Communications, the listed company behind the Paytm brand. It lets Indian businesses take UPI, cards, net banking, EMI and wallet payments on a website or app, and settles in rupees to an Indian bank account, by default the next day. As of October 2026 the standard plan is 1.99% per transaction with 18% GST on top, no setup fee, and custom pricing for large businesses. PPSL is a Reserve Bank of India-authorised Payment Aggregator: it signs the merchant, pools customer funds in an escrow account and settles them, which makes it a payment facilitator rather than a bare gateway. That authorisation came late. The RBI turned down PPSL's first application in November 2022 and barred it from onboarding new online merchants. The bar was lifted with in-principle approval in August 2025, and the full certificate followed on 26 November 2025. Offline and cross-border authorisations were added on 17 December 2025. The RBI action that closed Paytm Payments Bank, which ended in the cancellation of its banking licence on 24 April 2026, concerned a separate group company and not PPSL. The product is broad and built for scale. The published merchant terms, however, list fees that are hard to reconcile with the one-line pricing page, and they favour Paytm on fee changes, withheld settlements and liability.
VS
Overview
We compare the two for an Indian business taking payments on its own website or app, using each company's online payment gateway: not the consumer apps, and not the QR codes, Soundbox speakers or card machines they sell to shops. Prices are those published as of October 2026, and both companies add 18% GST to their fee, not to the customer's payment. The headline rate is the same on paper: 1.99% per transaction on each standard plan. PhonePe shows its 1.99% struck through and charges nothing under a limited-period offer. It does not say when the offer ends, and it publishes no per-method rates for online merchants. Paytm's pricing page says its 1.99% is "Applicable on all transactions", which on its face includes UPI. Its merchant terms also list a separate MDR schedule, 0.51% on credit cards and Amex and 1.00% on international cards, without saying whether that is added to the 1.99%. Paytm settles the next day by default and sells same-day, on-demand and real-time settlement. PhonePe settles in T+2 working days. Paytm takes international cards in 72+ currencies. PhonePe lists Mastercard only. Both companies are now fully authorised by the Reserve Bank of India as payment aggregators: PhonePe Limited since September 2025, and Paytm Payments Services Limited (PPSL) since November 2025, after an RBI bar on signing new online merchants that ran from November 2022 to August 2025. Payment Review grades both B-.
Key Takeaways
- ✓It depends on what you sell and to whom. Both are graded B- and both list a 1.99% + 18% GST standard plan, so the choice comes down to the offer, settlement speed and international cards.
- ✓PhonePe is free for now, but only for now. Its 1.99% is struck through and replaced with "Free*" under a limited-period offer of unstated length, and it publishes no per-method rate for online merchants. Get the rate after the offer, and the end date, in writing.
- ✓Paytm's price is published but harder to read. The pricing page says 1.99% "Applicable on all transactions", so UPI and RuPay debit payments cost 1.99% + GST even though their MDR is zero. Its terms add a 0.51% credit-card MDR and a 1.00% international-card MDR beside a 1.99% fee, without saying whether they stack.
- ✓Paytm is faster and broader. It settles next day by default (its terms allow T+2) and offers same-day, on-demand and real-time settlement, and it takes international cards in 72+ currencies. PhonePe settles in T+2 working days and lists only Mastercard for foreign cards.
- ✓Both are RBI-authorised payment aggregators. PPSL's licence came after a 2022–2025 bar on new online merchants. The RBI action that closed Paytm Payments Bank concerned a separate company. PhonePe was fined ₹21 lakh by the RBI in September 2025 over its escrow balance.
PhonePe Payment Gateway
Choose PhonePe Payment Gateway if you are a small or new Indian online business taking mostly domestic UPI and card payments, want to start without fees during its current offer, and value a contract you can leave on seven days' notice. Get the post-offer rate for each payment method in writing first.
Paytm Payment Gateway
Choose Paytm Payment Gateway if you need next-day or faster settlement, sell to customers abroad, or want a published fee schedule to negotiate from. Ask Paytm to confirm in writing whether its card MDR is added to the 1.99% fee.
The Verdict
It Depends on Your Needs
Why?
Both are graded B-, and neither wins outright. PhonePe is cheaper today because its standard plan is free under a limited-period offer, but it does not say when that ends or what each payment method will cost afterwards. Its contract is easy to leave, on seven days' notice. Paytm costs 1.99% + GST on every payment, UPI included, and its terms add a card MDR schedule whose effect on the 1.99% is unclear. In return it settles the next day by default, offers same-day and real-time settlement, and takes international cards in 72+ currencies, where PhonePe settles in T+2 working days and takes only Mastercard from abroad. Choose PhonePe to start cheaply on mostly domestic UPI payments. Choose Paytm if cash flow or foreign customers matter more. With either, get the all-in rate for each payment method in writing before you integrate.
Feature by feature
Detailed Comparison
Filter Options
Online pricing (India, standard plan, + 18% GST on the fee, October 2026)
| Feature | PhonePe Payment Gateway | Paytm Payment Gateway |
|---|---|---|
| Standard plan headline rate | 1.99% listed; free under a limited-period offer | 1.99% on all transactions |
| PhonePe's pricing page shows the Standard Plan's 1.99% struck through and "Free*", with "*T&C Apply" and no linked offer terms or end date. Its FAQ calls this a "flat promotional rate", but another FAQ on its payment gateway page describes the limited-period offer as "transaction fees starting at 1.99%", so PhonePe's own pages disagree on whether the offer is fee-free. A June 2024 PhonePe press release described the offer then as 0% for up to three months from onboarding; the current page gives no duration. Paytm's pricing page lists 1.99% as "Platform fees", "Applicable on all transactions", with 18% GST on top. On a ₹1,000 payment, 1.99% is ₹19.90 plus ₹3.58 GST, or ₹23.48. Both offer custom enterprise pricing. PhonePe is cheaper while its offer lasts, but because the offer's length and the price after it are not published, we give no winner. | ||
| UPI and RuPay debit | Free under the offer; later rate Not disclosed | 1.99% (MDR 0%, plus 1.99% fee) |
| UPI and RuPay debit payments carry zero MDR under Indian rules as of 21 October 2026. Paytm's terms list UPI MDR at 0.00% ("Currently Nil due to regulatory guidelines") and debit-card MDR at 0.00%, but its 1.99% fee applies to every completed transaction. PhonePe's pricing FAQ says fees "can vary slightly by payment method" and that current rates are listed on the page, but no per-method table appears there. The Ministry of Finance announced on 15 September 2026 a 0.4% MDR on most UPI merchant payments above ₹2,000, capped at ₹300 per transaction, with a flat ₹5 in essential sectors and small merchants exempt. NPCI deferred it on 13 October 2026 to "immediately post Diwali at a date to be notified separately", so it is not in force. | ||
| Domestic credit cards and Amex | Not disclosed | 1.99% headline; terms add 0.51% MDR |
| Annexure A of Paytm's online merchant terms lists MDR of 0.51% on credit, corporate, prepaid and American Express cards, 0.30% on RuPay credit cards on UPI and UPI credit lines, and 0.00% on net banking, alongside a 1.99% "VAS (Value Added Services) Fee" charged on completed transactions. The terms do not say whether the MDR is added to the 1.99%. Read literally, a credit-card payment would cost about 2.5% + GST. PhonePe publishes no online card rate beyond the struck-through 1.99%. | ||
| International cards | Typically 3% to 4% (FAQ) | 1.99% headline; terms add 1.00% MDR |
| PhonePe's international payments FAQ says the standard rate "typically ranges between 3% to 4% + GST", with lower rates negotiable, while its pricing page says international payments come "under the same pricing structure". The two pages disagree. Paytm's terms list a 1.00% international-card MDR beside the 1.99% fee, with the same stacking question as above. Paytm's dynamic currency conversion fee is paid by the customer. | ||
| Setup and annual maintenance fee | ₹0 setup; ₹0 annual maintenance | ₹0 setup; AMC waived for 12 months (terms) |
| PhonePe advertises zero setup and zero annual maintenance fees. Paytm's pricing FAQ says there is a zero setup fee and no Annual Maintenance Charges, but Annexure A of its terms says the AMC is "Waived Off" with "Waiver valid for first 12 months" and gives no amount after that. Because Paytm's own documents conflict, we give no winner; ask Paytm whether an AMC applies from month 13. | ||
Standard plan headline rate
PhonePe Payment Gateway
1.99% listed; free under a limited-period offer
Paytm Payment Gateway
1.99% on all transactions
PhonePe's pricing page shows the Standard Plan's 1.99% struck through and "Free*", with "*T&C Apply" and no linked offer terms or end date. Its FAQ calls this a "flat promotional rate", but another FAQ on its payment gateway page describes the limited-period offer as "transaction fees starting at 1.99%", so PhonePe's own pages disagree on whether the offer is fee-free. A June 2024 PhonePe press release described the offer then as 0% for up to three months from onboarding; the current page gives no duration. Paytm's pricing page lists 1.99% as "Platform fees", "Applicable on all transactions", with 18% GST on top. On a ₹1,000 payment, 1.99% is ₹19.90 plus ₹3.58 GST, or ₹23.48. Both offer custom enterprise pricing. PhonePe is cheaper while its offer lasts, but because the offer's length and the price after it are not published, we give no winner.
UPI and RuPay debit
PhonePe Payment Gateway
Free under the offer; later rate Not disclosed
Paytm Payment Gateway
1.99% (MDR 0%, plus 1.99% fee)
UPI and RuPay debit payments carry zero MDR under Indian rules as of 21 October 2026. Paytm's terms list UPI MDR at 0.00% ("Currently Nil due to regulatory guidelines") and debit-card MDR at 0.00%, but its 1.99% fee applies to every completed transaction. PhonePe's pricing FAQ says fees "can vary slightly by payment method" and that current rates are listed on the page, but no per-method table appears there. The Ministry of Finance announced on 15 September 2026 a 0.4% MDR on most UPI merchant payments above ₹2,000, capped at ₹300 per transaction, with a flat ₹5 in essential sectors and small merchants exempt. NPCI deferred it on 13 October 2026 to "immediately post Diwali at a date to be notified separately", so it is not in force.
Domestic credit cards and Amex
PhonePe Payment Gateway
Not disclosed
Paytm Payment Gateway
1.99% headline; terms add 0.51% MDR
Annexure A of Paytm's online merchant terms lists MDR of 0.51% on credit, corporate, prepaid and American Express cards, 0.30% on RuPay credit cards on UPI and UPI credit lines, and 0.00% on net banking, alongside a 1.99% "VAS (Value Added Services) Fee" charged on completed transactions. The terms do not say whether the MDR is added to the 1.99%. Read literally, a credit-card payment would cost about 2.5% + GST. PhonePe publishes no online card rate beyond the struck-through 1.99%.
International cards
PhonePe Payment Gateway
Typically 3% to 4% (FAQ)
Paytm Payment Gateway
1.99% headline; terms add 1.00% MDR
PhonePe's international payments FAQ says the standard rate "typically ranges between 3% to 4% + GST", with lower rates negotiable, while its pricing page says international payments come "under the same pricing structure". The two pages disagree. Paytm's terms list a 1.00% international-card MDR beside the 1.99% fee, with the same stacking question as above. Paytm's dynamic currency conversion fee is paid by the customer.
Setup and annual maintenance fee
PhonePe Payment Gateway
₹0 setup; ₹0 annual maintenance
Paytm Payment Gateway
₹0 setup; AMC waived for 12 months (terms)
PhonePe advertises zero setup and zero annual maintenance fees. Paytm's pricing FAQ says there is a zero setup fee and no Annual Maintenance Charges, but Annexure A of its terms says the AMC is "Waived Off" with "Waiver valid for first 12 months" and gives no amount after that. Because Paytm's own documents conflict, we give no winner; ask Paytm whether an AMC applies from month 13.
Best For Your Business
Recommendations based on your business type
New or small online seller taking mostly domestic UPI payments
Recommended
PhonePe Payment Gateway
PhonePe's standard plan is free under its current offer, with no setup or annual fee, and you can leave on seven days' notice. Paytm's 1.99% + GST applies to UPI too, which is about ₹23.48 on a ₹1,000 payment. Ask PhonePe for the offer end date and its post-offer UPI rate in writing.
Business selling to customers outside India
Recommended
Paytm Payment Gateway
Paytm takes international cards in 72+ currencies with dynamic currency conversion and settles in INR. PhonePe lists only Mastercard for foreign cards, charged in rupees.
Business that needs money in the bank quickly
Recommended
Paytm Payment Gateway
Paytm settles next day by default and sells same-day, on-demand and real-time settlement. PhonePe's standard settlement is T+2 working days and it publishes no faster option for online merchants. Paytm does not publish the price of faster settlement, so ask.
Subscription or SaaS business billing monthly
Both support UPI AutoPay and NACH e-mandates. Neither publishes a separate subscription price. Compare the rate each quotes for recurring UPI and card debits.
Marketplace paying out to several sellers
Both offer split settlements that pay each vendor's share from one customer payment. Paytm's faster settlement options may matter more to sellers; PhonePe's split settlements typically follow T+2.
PhonePe Payment Gateway: Best for 1 use case
Paytm Payment Gateway: Best for 2 use cases
Frequently Asked Questions
Common questions about this comparison
Right now, PhonePe. As of October 2026 its standard plan, listed at 1.99%, is free under a limited-period offer, while Paytm charges 1.99% + 18% GST on every transaction (about ₹23.48 on a ₹1,000 payment). But PhonePe does not say when its offer ends or publish a per-method rate for online merchants, and Paytm's terms list a separate card MDR (0.51% on credit cards and Amex, 1.00% on international cards) without saying whether it is added to the 1.99%. Get the all-in rate for each payment method in writing from whichever you choose.
UPI carries zero MDR under Indian rules as of 21 October 2026, but that does not make it free from either gateway. Paytm's 1.99% fee applies to all transactions, UPI included. PhonePe charges nothing during its current offer and has not published what UPI will cost afterwards. The government announced a 0.4% MDR on most UPI merchant payments above ₹2,000, capped at ₹300, but NPCI deferred it on 13 October 2026 to a date after Diwali that has not yet been notified.
Paytm. Its payment gateway page gives next day (T+1) as the default settlement cycle, and it offers same-day, on-demand and real-time settlement, though its terms only commit to T+2 and it publishes no price for the faster options. PhonePe's terms settle within T+2 working days, and it publishes no faster option for online merchants.
Not directly. The gateway is run by Paytm Payments Services Limited (PPSL), a separate subsidiary of One 97 Communications. The RBI's 2024 action against Paytm Payments Bank made One 97 and PPSL move their nodal accounts away from that bank by 29 February 2024, and the RBI cancelled the bank's licence on 24 April 2026. PPSL holds its own RBI payment aggregator authorisation, granted on 26 November 2025 and extended to in-store and cross-border payments on 17 December 2025.
Yes. PhonePe Limited received final RBI authorisation as an online payment aggregator in September 2025, extended to in-store payments in November 2025. Paytm Payments Services Limited received its certificate on 26 November 2025, after the RBI had barred it from onboarding new online merchants from November 2022 to August 2025. Both hold customer payments in a regulated account and settle to your Indian bank account.
Yes, but only Mastercard, according to PhonePe's international payments page. International acceptance is off by default and must be requested, buyers are charged in rupees, and PhonePe's FAQ puts the rate at typically 3% to 4% + GST, though its pricing page says international payments come under the same pricing as domestic ones. Paytm accepts international cards in 72+ currencies with dynamic currency conversion, after partner-bank approval.