PhonePe Payment Gateway Review

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.

Estimated annual cost at three realistic processing volumes, using PhonePe Payment Gateway’s published online rate plus monthly fees. Real costs vary with average transaction size, chargeback rate, and any negotiated terms.

What PhonePe Payment Gateway is

PhonePe Payment Gateway, branded PhonePe PG, is the online payments product of PhonePe Limited, the Bengaluru company behind the PhonePe UPI app. It lets Indian businesses accept UPI, cards, net banking and wallet payments on a website or app, plus payment links, dynamic QR codes and recurring payments through UPI AutoPay. PhonePe launched its own payment gateway in June 2023, as reported at the time, with a free onboarding offer aimed at small and medium businesses. The PhonePe app itself went live in August 2016, the same year Flipkart acquired PhonePe, according to the company's own timeline.

The corporate history is longer than the brand's. PhonePe's updated draft prospectus, dated 21 January 2026, says the company was incorporated on 18 December 2012 as FX Mart Private Limited, renamed PhonePe Private Limited in November 2016, and converted to a public company named PhonePe Limited in April 2025. Because the legal entity predates the brand by four years, we do not give a single founding year. Walmart controls the company: its promoters are WM Digital Commerce Holdings Pte. Ltd. and Wal-Mart International Holdings, Inc., and the prospectus says WM Digital Commerce Holdings held 71.77% of the pre-offer share capital, on a fully diluted basis, as of its 21 January 2026 date. PhonePe has filed for an initial public offering made up entirely of shares sold by existing shareholders. Press and IPO-tracker reports in October 2026 say the shares have not yet listed.

The parent is very large. The prospectus reports 657.56 million registered users and 47.19 million registered merchants as of 30 September 2025, of which 11.11 million were monthly active merchants. Revenue from merchant payments, which includes both in-store and online merchants, was ₹19,910.36 million in the year to March 2025, about 28% of revenue from operations. The prospectus does not break out the online gateway on its own, so these figures describe the PhonePe group rather than PhonePe PG.

Why we list it as a payment facilitator

PhonePe Limited holds the merchant relationship itself. Its Client Terms and Conditions – Online (B2B), updated 8 October 2026, name PhonePe Limited as the contracting party. Under them, the merchant authorises PhonePe to collect customer payments into a 'Designated PhonePe Account' and pay out the settlement amount after deducting fees, refunds and chargebacks. PhonePe also runs the merchant's KYC, sets the price and decides when to hold funds. The RBI authorised PhonePe as an online payment aggregator in September 2025, and in November 2025 replaced that with certificate 245/2025 covering online and physical payment aggregation. This is the payment aggregator model, which our taxonomy treats as a payment facilitator rather than a bare gateway. Banks, card networks and NPCI remain the 'Facility Providers' that authorise and move the money.

What it costs

• Standard Plan: listed at 1.99% per transaction, struck through and shown as 'Free*' under a limited-period offer, as of October 2026. The offer's terms and length are not published on the page.
• GST: 18% on top of PhonePe's fee, charged on the fee only, not on the customer's payment.
• No setup fee and no annual maintenance fee.
• Enterprise Plan: custom pricing for high-volume businesses, with priority onboarding and a dedicated account manager.
• International cards: PhonePe's international payments FAQ says the standard rate typically ranges between 3% and 4% + GST, with lower rates negotiable, while the pricing page says international payments come under the same pricing structure. The two pages disagree.
• No per-chargeback or refund fee is published, but PhonePe may keep its fee on a refunded or charged-back transaction.

The free offer is real, but it makes the long-run price hard to judge. PhonePe's June 2024 press release described the offer as 0% transaction fees for up to three months from onboarding. The current pricing page gives no duration. Its FAQ says fees vary by payment method and that current rates are listed on the page, but no per-method table appears there. By contrast, PhonePe publishes a detailed fee schedule for its in-store merchants, updated 14 October 2026, with rates for each payment method, merchant size and business category. The online terms say fees are set out in 'Additional Terms' or as agreed in writing, and we could not find those Additional Terms published. Before you integrate, get the per-method rate and the offer end date in writing.

On a 1.99% plan, a ₹1,000 card payment would cost ₹19.90 plus ₹3.58 GST, or ₹23.48 in total, about 2.35%. That is arithmetic on the listed rate, not a published quote. UPI pricing may also change. The Ministry of Finance announced on 15 September 2026 a 0.4% MDR on UPI payments to merchants above ₹2,000, capped at ₹300 from ₹75,000. It was first due from 15 October 2026, but NPCI said on 13 October 2026 that it would be implemented immediately after Diwali on a date to be notified separately. As of 20 October 2026 it is not in force. PhonePe's in-store fee schedule already lists these UPI charges, to apply from the NPCI notification.

How it works

Onboarding is digital. You provide your PAN, GST registration, bank account and the website and app URLs you will use, and PhonePe checks them against government records and its own policies. You then choose an integration. PhonePe says the hosted Standard Checkout processes card data entirely on its servers, so you do not need your own PCI DSS certificate. Custom APIs give you control of the checkout; the terms require merchants to comply with PCI DSS where it applies. There are SDKs and an SDK-less route for Android and iOS, and plugins for WooCommerce, Shopify, OpenCart and Magento. Buyers can pay by UPI from any UPI app, cards on Visa, Mastercard, RuPay, Maestro and American Express, net banking at 50+ banks and wallets. Buyers who use PhonePe or another UPI app can pay with instruments already saved in that app, and PhonePe says its routing tracks bank and method health in real time to avoid failed payments. International cards are off by default and must be requested, and the FAQ lists only Mastercard for them.

Settlement, holds and contract terms

The standard terms (clause 4(c)) commit PhonePe to settle within T+2 working days of the transaction, unless agreed otherwise in writing, and the UPI gateway FAQ gives T+2 as the default. Some Indian gateways offer next-day settlement as standard, so if cash flow matters, negotiate it. Settlement is net of fees, GST, refunds and chargebacks. If a chargeback goes against you, or you do not send evidence in time, PhonePe deducts it from later settlements, and any shortfall is due by the next bank working day (clause 5(c)).

The rest of the terms favour PhonePe, as is common in this market. PhonePe can change its fees 'in its sole and absolute discretion' with notice to you, and continued use counts as acceptance (clause 3(u)). The terms themselves take effect as soon as a new version is posted. PhonePe may withhold settlements for up to 180 days if it suspects fraud or a prohibited business, and for as long as a regulator's order requires (clause 4(f)). A separate clause, 10(d), lets it hold settlements on suspicious activity, high chargebacks or termination until its internal investigation is complete, with no time limit stated. Its total liability is capped at the fees payable in the month before a claim (clause 8(c)). The merchant consents to PhonePe sharing account and transaction data with its group companies to offer other products, and to marketing calls that the terms say fall outside India's Do Not Call registry. PhonePe may use your name and logo to promote its service without charge. On the merchant's side, the contract is easy to leave: there is no minimum term, either party can end it on seven days' written notice (clause 10(b)), and no exit fee is listed. Disputes go to the courts of Bangalore under Indian law.

Reputation, regulation and complaints

PhonePe is India's largest UPI app. Its prospectus cites NPCI data, via a Redseer report, giving it a 46.85% share of UPI transaction volume as of 30 September 2025. Its regulatory record is not spotless. On 10 September 2025 the RBI fined PhonePe Limited ₹21 lakh after an inspection of October 2023 to December 2024 found that on certain days its escrow balance was less than the value of outstanding wallets and payments due to merchants, and that it had not reported the shortfall promptly. In the same month, after an RBI letter about credit card payments of rent to recipients who were not onboarded as merchants, PhonePe stopped its rent and related payment services. It had already stopped providing payment gateway services to real-money gaming platforms from 22 August 2025, the date its prospectus gives for the enactment of the Online Gaming Act. The prospectus also discloses that the Enforcement Directorate summoned PhonePe for evidence in money-laundering investigations into certain third-party merchants that used its payment aggregator and gateway services. The prospectus says those investigations are not against PhonePe, its directors or its promoters.

Independent merchant reviews of the gateway are scarce. PhonePe's Trustpilot page, which covers the whole brand and is mostly about the consumer app, had a TrustScore of 1.5 from 208 reviews on 20 October 2026. That score is lower than its star distribution suggests: 14% five-star and 48% one-star. The profile is unclaimed and PhonePe does not invite reviews there. Recent one-star reviews describe stuck payments, tickets closed without a fix and difficulty reaching support, and one business user describes losing a month and a half to onboarding before learning that credit card payments would not work. We could not load G2's page for PhonePe PG. PhonePe's grievance policy promises online merchants 24/7 support by dashboard ticket and phone, a first response within 24 hours and resolution within 15 business days, with escalation to a grievance desk and nodal officers.

Who should use PhonePe Payment Gateway

PhonePe PG suits an Indian startup or small to mid-size online business that takes mostly UPI and domestic card payments, wants to go live without setup costs, and values a contract it can leave on a week's notice. The free introductory period is useful if you treat it as a trial. Before the offer ends, get PhonePe's per-method rates in writing, along with any faster settlement terms you need. It is a weaker fit if you need next-day settlement as standard, a published rate card before you sign, or broad international card acceptance, and it is closed to real-money gaming, crypto, adult and other prohibited categories.