Best Payment Gateways for Your Dropshipping Business in India ( 2024 )

A seamless and secure payment experience is critical to the success of a dropshipping business . As an India-based dropshipper, you recognise the significance of selecting the appropriate payment gateway to guarantee streamlined transactions for your business and your clients.
This guide provides an in-depth analysis of payment gateways, specifically designed to meet the specific requirements of dropshipping businesses in India. We will reveal the essential characteristics that can have a substantial influence on the success of your online business.
The success of your dropshipping business depends on the quality of your transactions, so let's investigate the top payment gateways in India.


  1. What is a Payment Gateway?
  2. How Does a Payment Gateway Function?
  3. What Factors Should You Consider When Choosing a Payment Gateway?
  4. Best Payment Gateways for Your Dropshipping Business in India 
    1. Razorpay
    2. Cashfree
    3. Payu
    4. PhonePe
    5. CCAvenue
    6. Instamojo

What is a Payment Gateway?

A payment gateway is a technological solution that serves as an intermediary between a merchant's website and the financial institutions responsible for processing online transactions. Customers can utilise this platform to conduct safe online transactions for purchasing goods and services.


How Does a Payment Gateway Function?

A payment gateway's key functions are as follows:


1- Transaction Initiation:

When a customer makes an online purchase, the payment gateway is in charge of starting the transaction process.


2- Security and Encryption: 

Payment gateways utilise encryption techniques to ensure the security of sensitive information such as credit card numbers. This encryption aids in the protection of the customer's data during transmission.



The payment gateway requests authorization for the transaction from the financial institution that issued the customer's credit card. This phase involves determining whether the consumer has enough dollars or credit to execute the transaction.


4-Transaction Approval or Decline:

The payment gateway either authorises or declines the transaction based on the authorization answer. The funds are reserved for the purchase if approved.


5-Notification to Merchant:

The payment gateway notifies the merchant (seller) of the transaction's status, specifying whether it was successful or unsuccessful.



If the transaction is approved, the payment gateway will help you with the settlement process. It ensures that money moves from the customer's account to the merchant's account.


What Factors Should You Consider When Choosing a Payment Gateway?

Online transactions, customer experience, and overall success can be influenced by the choice of payment gateway for your business. Before you choose a payment gateway, think about the following:


1-Integrating and Compatibility:

Your payment gateway should work seamlessly with your e-commerce platform or website. Popular platforms frequently have preferred gateways. The payment gateway should support mobile devices and multiple OSes.


2- Authorised Payment Methods:

Check that the payment gateway accepts credit cards, debit cards, digital wallets, and other local payment methods.


3- Transfer Fees:

Know the payment gateway's transaction, setup, and other fees. Find a cheap gateway for your business by comparing fees.


4-The User Experience:

Consider the payment gateway's UI and experience. An easy checkout procedure can boost conversions.


5- Settlement Time:

Check the settlement period—the time it takes to deposit funds into your bank account. A faster settlement can boost cash flow.


Best Payment Gateways for Your Dropshipping Business in India ( 2024 )

I've put together a list of the best payment processors that drop shippers use most often in India . The list also shows supported countries and transaction fees.


1 - Razorpay



If you own a dropshipping business and want to take payments from clients online, Razorpay is a great tool to have on hand. In addition, you may accept payments through a variety of channels using Razorpay Payment Links, including SMS, email, whatsapp, chatbots, and messenger.


2 - Cashfree

Best Payment Gateways for Your Dropshipping Business in India ( 2024 )

Cashfree is a payment gateway and fintech company based in India. Here are some key features and information about Cashfree:
Payment Options: Cashfree supports a variety of payment methods, including credit/debit cards, net banking, UPI, digital wallets, and more.
Seamless Integration: Cashfree provides easy-to-integrate payment gateway solutions for online businesses, ensuring a smooth checkout process for customers.
Subscription Payments: The platform supports recurring payments and subscription-based models, making it suitable for businesses with subscription services.
International Payments: Cashfree allows businesses to accept international payments in multiple currencies, making it convenient for global transactions.


3 - Payu


PayU is a prominent online payment service provider that operates globally, providing payment solutions for merchants and businesses. PayU offers a range of services, including payment gateways and technology solutions to facilitate online transactions.
PayU supports a variety of payment methods, including credit/debit cards, net banking, UPI (Unified Payments Interface), and digital wallets.PayU also operates in numerous countries globally, making it suitable for businesses with an international customer base


4 - PhonePe


PhonePe Payment Gateway is a safe, powerful platform that offers real-time, rapid online payments to your consumers. PhonePe's initiatives to simplify payments and promote digital inclusion for customers and merchants led to it.
Hundreds of thousands of eCommerce, travel, gambling, and BFSI organisations choose PhonePe PG for its reliability, success rates, and easy user experience.
PhonePe PG promises merchants 100% uptime with lightning-fast checkouts and real-time instrument health tracking to detect downtimes.
Integrate PhonePe PG easily with digital self-onboarding and give clients a premium payment experience.
What makes PhonePe PG special:
UPI leadership, industry-leading success, and security.
A dependable platform with dynamic routing for 100% uptime.
Smooth technical support, an interactive dashboard, and 24/7 support.


5 - CCAvenue



CCAvenue is a well-known payment gateway service provider based in India. It offers online payment solutions to businesses, allowing them to accept payments through various channels.


6 - Instamojo


For Indian enterprises, Instamojo is an online-only payment gateway. Since 2012, Bangalore-based platform has served 800,000 Indian businesses from 29 States and 7 Union Territories with 10+ million clients.



The ideal payment gateway will depend on your specific requirements and objectives. Integration simplicity, security standards, and the variety of accepted payment methods are also important factors to think about, in addition to transaction prices.
Razorpay , Cashfree and PhonePe is just one of many competitors, and each has something special to offer. There is a solution that fits your company's needs, whether you value a simple interface, strong security measures, or the ability to process transactions on a worldwide scale.

This post "Best Payment Gateways for Your Dropshipping Business in India " contributed by Priya Rawat, on behalf of Priya is a freelance writer and  digital marketing expert. 

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