A Founder's Checklist for Choosing a Payment Gateway

Most founders choose a payment provider the way they choose a domain registrar: quickly, from whoever a friend used. It works until the first settlement goes missing on a Saturday, a big customer can't pay by the method they want, or the monthly reconciliation starts taking a week. A few hours of questions before signing saves a lot more later.

Here's the checklist, grouped by what you're really trying to find out.

Under RBI's 2025 Master Direction, a payment gateway only provides the technology to route payments, while a payment aggregator collects customers' money and settles it to merchants, keeping it in an escrow account with a scheduled commercial bank in the meantime. Know which you're dealing with.

List how your customers actually pay today and how they'll pay in a year: UPI, cards, net banking, wallets, EMI, customers abroad, recurring payments. Then check coverage, not just the logo list, because availability can depend on your business category.

Every provider looks the same when payments succeed. Ask about the other cases: pending UPI payments, declined cards, timeouts, and provider outages.

A clean integration is a sandbox that behaves like production, a status check you can call, signed webhooks, idempotency on refunds and payouts, and documentation that covers failures as well as success. If you use a platform such as Shopify or WooCommerce, check the provider's plugin or app for your platform specifically.

Month-end is where a weak provider costs you most. You'll want settlement reports you can match to orders, refunds you can issue (fully and partially) from your own system, and a clear dispute process with deadlines you can meet.

Find out who answers when a settlement is late or payments suddenly fail, through which channel, and how fast in practice. Ask for the escalation path in writing.

Compare offers on your own numbers: take last month's payments by method, apply each provider's rates, add fixed fees and any platform charges, and compare totals. Check what's charged on refunds, chargebacks, international cards and settlement options. The cheapest headline rate isn't always the cheapest month.

Ask how you'd leave: notice periods, what happens to money in transit, how refunds on old payments are handled after you switch, and how you'd get your transaction data. Providers that answer this clearly tend to be the ones you won't need to leave.

For many young businesses, one good provider is enough. As volumes grow, a second provider for resilience, or for methods the first handles poorly, starts to pay off, and so does a layer that manages both. Decide consciously rather than by accident.