Cashfree Payments offers zero payment gateway fees to woo new merchants

Cashfree Payments will waive gateway fees on the first Rs 20 lakh of GMV for new merchants as it aims to double its SMB base to 2 million by the end of FY27

At a time of heightened competition in India’s digital payments market, fintech firm Cashfree Payments said it was waiving off payment gateway fees for new merchants signing up on its platform. This comes as the firm looks to double its small and medium businesses (SMBs) count to two million by the end of 2026-27 (FY27).

 

The fee waiver programme, targeted at SMBs ahead of the festival season, covers the first ₹20 lakh in gross merchandise value (GMV) by the end of FY27.

 

The Bengaluru-based fintech currently serves one million of such early-stage and growing merchants.

 

“Around 25,000 new companies get set up every month and almost 20 per cent of them sign up with Cashfree to explore payments. This programme is targeted towards them and for those who may not be happy or are looking for reasons to switch from their existing payments gateway,” Reeju Datta, cofounder, Cashfree Payments, told Business Standard.

 

While Datta called this a marketing spend to acquire and grow its merchant base, he did not disclose the budget for the programme.

 

He pointed out that a large portion of the revenue comes from merchants who end up clocking over ₹20 lakh in GMV.

 

As part of the current programme, regular gateway fees apply after the target ₹20 lakh GMV is generated by a company.

 

“The few merchants who cross ₹20 lakh (GMV) will contribute more revenue than those in the ₹1-20 lakh space,” he added.

 

GMV refers to the total value of goods or services sold through a platform over a given period, before deducting fees, discounts, refunds, or other costs.

 

The focus on merchant acquisition comes at a time when the Indian digital payments market is understood to be a thin-margin business.

 

It has more than 50 payments processing players, including major ones such as PayU, Razorpay, AvenuesAI, BillDesk and PhonePe, among others.

 

“Even existing merchants can switch because right now the switching is very easy. Integration times (with payments processing partners) have really come down drastically from months to minutes, in terms of making the first transaction. We track in minutes how many people did their first transaction as a metric,” Datta said.

 

He said that long-tail merchants, who may require different forms of payment methods, could integrate them as part of the program, including enablement of credit card on Unified Payments Interface (UPI), netbanking, American Express (Amex) and Diner, among other schemes and methods.

 

In a statement, he added that an average SMB or direct-to-customer business makes 40 per cent of its annual sales during the festive season, and that 90 per cent of new sellers signing up ahead of the high-sales period record a GMV of ₹20 lakh during that time — implying that the fee waiver covers payment costs for merchants this season.

 

In a separate conversation in May, chief executive officer (CEO) Akash Sinha had said that the company was planning a significant funding round of over $100 million in FY27 to deepen investments in cross-border payments and artificial intelligence.