2026 is turning out to be the year where embedded payments are taking the center stage. Businesses like yours are working to make customer purchase journeys and internal processes more efficient than ever before.

Globally, around 70% of online shopping carts are abandoned before purchase, often due to checkout friction, payment failures, or cumbersome flows. That makes optimizing your payment experience not just a convenience, but a revenue lever. Even modest improvements in payment reliability or checkout flow can significantly improve conversion for high-volume merchants.

With rising pressure to weed out inefficiencies and deliver payment experiences that are lightning-fast, seamless, and secure, choosing the right payment gateway has become more essential than ever.

How to choose the right payment gateway for your Indian business in 2026

Understand your payment needs

Narrowing down what your business needs is the first step you need to focus on. With embedded payments becoming mainstream and customer expectations rising, your gateway must align with both how your customers pay and how your business operates behind the scenes.

Start by answering these crucial questions.

Are your customers paying online, in-store, or across multiple touchpoints?

Understanding where your customers pay helps determine whether you need strong online checkout flows, in-person acceptance, or both. Choose a gateway that supports all the channels relevant to your business today and as you expand.

What is your expected payment volume today, and what will it look like two years from now?

Your projected growth affects infrastructure needs, pricing slabs, and performance expectations. Ensure the gateway can scale smoothly without compromising success rates during peak loads.

What are your customers preferred payment methods?

The payment methods (UPI, cards, net banking, wallets, and the like) your customers use most should guide your selection. The right payment gateway must support these methods reliably to reduce drop-offs and improve conversion.

Do you need capabilities more than just payment acceptance?

Some businesses require advanced features like subscriptions, mandates, or split settlements. If these workflows matter to you, choose a payment gateway that supports them natively rather than forcing workarounds.

How crucial are settlement timelines for managing cash flow and vendor payments?

Faster settlements improve liquidity and help run daily operations more efficiently. Pick a gateway that offers settlement cycles aligned with your cash flow rhythm.

Can payments integrate seamlessly into the existing ecosystem?

Your payment gateway should work hand-in-hand with your finance apps and operational systems. Smooth integration eliminates manual steps and keeps your workflows unified from order to reconciliation.

How much manual effort can your team handle?

Tasks like reconciliation, reporting, and compliance can become time-consuming without automation. A gateway that reduces manual work frees your team to focus on growth rather than administrative overhead.

Now that you have a clear idea of what you are looking at, lets look at how to evaluate the payment solution you are considering.

Evaluate the payment methods supported

In India, payment preferences change quickly, owing to price sensitivity and reliability. Supporting the right methods can dramatically improve conversion, trust, and customer satisfaction. Ensure the payment gateway you are evaluating supports the following popular methods:

• UPI, UPI Autopay, and UPI Lite

• Cards

• Banking connect

• Net banking

• Wallets

• Bank transfers (IMPS/NEFT/RTGS)

Customers expect to pay the way they want. If their preferred payment option isn’t available or doesn’t work smoothly, they simply abandon the transaction. With UPI accounting for more than 80% of India’s retail digital payment volume, and card tokenization improving card success rates by 5–12%, supporting these methods is essential.

Check for success rates and reliability

A payment gateway may support multiple payment methods, but what matters more is how consistently those transactions succeed. Even a minor dip in success rate, especially during peak hours and festive seasons, can lead to abandoned checkouts and lost revenue. High-volume merchants, in particular, can see meaningful revenue improvements with just a marginal increase in success rates.

Payment failures, on the other hand, leave a lasting negative impression on customer. If your gateway experiences downtime, has slow response times, or struggles during spikes, customers may hesitate to transact again. For businesses that operate across multiple channels or deal with large volumes, reliability becomes nonnegotiable.

Remember, a reliable gateway should offer consistently high uptime, a stable performance during high traffic, low latency for faster payment completion, and predictable performance across all payment methods.

Evaluate settlement timelines

Not all payment gateways settle funds at the same speed. While T+1 (one business day after the transaction date) has become the standard, many gateways now offer instant settlements for eligible businesses. This is particularly valuable for high-volume retail operations, businesses with fast-moving inventory, businesses looking for quick vendor turnarounds, and merchants operating on thin margins.

In addition, you should also checkout if the payment gateway offers a customizable settlement cycle. This helps plan your cash flow in a better way. The faster your funds are available, the more liquidity you have to run and grow your business.

Prioritize security, fraud prevention, and compliance

A payment gateway should follow the highest standards of data protection and transaction security. Look for gateways that are, PCI DSS compliant and support tokenized card transactions. They should also offer secure authentication flows including 2FA and device-based verification.

More importantly, payment gateways have real-time fraud detection and fraud prevention features. A reliable payment gateway should use advanced fraud detection tools such as real-time risk scoring, AI-driven anomaly detection, velocity checks, behavioral analysis, and location- and device-based monitoring. Proactive fraud intelligence can help reduce chargebacks, prevent false declines, and protect your business from losses and brand damage.

India’s payments ecosystem is governed by regulations issued by the Reserve Bank of India (RBI) and frameworks such as Payment Aggregator Guidelines, DPDPA (Digital Personal Data Protection Act), and card tokenization mandates. Opt for payment gateways that comply to these regulations and are authorized by RBI.

Ensure seamless integration and embedded payment capabilities

As Indian businesses digitalize their financial operations, payments can no longer remain a standalone activity. In 2026, the most efficient companies will be those that embed payments directly into their financial workflows and reduce manual work while tightening controls to improve both customer experience and internal efficiency.

Your payment gateway should integrate smoothly into your existing finance apps that handle accounting, invoicing, inventory and orders, subscriptions and storefront operations, and support embedded payments. Embedding payments within your finance app's processes ensures transactions happen smoothly without extra steps. This creates a unified flow from order to payment to reconciliation.

If your business has customized systems or you plan to accept payments via your website, API-driven integration is crucial. The payment gateway you choose should offer clean, low-code, well-documented APIs that let you embed payments directly into your internal tools or the website.

Don’t overlook in-person payment acceptance

Many Indian businesses today operate in a blended environment where both online and offline payments matter. Whether you run retail stores, service outlets, or have field teams collecting payments, your payment gateway should support smooth, fast, and reliable in-person payment options that complement your digital flows.

The common problem faced by merchants with offline payments is that it works as a silo. It does not connect with business systems. A good payment provider should ensure it syncs in-person payments with online orders, auto-update inventory or invoicing systems, offer unified reporting for both online and offline channels, and provide consolidated settlement reports across modes. This eliminates operational silos and provides a cleaner financial picture.

Compare pricing transparency

A good payment gateway should offer clear and predictable pricing without hidden fees that impact your margins. Transparent pricing ensures better financial control and lets you scale confidently without unexpected cost spikes.

Clear, well-documented pricing helps you:

• Forecast your costs accurately based on transaction volume, average order value (AOV), payment methods, and refund rates.

• Compare providers objectively, not just on headline fee, but on how pricing behaves under real usage patterns.

• Understand how fees differ for UPI, cards, banking connect/net banking, or wallets.

• Avoid sudden surprises like hidden setup costs, fee bumps, or surcharges for certain payment methods that can silently erode profitability.

Why Zoho Payments is a strong choice for Indian businesses in 2026

Zoho Payments brings together everything Indian businesses need in a payment gateway—a wide range of India’s preferred payment modes, reliable performance, transparent pricing, and native integration with finance apps. With ironclad security, PCI DSS compliance, tokenization, and advanced fraud prevention features, Zoho Payments safeguards both your business and your customers. For businesses looking for a unified, and scalable payment solution in 2026, Zoho Payments stands out as a reliable choice.

Conclusion

Choosing the right payment gateway in 2026 goes far beyond enabling digital transactions. It requires a clear understanding of your business workflows, customer payment preferences, operational realities, and growth plans. By evaluating critical factors such as success rates, settlement timelines, security, compliance, in-person acceptance, integration capabilities, and transparent pricing, businesses can select a payment solution that not only supports seamless payment experiences but also strengthens their overall financial operations. As customer expectations continue to evolve and embedded payments become the norm, the right gateway will play a central role in delivering efficiency, trust, and long-term scalability across your business.