Razorpay and Instamojo alternatives for direct UPI settlement

UPI itself has no transaction fee — the National Payments Corporation of India mandates zero MDR on UPI payments. The fee a freelancer actually pays comes from the gateway layered on top of UPI, not from UPI itself. Below is what two commonly used ones currently charge, as of writing, since these rates do change and are worth confirming directly before relying on them for a decision.

Razorpay

A standard account currently pays a 2% platform fee plus 18% GST on that fee, which works out to roughly 2.36% effective on a UPI transaction — the fee itself, not the underlying transaction, is what GST applies to. Settlement is T+1 by default, with instant settlement available as a paid add-on. Razorpay has run a limited-time 0% platform fee promotion for new merchant accounts on transactions up to a cumulative cap, but that is a time-boxed offer, not the standing rate — check the current terms before assuming it applies.

Instamojo

Standard UPI and payment-link transactions currently carry a 2% plus ₹3 per-transaction fee. Default settlement runs roughly three days after the transaction, with faster payout options available for an additional fee and subject to KYC. Instamojo also offers a convenience-fee toggle that shifts the transaction cost onto the customer at checkout rather than eliminating it — the fee still exists, it is just paid by the other party.

What changes with a direct UPI link

A UPI ID or QR code on the invoice is not a gateway account at all — the client pays it exactly the way they would pay any other UPI ID, with the payment landing directly in the freelancer’s account. There is no platform fee to negotiate down, no settlement delay to plan around, and no GST charged on a fee that does not exist in the first place, because nothing is charging one.

The tradeoff is the same one that applies to any gateway-free setup: no automatic reconciliation with accounting software, and no built-in dispute or chargeback handling. For a freelancer invoicing individual clients or small businesses directly, rather than running high-volume checkout at scale, that tradeoff is usually the right one — the gateway is solving problems that were never actually present.

See the full cost breakdown, adjustable to your own billing volume, on the payment gateway fee calculator