Over the last six financial years, India has processed more than 65,000 crore digital payment transactions across consumers, merchants and platforms. These transactions together were worth over 12,000 crore, turning digital payments into critical infrastructure for the real economy.
Digital payments are projected to grow from 206 billion transactions in FY25 to 617 billion in FY30. At that scale, even a minor dip in reliability quietly translates into crores of lost revenue, support effort and abandoned orders.
Against this backdrop, investing in a strong payment gateway strengthens the most critical customer touchpoints, ensuring a smooth and reliable payment experience. Let’s look at the hidden ways a low-cost payment gateway can end up costing your business significantly more over time.
How a cheaper payment gateway ends up costing your business more
On paper, a cheaper payment gateway looks like an easy win, yet hidden failures quietly compound into serious revenue loss. These ten payment gateway mistakes reveal how small compromises at checkout decrease customer trust, strain teams and dilute long-term growth.
1. Low success rates quietly destroy top-line growth
Low-cost providers often struggle with lower authorisation rates, which is the percentage of payment attempts successfully approved by banks.
Every failed transaction results in lost revenue and wasted customer acquisition spend. A high-performing payment gateway, by contrast, offers strong success rates, intelligent routing and instant retries for UPI and card payments.
This ensures genuine transactions are completed on the first attempt, steadily preserving revenue, reducing friction and fostering long-term customer trust.
2. A clunky checkout experience increases drop-offs
Leaders invest heavily in bringing traffic and product experience, then lose customers at the last step because the payment journey is slow or confusing.
A modern payment gateway should support intuitive mobile-first checkout flows, smart error messaging and quick retries during payment.
These capabilities help customers complete payments without repeated attempts or unnecessary friction, which keeps satisfaction and conversion rates high.
3. Limited payment options narrow customer choice
Cheaper payment gateway platforms often cut corners on integrations with newer instruments that Indian customers now expect at checkout today.
Your payment gateway should support multi-mode payments across UPI, cards, net banking, PaybyPoints and wallets for everyday transactions.
Payment gateways that let customers choose the method that best fits their cash flow ensure reduced drop-offs and abandoned carts.
4. Weak payment flexibility options lead to lower average order values
Without EMI and Pay Later options, many high-value carts get postponed or abandoned at the final stage. Customers sometimes cannot stretch budgets, so they close the tab instead of completing the payment.
A full-featured payment gateway with an extensive affordability suite can unlock flexible EMIs and Pay Later journeys for customers. These options allow customers to upgrade while your business still gets paid in full, which protects both revenue and loyalty.
5. Limited scalability under peak load leads to performance breakdowns and lost sales
Campaigns, festive sales and salary day spikes are exactly when you cannot afford downtime or serious latency.
A cheaper gateway may not invest enough in resilient infrastructure, which leads to timeouts, slow pages and frequent payment errors during peaks.
Frustrated customers often do not return after a failed sale in a critical event, which damages long-term brand equity.
6. Opaque pricing and settlement delays eat into cash flows
Some low-cost payment gateway providers offset headline pricing with hidden charges on instruments and settlement timelines that keep cash locked longer.
A strategic partner is transparent on Merchant Discount Rate (MDR) structures, convenience fee configuration and settlement cycles for every payment method.
This clarity helps finance teams forecast inflows with confidence and reduce working capital stress significantly across business units.
7. Weak security exposes you to regulatory and reputational risk
RBI continues to tighten standards on authentication, tokenisation and risk-based checks across digital payments in India each year. At the same time, expectations on fraud controls and customer protection keep rising for banks, fintechs and merchants alike.
A discount provider that underinvests in security, PCI compliance and encryption leaves you exposed to chargebacks and regulatory findings. These incidents often trigger penalties and long-term distrust among customers, which is far costlier than a slightly higher MDR.
8. Clumsy integrations slow product roadmaps
Development time is one of your most expensive resources, especially when engineering teams juggle multiple growth projects simultaneously. A future-ready payment gateway should offer developer-friendly APIs, clear documentation and a modern MCP server that teaches as it builds.
With this combination, teams can go live in hours rather than weeks, freeing capacity for product work elsewhere. With such a stack, developers can trigger test calls directly from their IDE, avoid heavy manual version management and maintain cleaner code.
The result is faster experimentation, fewer production incidents and better coordination between product, engineering and finance teams on rollout timelines.
9. Thin analytics keep leadership blind to real issues
If your dashboards only show basic counts, you cannot diagnose where revenue actually leaks across customer journeys, banks or devices.
Rich analytics on success rates by issuer, instrument, geography and time of day allow teams to troubleshoot issues before they escalate.
They also help teams directly connect checkout performance with business KPIs, so leadership understands how payments affect growth.
Choose a payment gateway that protects every rupee of revenue
A cheap gateway may save a little today, but failed transactions and churn slowly decrease revenue and brand trust. At current and future digital volumes, even brief downtime or poor success rates can translate into significant lost orders and higher support effort. Strategic payment gateways such as Pine Labs Online focus on resilience, rich payment options and strong security by design.
Such partners bring strong analytics, multi-mode payments and advanced compliance that protect margins while supporting product innovation. Review your checkout stack now and shift from price-driven decisions to choosing infrastructure aligned with your long-term strategy.
