Short answer: choose on five criteria, in this order: whether the provider actively onboards travel merchants in your category rather than merely tolerating them; settlement speed and any rolling reserve, because flight inventory is paid for before customer money arrives; genuine support for international cards and 3-D Secure if you sell to NRIs or inbound travellers; UPI and netbanking coverage for the domestic market; and how disputes and chargebacks are handled operationally. Pricing matters, but a slightly cheaper rate with slow settlement or a frozen account costs a travel business far more than it saves.
This is general information, not financial or legal advice. Rules from the RBI, NPCI and the card networks change; verify current requirements with your bank, gateway and advisors before signing anything.
Why travel is treated as a high-risk category
Card acquirers classify merchants by category code; travel agencies fall under travel MCCs (travel agencies are commonly coded 4722), and the category carries elevated risk in every acquirer's book for one structural reason: the customer pays today for a service delivered weeks or months later. If the agency fails, the flight is cancelled, or the trip is disputed, the acquirer holds the liability window. Add high average ticket values and a steady background of fraud attempts on flight bookings, and the result is stricter underwriting: more documents at onboarding, sometimes volume caps or rolling reserves, and faster account freezes when dispute ratios climb.
The practical consequence: apply to providers that state or demonstrate an appetite for travel merchants, be transparent about your model (agency, OTA, B2B consolidator) at onboarding, and never describe a travel business as something else to ease approval; misdeclared category is a standard reason for later termination.
The regulatory frame: RBI, NPCI, card networks
Three rule-makers shape everything a gateway can offer you. The Reserve Bank of India regulates payment aggregators directly: online aggregators require RBI authorisation, must hold merchant funds in escrow accounts, and operate under the RBI's payment aggregator directions, which also tightened merchant KYC. The RBI likewise mandates an additional factor of authentication for domestic card-not-present transactions, which is why Indian card payments run through OTP or equivalent verification, and it regulates recurring and tokenised card payments (card-on-file tokenisation is required for stored cards). NPCI operates UPI and the RuPay network and sets UPI's rules. Visa and Mastercard set chargeback, dispute and surcharge rules for their cards. When comparing gateways, you are largely comparing how well each one packages the same underlying rails and rules.
Settlement cycles and cash flow
Under the RBI's payment aggregator framework, merchant settlements run on tight timelines, commonly T+1 working day in current practice. For most e-commerce that is comfortable; for travel it is still a gap, because a flight booked at 09:00 is often ticketed within minutes against your consolidator or BSP credit, while the customer's money arrives the next day. Multiply by daily volume and the float you finance is real working capital.
Questions to ask any provider: what is the standard settlement cycle for travel merchants, is early or on-demand settlement available and at what cost, is a rolling reserve applied to travel accounts and at what percentage and duration, and what happens to settlement timing when a dispute spike occurs. Get the answers in writing; settlement terms, not headline MDR, are where travel merchants most often get hurt.
Payment methods that matter in India
| Method | What a travel merchant should know |
|---|---|
| UPI | The dominant domestic method by volume, operated by NPCI. Low friction, instant confirmation, and well suited to the mobile-first traffic most Indian OTAs see. Watch transaction limits on high-value itineraries. |
| Credit cards | Essential for high-ticket international itineraries and EMI offers. Domestic card-not-present payments carry RBI-mandated additional factor authentication. |
| Debit cards and netbanking | Still significant for travellers without credit cards; netbanking remains a fallback for high-value payments above card or UPI limits. |
| International cards | Needed for NRI and inbound business. Requires the gateway to enable international acquiring on your account, usually with extra scrutiny, and 3-D Secure handling for foreign cards. |
| EMI and pay-later | Common on higher-value holiday packages; offered through issuer tie-ups on cards and through pay-later providers. Understand who carries the credit risk before enabling. |
If you also sell to customers paying in other currencies, pricing and collection are a separate design problem; see our guide to multi-currency pricing for travel websites.
MDR, surcharges and convenience fees
The merchant discount rate is the fee the merchant pays per transaction, and in India it is partly a policy matter, not just a commercial one. Since January 2020, government policy has kept UPI and RuPay debit transactions at zero MDR for merchants; in 2026, Parliament has moved to amend that framework so that the government can specify which modes remain fee-free, with public reporting suggesting any future MDR would target larger merchants and higher-value transactions. Treat the current zero-MDR status of UPI as policy that can change, and check the position when you sign, rather than an eternal fact.
Passing costs to the customer is a separate question. Card network rules restrict surcharging card transactions, and Indian regulators have repeatedly signalled that charges must not be levied on payment modes designated fee-free. Where agencies charge a convenience fee, the defensible pattern is a clearly disclosed, flat fee for a genuine service applied before payment, shown in the total, and consistent with your advertising: an undisclosed fee added at payment is both a consumer-trust problem and an ad-policy violation, as we cover in our landing page compliance guide. Take specific advice for your own fee structure; this area is genuinely rule-dense.
The gateway landscape, by category
Naming categories rather than ranking vendors, the Indian market breaks into four groups. Full-stack payment aggregators (companies such as Razorpay, PayU, Cashfree and CCAvenue) offer one contract covering cards, UPI and netbanking with developer-friendly APIs, and are where most OTAs start. Bank-owned gateways (offerings from banks such as HDFC and ICICI) appeal where an agency already has a strong banking relationship and wants acquiring and settlement under one roof. International platforms (such as Stripe or PayPal) matter mainly when your buyers are overseas and you need foreign-currency acceptance. Finally, B2B settlement rails inside the trade (agent wallets, deposit accounts and credit lines in a B2B portal) replace per-transaction gateway payments for sub-agent business entirely, which is often the cheapest and fastest rail of all for trade volume. Many established OTAs run two or more of these simultaneously and route transactions by method, currency and cost.
Chargeback exposure
Every gateway decision should be made with disputes in mind, because travel runs some of the highest dispute rates of any category: trips cancelled, schedules changed, refunds slower than cardholders expect, and family members disputing bookings they did not recognise. Ask how disputes reach you (dashboard, API, email), how many days you get to respond with evidence, and what data the gateway forwards to the acquirer on your behalf. A provider that gives you structured dispute handling and clear billing descriptors is worth a few basis points of MDR. The mechanics of winning and preventing disputes are a topic of their own; read our companion guide to chargebacks in the travel industry.
Integration notes for booking platforms
On the platform side, a travel checkout needs a few things a generic plugin does not give you: payment status webhooks reconciled against booking status so a ticket is never issued on an unconfirmed payment and never lost on a confirmed one; automatic handling of the pay-then-fail case, where payment succeeds but ticketing fails and the customer must be refunded or rebooked immediately; refund APIs wired to your cancellation flow; and settlement reports imported into your back office for reconciliation. We build these flows as standard in travel portal development and travel website projects, typically with two gateways configured so one provider's outage or freeze does not stop sales.
This article is general information about travel technology and online marketing. It is not legal, tax or financial advice, and advertising platform policies change often. Check the current policy documents and take professional advice for your own situation.